On July 26, 2023, the U.S. Department of Justice’s National Security Division, U.S. Department of Commerce’s Bureau of Industry and Security, and U.S. Department of the Treasury’s Office of Foreign Assets Control issued a Tri-Seal Compliance Note (the Note) detailing updates to the three agencies’ voluntary self-disclosure policies applicable to violations of U.S. sanctions, export controls, and other national security laws. The agencies highlighted the essential role that the private sector plays in identifying threats from malicious actors and foreign adversaries seeking to undermine the American economy and national security, and they encouraged prompt voluntary self-disclosure and remediation of apparent violations. The Department of Justice announced an updated policy that it “generally will not seek a guilty plea, and there will be a presumption that the company will receive a non-prosecution agreement and will not pay a fine” in cases “where a company voluntarily self-discloses potentially criminal violations, fully cooperates, and timely and appropriately remediates the violations.”
This is the agencies’ second joint effort to share enforcement trends and provide guidance on U.S. sanction and export control enforcement, following a note issued on March 2, 2023, that focused on Russian- and Belarussian-related sanctions and export control enforcement and on which McGuireWoods previously reported. The agencies’ March 2 note announced that they planned to issue joint advisories on an ongoing basis.
The July 26 Note summarized the agencies’ policies aimed at incentivizing voluntary self-disclosure of potential violations, all of which focus on significant mitigation of civil or criminal liability in the case of voluntary self-disclosure. The agencies noted, however, that companies will likely not qualify for mitigation when aggravating factors accompany the violation. They also emphasized that voluntary self-disclosure generally must occur promptly following discovery of the potential violation and often must be accompanied by timely and appropriate remediation.
The Note also highlighted the Financial Crime Enforcement Network (FinCEN)’s Anti-Money Laundering and Sanctions Whistleblower Program, which incentivizes individuals to provide information to the government about violations of U.S. trade and economic sanctions and the Bank Secrecy Act.
The Note accordingly encouraged businesses to develop effective and robust compliance and ethics programs to disclose and remediate potential violations and to ensure ongoing compliance. Businesses would do well to heed this advice. The laws and regulations covered under the Note are expansive in scope, and it represents the federal government’s second warning this year that it is sharpening its sanctions, export controls, and other national security enforcement efforts.
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