Increase to Civil Penalties for Export Violations

After a delay due to the government shutdown, the U.S. government recently announced increases to civil penalties for export related violations. Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, civil penalties for export related violations should have increased on 3 January 2019. However, given the fact that the USG was shut down on that date there was no one to write and approve Federal Register Notices that would have brought about the regulatory changes. The increases were instead implemented in March.

Effective 1 March 2019, the following increases for Civil Penalties came into effect:

Census Bureau

13 U.S.C. 304, Collection of Foreign Trade Statistics (2002)

• A fine for each day’s delinquency of a violation and the maximum amount of the fine has increased from $1,360 to $1,394 per day/per violation and a maximum per violation, from $13,605 to $13,948.

Commerce Department

50 U.S.C. 1705(b), International Emergency Economic Powers Act (2007)

• An increase of maximum penalty per violation from $295,141 to $302,584 or an amount that is twice the amount of the transaction that is the basis of the violation.

Commerce Department

50 U.S.C. 4819 Export Controls Reform Act of 2018

• A fine of not more than $300,000 or an amount that is twice the value of the transaction that was the basis of the violation with respect to which the penalty is imposed, whichever is greater.
• Revocation of a license issued under this subchapter to the person.
• A prohibition on the person’s ability to export, reexport, or in-country transfer any items controlled under this subchapter.

Effective March 19, 2018, the following increase in civil penalty came into effect:

State Department

22 CFR Part 120-130 – International Traffic in Arms Regulations

• An increase of maximum penalty per violation from $1,134,602 per violation to $1,163,217 per violation.
• Revocation of a license issued under this subchapter to the person.
• Debarment.

Mistakes happen, however, having a robust export compliance program will serve as a mitigating factor if export violations do occur. It is important to continually assess and update your program to ensure you are in compliance with U.S. export regulations. If you need assistance in creating, implementing, or assessing your trade compliance program, please contact us for a free consultation.