BIS Time Limit for VSDs Generally Supported, but Tweaks Proposed

The proposed rule would require that the final, narrative account required in voluntary self-disclosures (VSDs) of violations of the Export Administration Regulations (EAR) be submitted to the Office of Export Enforcement within 180 days of the initial VSD notification. It also would authorize the use of alternative delivery services for providing notice of the issuance of a charging letter. Boeing said the proposed changes to the EARs are "reasonable and appropriate," in its comments. It said the 180-day deadline "provides adequate time for review and investigation" and fixed time limits allow exporters and the Office of Export Administration "to efficiently perform diligence and conclude investigations." It also supported BIS proposals to allow more delivery options. (See ITT's Online Archives 12110619).

TechAmerica supported the proposed rule on Voluntary Self-Disclosures (VSDs), saying if would provide more efficiency in resolving enforcement proceedings. The requirement for a full narrative account of violations within 180 days "should encourage companies with sound Trade Compliance departments to perform with greater precision and transparency," it said, adding that it supports the provision for unique circumstances.

But "the current lack of transparency of possible enforcement actions ensuing from VSDs is of great concern to the technology industry," TechAmerica said. "With frequent acquisitions, compliance audits and VSDs that arise from such audits are essential to corporate export compliance programs. The history of VSD submissions shows a wide range of resolution times, spanning from the reasonable (several months) to potentially beyond the BIS statute of limitations, despite member companies internal diligence in investigating and documenting violations." It suggested that BIS provide communication about the status of the investigation of the VSD, "akin to status updates in SNAP-R." It also wants resolution of the VSD or, at a minimum, written communication about the expected resolution date, within 180-days of submission of the full narrative account.

GE said perfect compliance programs don't exist, so it supports the BIS proposals for a 180-day time period for VSDs, but also supported the alternative of a "substantive" supplemental filing in that period that includes the status of the company review and remedial measures taken. It supported the possibility of extensions of the deadline, but said that granting at the "discretion" of the OEE director doesn't provide regulatory certainty and "is not comforting."

Conditions on granting extensions could be acceptable, GE said, such as tolling agreements, though it said such agreements can't be "open-ended." Requirements for interim remedial actions also "make sense," it said. A hard 180-day time limit "may result in detrimental unintended consequences," said MKS Instruments. It said an investigation may have "such complexity that submission of a compliant VSD may be difficult to achieve within a 180-day window," and that often isn't know at the beginning of an investigation. Often the complexity of an internal investigation is not known at the beginning of the investigation. It also said a deadline "unfortunately may provide unintended incentive to an exporter to delay submission of the VSD beyond the date that they would otherwise -- were there no deadline -- submit their VSD."

MKS also said BIS should clarify the exact date that the proposed 180-day window begins. It said it isn't clear if it's the date postmarked, or accepted by a courier, or the date it's received by OEE.