When considering ITAR violation penalties and ITAR fines in the export control regulations, 22 CFR 127.10, the Assistant Secretary for Political-Military Affairs can impose civil penalties for ITAR violation and also for violating the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR).
ITAR Violation Penalties BIS investigations in FY 2016 resulted in the criminal conviction of 32 individuals and businesses for export violations, as compared to 31 convictions in FY 2015. The penalties for these convictions came to $274,500 in criminal fines, more than $79,077,400 in forfeitures, and more than 883 months of imprisonment, compared to $156,416,030 in criminal fines, more than $84,496,015 in forfeitures, and more than 487 months of imprisonment in FY 2015.
In FY 2016, BIS investigations resulted in the completion of 39 administrative export and antiboycott actions against individuals and businesses and $23,323,000 in civil penalties, as compared to 51 actions and $15,111,200 in civil penalties in FY 2015. Of the 39 actions closed in FY 2016, four involved antiboycott violations that resulted in total civil penalties of $268,000.
In 2014, 39 individuals and business convicted in criminal cases; $137,808,756 in criminal fines; $1,318,832 in forfeitures, and 568 months of imprisonment. Also in 2014, there were 44 administrative cases; $60,488,000 in administrative penalties.
These are sobering statistics that highlight the importance of export control compliance.
How We Can Help
When your company violates the law or fails to conduct an internal ITAR audit, you may have to consider agreeing to oversight agreements or pay trade compliance fines. At Watson & Associates, LLC , our lawyers and consultants help with:
- Reviewing and drafting instructions for oversight agreements
- Help avoiding ITAR violations and mistakes
- Internal ITAR audits
- Acquiring export and import licenses including DSP-5 export licenses
- Assistance with ITAR violation penalties and compliance with 22 USC 2778
- Development of ITAR policies and internal controls
- Help categorizing technical data for the business.
- Establishing preventative measures for avoiding penalties and itar fines.
- Legal advice and help for defense contractors.
- Ongoing legal and consulting needs.
Call our attorneys and ITAR consultants at 1-866-601-5518 for a Free Initial Consultation.
ITAR consultants and import export control lawyers and EAR certification consultants: Need an internal ITAR audit, Call ITAR Attorneys
22 USC 2778 ITAR Violations Penalties & International Trade Compliance Violations
Civil ITAR violation penalties and trade compliance fines can include fines to the U.S. Treasury and a Consent Agreement. The agreement usually requires that the company implement internal policies and controls.
- Seizure and forfeiture in attempts at illegal exports.
ITAR Penalties for Non-Compliance with Export Control Laws
ITAR penalties and trade compliance sanctions for non-compliance with export control regulation are quite hefty. A company’s future can be crippled when individuals and corporations are levied for international trade or import export violations.
DDTC has announced effective August 1, 2016, the maximum amount assessed for a Civil Monetary Penalty will change. For each violation of 22 USC 2778 charged, the potential civil penalties will increase from $500,000 to $1,094,010 — a substantial increase of more than 100% per violation.
See important information on ITAR DSP-5 Licensing Requirements for Foreign Employees.
ITAR fines and ITAR penalties not only include substantial monetary fines and jail time, the loss of all federal funding and import export privileges can be devastating.
- EAR Violations can bring civil penalties of $10,000 to $120,000 per violation and criminal penalties of $50,000 to $1 million per violation along with up to 10 years in prison.
- ITAR Fines and ITAR Violations and Penalties can include civil penalties of $500,000 per violation and criminal penalties of up to $1 million per violation along with up to 20 years in prison.
- OFAC Violations under OFAC regulations can include civil penalties of $250,000 per violation and criminal penalties of up to 20 years in prison.
See also information about the North American Trade Agreement Act.
Helpful measures can include a special Compliance Officer (SCO) and development of a comprehensive export control tracking system.
ITAR Oversight Agreements
Consent agreements or oversight agreements can be beneficial when companies have quite a bit of work to do and when the government is willing to work with the company.
What Type of Activities Require An Oversight Agreement?
- Supporting Direct Commercial Sales to Foreign Parties
- Providing Overseas Maintenance or Training Support
- Technical Studies, Evaluations, Demonstrations or Consultations with Foreign Parties
- Release of Manufacturing Data or Rights
- Efforts to Import Technology from Abroad
- Supporting a Foreign Military Sales Case (Beyond scope of LOA)
- Supporting U.S. government-Sponsored Foreign Contracts
The government agency will decide the appropriate level of compliance required for each ITAR violation and what type of consent oversight agreements are needed.
According to the Department of State: Pursuant to 22 CFR 127.10, the Assistant Secretary for Political-Military Affairs is authorized to impose civil penalties for violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR).
Imposition of civil penalties generally includes the payment for itar violation penalties to the U.S. Treasury and a Consent Agreement, under which the company is required to institute enhanced compliance measures. The Consent Agreement outlines the measures required to enhance compliance programs. Call us for immediate help with ITAR penalties.
These may include appointment of a Special Compliance Officer (SCO), institution of a policy of denial, debarment, conduct of comprehensive audits, or institution of a “cradle-to-grave” export tracking system.
Each Consent Agreement is tailored to the export violations that occurred, the cooperativeness of the company in coming to resolution, and the level of compliance measures already in place at the company at the time when the Consent Agreement enters into force.
The Department may also determine it appropriate in other circumstances to enter into an Agreement with an entity to oversee the implementation of enhancements to the entity’s compliance program.
Upon signing of Consent Oversight Agreements and accompanying documents, they are made available to the public.
When you are involved in ITAR statutory penalties violations and require supervision through a monitoring agreement, the public is made aware of the violation and the agreement is also provided to the public.
The U.S. Department of State has posted the below companies involved with ITAR violation penalties and ITAR fines.
73 FR 20357, April 15, 2008, Public Notice 6190 (PDF, 45KB)
Policy on Review Time for License Applications
NDPD 56, signed January 22, 2008, directs review and adjudication of license applications within 60 days of receipt, except in case where national security exceptions apply, which are described in this Notice.
73 FR 20349, April 15, 2008, Public Notice 6189 (PDF, 67KB)
Notifications to the Congress of Proposed Commercial Export Licenses
Notice is hereby given that the Department of State has forwarded the attached Notifications of Proposed Export Licenses to the Congress on the dates indicated pursuant to sections 36(c) and 36(d) and in compliance with section 36(f) of the Arms Export Control Act (22 USC 2776).
73 FR 19778, April 11, 2008, Public Notice 6187 (PDF, 56KB)
Amendment to the ITAR: The United States Munitions List
The Department of State is proposing to amend the text of the International Traffic in Arms Regulations (ITAR), Part 121, to add language clarifying how the criteria of Section 17(c) of the Export Administration Act of 1979 (“EAA”) are implemented in accordance with the Department of State’s obligations under the Arms Export Control Act (“AECA”), and restating the Department’s longstanding policy and practice of implementing the criteria of this provision.
Nationwide Help With ITAR Penalties
Our ITAR compliance lawyers help import export businesses to resolve issues relating to ITAR violation penalties, ITAR fines, and oversight agreements and other trade compliance matters throughout the United States and overseas including Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming, and Virgin Islands. Call our government contract protest attorneys today for immediate help. 1-866-601-5518.
Cities in which our ITAR compliance lawyers help import export businesses to resolve issues relating to ITAR violations and export administration regulation penalties, oversight agreements and other trade compliance include Anchorage, AK; Atlanta, GA; Austin, TX; Chicago, IL; Colorado Springs, CO; Houston, San Antonio, Wichita Falls, Dallas, TX; Denver, Colorado; Indianapolis, IN; Las Vegas, NV; Los Angeles, CA; Miami, FL; Philadelphia, PA; San Antonio, TX; San Diego, CA; San Francisco, CA; San Jose, CA; Santa Clara, CA; and Tampa, FL.
For help with ITAR penalties, fines and ITAR violations, call the export control lawyers at Watson & Associates, LLC. 1-866-601-5518.