BIS Issues Final Rule Setting Deadline for Completing Voluntary Self-Disclosures

by BakerHostetler
Contact

The U.S. Bureau of Industry and Security (BIS) recently issued a final rule to revise the Export Administration Regulations (EAR) governing Voluntary Self-Disclosures (VSDs) by imposing a 180-day deadline for submission of the final, comprehensive narrative account that must be filed after submission of the initial VSD filing. This 180-day filing deadline will apply to initial VSDs received by BIS on or after September 9, 2013, the effective date of the final rule. Initial VSDs submitted to BIS prior to that date would not be subject to the new filing deadline. The new final rule implements the rule initially proposed by BIS on November 7, 2012. (More information on the proposed rule is available here).

Section 764.5 of the EAR (15 C.F.R. § 764.5) outlines the current procedures by which a party that believes it may have violated the EAR may voluntarily disclose the potential violations to the BIS Office of Export Enforcement (OEE). BIS stated in its final rule that imposing a 180-day deadline to complete the VSD is consistent with the practices of other agencies, such as the U.S. Department of State's Directorate of Defense Trade Controls (DDTC) and the Department of the Treasury's Office of Foreign Assets Control (OFAC), which both set deadlines for submission of the final VSD narrative account. BIS also stated that the new deadline is designed to be consistent with the existing requirement under the EAR that an initial VSD be submitted as soon as possible after potential violations are discovered.

The final rule also authorizes OEE to extend the 180-day deadline if the disclosing party shows that more time is "reasonably necessary" to complete the final narrative account. In response to public comments received after issuance of the proposed rule in November 2012, BIS revised the final rule to include greater detail about what a request to extend the 180-day deadline should contain. A request for such an extension should show specifically that the party making the request: (1) began its review promptly after discovering the violations; (2) has been conducting the review and preparation of the narrative account as expeditiously as can be expected; (3) reasonably needs the requested extension, despite having acted consistently with (1) and (2); and (4) has considered whether interim compliance or other corrective measures may be needed and has implemented such measures as appropriate in order to prevent recurring or additional violations.

A request for an extension should also provide a proposed timeline for completion and submission of the final narrative account and designate a contact person. The extension request may also include additional information that the requestor reasonably believes is pertinent to the request under the applicable facts and circumstances.

Like the proposed rule, the final rule provides several examples of circumstances that might warrant additional time, including the need to obtain records or information from multiple sources, corporate bankruptcy, large layoffs, acquisition/restructuring or delays in obtaining a BIS classification request or Commodity Jurisdiction determination from the DDTC. However, these example circumstances outlined in the final rule are not "an exclusive list" and consideration of extension requests "will, of necessity, be made on a case-by-case basis." BIS also stated that a statute of limitations tolling agreement will be required prior to an extension being granted, in most circumstances.

The final rule also states that a request for an extension should be submitted to OEE as soon as possible once the disclosing party determines that it will be unable to meet the 180-day deadline. BIS cautioned against submitting an extension request shortly before the 180-day deadline, as the disclosing party could run the risk that OEE will be unable to properly consider and communicate a decision before the deadline. The agency also stated that it expects it will be rare for parties to request an extension in their initial disclosure because it would be unlikely that disclosing parties will have all pertinent information needed to request an extension at the time of the initial VSD filing. In addition, BIS said it is unlikely to grant an extension request that appears to be a "boilerplate" request not based on facts and circumstances specific to the initial VSD, or to grant repeated requests or requests that appear to be submitted on a routine, "it can't hurt to ask" basis.

Note that BIS's 180-day deadline for completing a VSD is more generous than the 60-day deadline imposed by the Directorate of Defense Trade Controls for submission of the final disclosure report for issues arising under the International Traffic in Arms Regulations (ITAR).

View the Federal Register Notice >>

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© BakerHostetler | Attorney Advertising

Written by:

BakerHostetler
Contact
more
less

BakerHostetler on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!