Kathleen Hamann Quoted in Global Investigations Review: BIS Raises Penalty Caps for Major Export Violations
Excerpted from the September 12, 2024 Global Investigations Review
The US Bureau of Industry and Security (BIS) announced rule changes that will allow it to impose greater fines on companies for violating export controls. The agency stated that the rule changes would give them “increased flexibility to determine fair and appropriate penalty amounts.”
BIS said it raised the penalty caps “to recognize that certain transactions are of such high value, that any potential penalty under the cap would not serve as an effective deterrent”.
In another significant policy revision, BIS has “eliminated a rule that gave companies some certainty of a reduction of baseline penalties if a case included certain mitigating factors.” The revisions also finalize a rule that, in part, makes failing to disclose a violation an aggravating factor that can lead to a higher fine.
Pierce Atwood partner Kathleen Hamann, an internationally recognized authority in the field of white-collar enforcement and compliance matters, noted that BIS is, “aligning its corporate enforcement policy with other US agencies like the Department of Justice by giving itself greater discretion to impose larger corporate fines. They really have been left behind by much more severe and headline-grabbing fines that other agencies have been able to bring.”
Kate went on to add, “BIS is putting its money where its mouth is” by adding dedicated personnel to corporate enforcement. The new position will help the agency ensure consistency between corporate settlements now that it has greater discretion to impose penalties,” adding, “If you have this much flexibility and you’re inconsistent about it you’re going to create a whole host of problems.”