Violations / Penalties

Violations under the EAR, ITAR and OFAC sanctions may respectively result in both criminal and administrative penalties.

Export Administration Regulations (EAR)

Penalties:

Violations of the Export Administration Regulations, 15 C.F.R. Parts 730-774 (EAR) may be subject to both criminal and administrative penalties. Under the Export Control Reform Act of 2018 (50 U.S.C. §§ 4801-4852) (ECRA), criminal penalties can include up to 20 years of imprisonment and up to $1 million in fines per violation, or both. Administrative monetary penalties can reach up to $300,000 per violation or twice the value of the transaction, whichever is greater. In general, the administrative monetary penalty maximum is adjusted for inflation annually.

Violators may also be subject to the denial of their export privileges as further described below. A denial of export privileges prohibits a person from participating in any way in any transaction subject to the EAR. Furthermore, it is unlawful for other businesses and individuals to participate in any way in an export transaction subject to the EAR with a denied person.

International Traffic in Arms Regulations (ITAR)

DDTC Compliance Actions:

Violations

ITAR violations may result in civil and/or criminal penalties, which can include both fines and debarment (legal exclusion from transactions subject to the ITAR). The Directorate of Defense Trade Controls is responsible for civil enforcement of the regulations, while the Department of Justice handles criminal matters.

ITAR violations can have other consequences as well, including the denial/revocation of licenses and other export authorizations, compliance oversight, and the loss of business opportunities.

Alleged civil violations of the ITAR are often resolved through a consent agreement between the alleged violator and the Department. Consent agreements often include a monitoring component, remedial steps, and a monetary penalty, and can run for several years.

Penalties

Civil
Pursuant to ITAR §128

• $1 million+ per violation
• Debarment
• Generally settled through a negotiated Consent Agreement

Criminal
Pursuant to AECA 22 U.S.C. 2778(c)

• $1 million, or up to 20 years’ imprisonment
• Debarment

Office of Foreign Assets Control (OFAC)

Civil Penalties and Enforcement Information

31 CFR Appendix A to Part 501 - Economic Sanctions Enforcement Guidelines:

II. F. Criminal Referral. In appropriate circumstances, OFAC may refer the matter to appropriate law enforcement agencies for criminal investigation and/or prosecution. Apparent sanctions violations that OFAC has referred for criminal investigation and/or prosecution also may be subject to OFAC civil penalty or other administrative action.

 

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