September 11, 2023

Justice, Commerce and Treasury Departments Issue Comprehensive Tri-Party Voluntary Disclosure Guidelines for Sanctions and Export Control Violations

13 minutes

Companies must take a proactive approach to sanctions and export control compliance to mitigate potential risks. This includes implementing rigorous compliance programs, cooperating with the DOJ, and promptly disclosing and remedying violations. In this episode of Corruption, Crime and Compliance, Michael Volkov explores the latest joint compliance notice issued by the DOJ, Department of Commerce, and Department of the Treasury. This notice provides crucial guidelines on voluntary disclosure for sanctions and export control violations, shedding light on the increasing enforcement of such controls. He discusses the intricate relationship between sanctions enforcement and the FCPA and offers a keen understanding of how businesses can safeguard their interests and comply with global standards.

You’ll hear Michael talk about:

The landscape of sanctions enforcement is rapidly evolving, with the Department of Justice (DOJ) and the National Security Division designating 25 prosecutors to handle sanctions compliance violations.
Corporate resolutions are becoming the driving force behind settlement processes, and these resolutions could become significant revenue streams for the DOJ. In light of these developments, companies must prioritize sanctions and export control compliance to mitigate potential risks.
The DOJ's Joint Criminal Enterprise (JCE) Guidance provides a detailed guideline for voluntary disclosures of possible violations. The JCE Guidance emphasizes the importance of prompt disclosure and swift remediation after uncovering potential violations.
Generally, the DOJ will not seek prosecution if a company fully discloses a violation, cooperates wholeheartedly, and takes remedial actions. However, this is not a blanket assurance; aggravating factors such as widespread criminal activity or attempts by upper management to conceal violations can influence this stance.
Voluntary self-disclosure is not merely a bureaucratic step; it can potentially be a shield, allowing companies to significantly reduce or even bypass criminal liability.
Full cooperation entails timely preservation of pertinent documents, streamlined witness interviews, and proactive identification of avenues for in-depth DOJ investigation.
Implementation of rigorous compliance programs, complemented by suitable disciplinary actions, can tilt the scales in favor of companies during evaluations.
The JCE Guidance underscores recent modifications to the disclosure and enforcement policies adopted by the Bureau of Industry and Security (BIS) and the Office of Foreign Assets Control (OFAC). Notably, the BIS has ramped up penalties for companies that remain tight-lipped about significant potential violations.
The efficacy of a compliance program, particularly its prowess in identifying and rectifying compliance gaps, plays a monumental role in BIS case resolutions.

KEY QUOTES

“Companies are about to face aggressive, coordinated prosecutions for sanctions and export control violations.” - Michael Volkov

“[The] DOJ noted that a prompt, voluntary self disclosure provides a means for a company to reduce, and in some cases, avoid altogether, the potential for criminal liability moving forward, where a company voluntarily self discloses potentially criminal violations, fully cooperates, and timely and appropriately remediates the violations.” - Michael Volkov

“The existence, nature, and adequacy of a company's compliance program, including its success at self identifying and rectifying compliance gaps, is itself considered a factor under settlement guidelines.” - Michael Volkov

Resources:

Michael Volkov on LinkedIn | Twitter

The Volkov Law Group

Departments of Justice, Commerce and Treasury Issue Joint Compliance Note on Voluntary Self-Disclosure of Potential Violations

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