The State Department’s Directorate of Defense Trade Controls (DDTC) recently published new guidance concerning voluntary disclosures in the case of potential export control violations.
Many of the Frequently Asked Questions provided by DDTC deal with basic issues of when and how to file a voluntary disclosure with the agency. For instance, persons who believe they may have violated the International Traffic in Arms Regulations (ITAR) are strongly encouraged to voluntarily disclose the full circumstances involved to DDTC, even if it may be uncertain whether a violation took place.
Note: The agency points out that ITAR mandates the disclosure of certain types of violations and the failure to do so may itself constitute a violation.
Filing a Voluntary Disclosure
Anyone who believes they may have violated any export control provision should submit voluntary disclosures pursuant to ITAR § 127.12 — you do not have to be registered with DDTC to do this. A third-party representative, such as a consultant or outside legal counsel, may also prepare and submit voluntary disclosures to DDTC on behalf of another.
If a potential violation is discovered, DDTC should be notified immediately, even if all the required information is unavailable at the time. In such cases, the disclosing party has 60 days from the date of initial notification to conduct a thorough review and submit a full disclosure in accordance with ITAR § 127.12(c)-(e) .
Voluntary disclosure submissions should also include:
- A first page with your company’s letterhead;
- Contact information (including email address);
- Documentation substantiating any claims made within the submission (e.g., proof of corrective actions, relevant compliance procedures in effect at the time the violation occurred, etc.); and
- A certification, signed by an empowered official (see ITAR § 120.25) or a senior officer, stating that all of the representations made in connection with the voluntary disclosure submission are true and correct to the best of that person’s knowledge and belief.
DDTC indicates that, if, following a thorough internal review, you are still unable to determine whether an actual violation occurred, you should include, as part of your voluntary disclosure, a description of the investigation carried out along with “an explanation as to your inability to confirm the violation.”
DDTC has also provided new FAQs concerning the issue of debarment, which occurs when persons or entities have been convicted of violating the Arms Export Control Act and therefore prohibited from participating directly or indirectly in any activities that are subject to the ITAR.
Debarment can be either statutory (following convictions for AECA violations) or administrative (following administrative enforcement proceedings) and is further defined in ITAR §127.7
Debarred parties are ineligible to participate directly or indirectly in ITAR-controlled activities until reinstated. Debarment is typically for three years, but reinstatement must be requested by the debarred party and approved by the Department of State.
Note: Reinstatement is not automatic.
The DDTC also explains how to address uncertainty regarding whether an individual is in fact the person identified as a statutorily or administratively debarred party.
While these new FAQs provide useful guidance to help keep you compliant with ITAR and DDTC requirements, export control issues can still be very complex. Should you have any questions in this regard, don’t hesitate to contact our knowledgeable Global Trade Services team.