United States: DOJ Establishes Voluntary Self-Disclosure Program For Criminal Violations Of U.S. Economic Sanctions And Export Controls

Key Points

  • New DOJ Guidance establishes a voluntary self-disclosure program for criminal violations of U.S. economic sanctions and export controls. Going forward, companies will need to disclose potentially willful violations to DOJ in addition to DDTC, BIS or OFAC in order to ensure that they will receive cooperation credit from the agency.
  • The Guidance applies to business organizations and their employees who have engaged in "willful" violations of U.S. sanctions and export control laws. Although the Guidance does not apply to financial institutions, they may still benefit from disclosing potentially willful violations of U.S. sanctions and export controls to DOJ.
  • Benefits of disclosure include eligibility for a significantly reduced penalty, possibility of a nonprosecution agreement (NPA), a reduced period of supervised compliance, reduced fine and forfeiture, and the ability to avoid an independent monitor.

On October 2, 2016, the National Security Division (NSD) of the U.S. Department of Justice (DOJ) established a formal, voluntary self-disclosure program for criminal violations of U.S. economic sanctions and export controls and issued guidance relating to cooperation and remediation for companies facing potential criminal violations of U.S. export control and sanctions laws ("Guidance").

What has the Guidance changed?

Prior to the Guidance, voluntary self-disclosures were initially filed with the State Department's Directorate of Defense Trade Controls (DDTC), the Commerce Department's Bureau of Industry and Security (BIS), and/or the Treasury Department's Office of Foreign Assets Control (OFAC), depending on the type of violation. Each agency would assess the disclosure and, where appropriate, could refer the matter to DOJ for further investigation.

Going forward, in order for a company to ensure that it receives full credit for disclosing violations that may be criminal, it will also need to submit a disclosure to DOJ. The voluntary self-disclosures should be submitted to the NSD's Counterintelligence and Export Control Section (CES), which will coordinate with the appropriate U.S. Attorney's Office and the relevant regulatory agencies. Importantly, such disclosures should be submitted in addition to any voluntary self-disclosure submitted to DDTC, BIS or OFAC for violations of the International Traffic in Arms Regulations (ITAR), Export Administration Regulations (EAR) or U.S. sanctions regulations. The Guidance also memorializes DOJ policy on cases that involve voluntary self-disclosures, cooperation and remediation, and builds on the DOJ's continued focus on individual liability in corporate cases.

Similar to the goals of the FCPA disclosure program, DOJ is attempting to incentivize companies to voluntarily self-report willful (i.e., potentially criminal) violations of export controls and economic sanctions, cooperate with DOJ and remediate the issues in order to receive benefits described in the Guidance. Although the Guidance attempts to make more transparent the factors it will consider when companies have disclosed criminal violations of economic sanctions and export controls and/or cooperated with DOJ investigations, DOJ reserves for itself significant discretion as to how to apply the factors to any given case.

Who is affected by the Guidance?

The Guidance applies to business organizations and their employees who have engaged in "willful" violations of U.S. sanctions and export control laws. If a company or its employees engages in potentially willful violations of U.S. sanctions or export control laws, the Guidance encourages voluntary self-disclosure, cooperation and timely remediation activities in order to be eligible for reduced criminal penalties, a nonprosecution agreement (NPA) or a deferred-prosecution agreement (DPA). Although the Guidance states that it does not apply to financial institutions, given their "unique reporting obligations under their applicable statutory and regulatory regimes," it also cautions that this does not suggest that financial institutions cannot benefit from disclosing potentially willful violations of U.S. sanctions and export controls; it encourages financial institutions to disclose such potential willful violations to DOJ.

How will DOJ assess voluntary self-disclosures and cooperation?

DOJ confirmed in the Guidance its often-stated position that disclosures must be self-initiated, timely and complete. Full cooperation, as part of a disclosure submitted to DOJ, now requires companies to meet the threshold requirements set out in the DAG Memorandum on Individual Accountability ("Yates Memo") (see Akin Gump Litigation Alert from September 17, 2015). DOJ provided within the Guidance a number of criteria through which it assesses the company's cooperation and remediation. If cooperation is present, then remediation credit is available if the company (a) implements an effective compliance program; (b) disciplines responsible employees; and (c) takes steps that demonstrate recognition of the seriousness of the conduct, demonstrate acceptance of responsibility and implement measures to identify future risks.

The Guidance also outlines a number of elements of an effective compliance program, including dedicating sufficient resources to the compliance function, appropriately compensating compliance personnel, training, performing effective risk assessments and auditing the compliance program to assess its effectiveness.

While cooperation and remediation are mitigating factors identified by DOJ, the Guidance also notes a number of aggravating factors. These include exports of items controlled for nuclear nonproliferation or missile technology reasons to a proliferator country; exports of items known to be used in the construction of weapons of mass destruction; exports to a terrorist organization; repeated violations, including similar administrative or criminal violations in the past; involvement of senior management; and significant profits from the criminal conduct.

DOJ is encouraging disclosure as part of the Guidance and notes the benefits of disclosure, cooperation and remediation, including eligibility for a significantly reduced penalty, the possibility of an NPA, a reduced period of supervised compliance, reduced fine and forfeiture, and the ability to avoid an independent monitor. Where a company does not voluntarily self-disclose the violation, but nonetheless fully cooperates and remediates, the company may be eligible for a DPA, a reduced fine and forfeiture, and an outside auditor as opposed to a monitor. The Guidance notes that a company that does not voluntarily disclose will "rarely qualify" for an NPA.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions