The US Department of Justice has revised the 'Export Control and Sanctions Enforcement Policy for Business Organizations' to incentivize companies to voluntarily self-disclose criminal violations of primary export control and sanctions laws. Indian companies should consider upgrading their compliance architecture to benefit from this change.
Indian companies with global operations or those engaged in global trade have been at the receiving end of increased sanctions enforcement by the US administration. Violation of sanctions laws could mean severe penalties (both civil and criminal) for such companies. Recently, the National Security Division of the Department of Justice (DOJ) announced the revised 'Export Control and Sanctions Enforcement Policy for Business Organizations' (Policy) to encourage voluntary self-disclosure with respect to criminal violations of sanctions and primary export control laws.
The Policy expressly creates the presumption that a company will receive a non-prosecution agreement (NPA) and will not be required to pay a fine when the company: (a) voluntarily self-discloses export control or sanctions violations to the DOJ, (b) fully cooperates, and (c) quickly and appropriately remediates the underlying issues that led to the wilful violations.
This is significant because the Policy clearly demonstrates the behaviour expected from companies to be eligible for an NPA. It is also quite imperative, as a result, that companies invest appropriately in creating systems and processes required to detect and highlight these violations. Further, the DOJ expects companies to remediate the underlying issues. An effective remediation plan should include a thorough analysis of the causes of the misconduct, implementing an effective compliance program, disciplining the employees involved in the misconduct, retaining all business records and taking any other steps that would demonstrate recognition of the seriousness of the company's misconduct, acceptance of responsibility for it and implementation of remedial measures to prevent recurrence.
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