On April 30, 2025, the U.S. Department of Justice (DOJ) announced it would not prosecute the Universities Space Research Association (USRA) for alleged violations of the Export Administration Regulations (EAR). This marks the DOJ's second declination in the last twelve months under the National Security Division's (NSD) Enforcement Policy for Business Organizations (NSD VSD Policy), and the first since the Trump Administration came into office. This decision by DOJ underscores the importance of proactive corporate compliance measures.
The case arose from a former USRA employee's unauthorized export of U.S. Army-developed aviation software, controlled under the EAR, to a Chinese university listed on the Department of Commerce's Entity List. The employee knowingly transferred the software without the required export license. DOJ also announced that the former USRA employee pleaded guilty to willfully violating the EAR, and a federal court sentenced the former employee to 20 months' imprisonment.
Despite the seriousness of the conduct, DOJ/NSD credited USRA for its timely and proactive response. According to DOJ's press release, several factors supported its decision to decline prosecution under the NSD VSD Policy.
- Prompt Self-Disclosure: Within days of learning of the USRA employee's admission of wrongdoing to USRA's counsel, and before completing its own internal investigation, USRA self-disclosed the potential violations to NSD.
- Cooperation: USRA provided "exceptional and proactive cooperation" with the ensuing criminal investigation by proactively identifying, collecting, disclosing relevant evidence to investigators (including foreign language evidence and evidence located overseas), and providing timely responses to the government's requests for information and evidence.
- Effective Remediation: USRA remediated the root cause of the misconduct by terminating the employee involved, disciplining his supervisor for failing to supervise appropriately, and significantly improving its internal controls and compliance program.
- Restitution: USRA compensated the government $255,000 as restitution, representing the former employee's $94,000 salary and $161,000 in embezzled sales.
This outcome aligns with the revised NSD VSD Policy, which presumes a declination or non-prosecution agreement, at its discretion, for companies that voluntarily disclose potential willful violations, fully cooperate, and timely remediate—assuming there are no aggravating factors. This declination of prosecution serves as a compelling example of the benefits of proactive compliance, self-reporting, and cooperation with NSD.
- Self-Disclosuring Violations: Organizations that act quickly to report potential violations can benefit from reduced penalties—or even receive declinations of prosecution.
- Strong Internal Controls are Crucial: Robust compliance programs can help detect and respond to potential violations before they escalate.
- Cooperation Pays Off: Active cooperation with law enforcement agencies, particularly when it facilitates individual prosecutions of bad actors, may influence DOJ's resolution decisions.
The DOJ's decision in the USRA case reaffirms (1) the NSD VSD Policy is active and in effect, and (2) it highlights the tangible benefits of voluntary self-disclosures and in cooperating with the enforcement of export control laws. Export compliance and international trade professionals should view this as a precedent emphasizing the value of well-functioning compliance programs and the importance of acting decisively when violations are discovered.
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.
