Tri-Seal Enforcement Event Insights

Oct. 4, 2024
By: Marvin E. McPherson

If compliance is not top of mind for your company, be cautious. Long gone are the days where the possibility of even small violations may go overlooked. As discussed in Multilateralism Increases Odds of Catching Export Violations, the U.S. government is increasing its connectivity with other countries and domestic agencies in order to increase the possibility of catching bad actors.

The Tri- Seal agencies (collectively “OFAC, DOJ, and BIS”) at the Customs and International Trade Bar Association’s (CITBA) Sanctions and National Security Committee Tri-Seal Enforcement event, emphasized that collaboration between the agencies. The Tri- Seal collaboration extends beyond the normal agencies usually involved in export controls and sanctions but are data sharing with other agencies including Customs and the FBI.

At the Enforcement event, the Tri- Seal panel stressed their heavy involvement in investigations and charges that demonstrate a particular set of facts that can be demonstrative to other companies of what not to do. The Tri- Seal panel advised companies to take compliance seriously, and when there is a violation to use the voluntary disclosure process to help mitigate potential penalties. The panel also emphasized that once as violation has been discovered, that companies should disclose openly and accurately. One of the panelists warned that an administrative violation may easily become criminal violation with only one email. The panel highlighted an administrative settlement published by Department of Commerce’s Bureau of Industry and Security (BIS). The settlement of $439,992 was against a Texas company, First Call International Inc. (First Call) (see our story here).

Serious violations that are purposefully hidden or left undisclosed are considered egregious violations, which can significantly impact the penalties a company faces. The Tri-Seal Enforcement Event panel emphasized that voluntary self- disclosures could mitigate penalties, though failure to disclose could worsen the consequences. Importantly, companies were reminded that information shared with one agency may reach others, as interagency communication is frequent, so it is important to disclose to all agencies that may have jurisdiction.

An important take away from both recent cases and Tri-Seal Enforcement Event panel discussion is that compliance programs and thorough investigations are important strategies for mitigating large and significant penalties during enforcement proceedings. If you need further assistance or have specific questions about the voluntary disclosure program or performing an internal investigation, please contact any attorney at Barnes Richardson and Colburn.