Unveiling of Tri-Seal Compliance Note: Streamlining Voluntary Disclosures for Export Controls and Sanctions Violations

Pieter Gunst03 mins

In a recent development, the Departments of Justice (DOJ), Commerce, and Treasury made a joint announcement on June 26, 2023. They issued a Tri-Seal Compliance Note that seeks to bring clarity to agency policy memoranda and existing regulations pertaining to voluntary self-disclosures (VSDs) of export controls and sanctions violations. This move comes as an essential cue for large corporations and law firms which often face complexities regarding the proper method, benefits, and risks of VSDs.

Brought to public notice via
this report
, this guideline expects to facilitate a more transparent, reliable, and systematic means for entities to disclose their export control and sanctions violations, if any. The guidance is conclusive and stringent enough to prompt the firms to adopt a proactive approach towards disclosing any inadvertent violations, thus maintaining their compliance integrity, and potentially mitigating subsequent legal repercussions.

Let’s draw insight into a few key takeaways that mandate keen attention:

  1. The notice provides a comprehensive summary of existing VSD policies. This is crucial for firms to align their disclosure strategies to the specified guidelines and streamline their processes.
  2. While encouraging firms to self-disclose, the regulators clarify that companies must be thorough in their internal investigations before reaching out. Hastened and unsubstantiated voluntary disclosures may result in counterproductive outcomes.
  3. VSDs can act as mitigation factors in enforcement actions. Hence, firms can consider this as a potent strategy to manage risks and reduce punitive damages in case of potential violations.
  4. However, the regulators also caution that voluntary disclosures do not guarantee complete absolution. The gravity of violations and the disclosing firm’s compliance history are significant factors considered during the enforcement action.

This Tri-Seal Compliance Note, therefore, proves to be a refined tool for aiding companies and their legal advisors in the ambiguous realm of export controls and sanctions violations. Stay tuned for further updates and implications of this vital development.