The recent decision by the National Security Division at the Department of Justice to decline prosecution in a trade controls case involving MilliporeSigma has generated significant discussion in the legal community. Last month, the DOJ announced its declination to prosecute the biochemical company Sigma-Aldrich Inc.—doing business as MilliporeSigma—after the company voluntarily disclosed trade controls crimes. This declination marks the first of its kind under the NSD Enforcement Policy for Business Organizations, prompting some speculation about whether the DOJ is adopting a more lenient stance on trade controls violations. However, legal experts caution that this case alone may not be indicative of a broader trend.
Unlike the non-prosecution agreement reached with SAP SE in 2021, which mandated stringent compliance and cooperation obligations, the MilliporeSigma case shows unique mitigating factors that contributed to the DOJ’s decision. For instance, the DOJ found that MilliporeSigma made no unlawful profit from the violations, which were carried out by a rogue employee and an external conspirator. The violations also did not pose a “significant threat to national security,” as the quantities involved were limited and most products did not require export licenses to China. In contrast, SAP’s violations entailed willfully exporting software to Iran and providing cloud services to users located in the sanctioned country, all contributing to unlawful profits and serious national security implications.
The 2023 and 2024 revisions of the NSD policy explicitly mentioned that the NSD has the discretion to issue a declination, a point emphasized in the MilliporeSigma resolution. This stands in stark contrast to earlier versions, which only referenced the possibility of a non-prosecution agreement. Changes in policy language aside, the specific circumstances of the MilliporeSigma case make it an outlier. As Steven Fagell and Eric Sandberg-Zakian of Covington & Burling suggest, the facts in the MilliporeSigma case present unique mitigating factors that may not be present in future cases. Companies contemplating voluntary disclosures will need to closely monitor future DOJ actions to determine if this declination signals a shift in enforcement leniency or remains a rare exception.
While Deputy Attorney General Lisa Monaco has advocated for more lenient treatments for companies that voluntarily disclose wrongdoing, full cooperation, and timely remediation, the DOJ’s actions in subsequent cases will likely provide more clarity on the agency’s stance. For now, the MilliporeSigma case serves as a noteworthy instance but one that should be interpreted with caution regarding broader DOJ policy shifts.
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