BIS Compliance Services

Our Lawyers and Former Federal Agents Assist with All Aspects of U.S. Bureau of Industry and Security (BIS) Compliance

John W. Sellers — **Attorney John Sellers**
BIS Compliance
Team Lead
Former DOJ Trial Attorney

**Glenn Karabeika**
BIS Compliance Team
Former HSI Special Agent

The U.S. Bureau of Industry and Security (BIS) strictly enforces compliance with the federal Export Administration Regulations (EAR) and other federal export and anti-boycott statutes and regulations. Violations can expose companies and individuals to substantial penalties and pose risks to national security, so a comprehensive approach to compliance is key. We assist companies of all sizes with all aspects of BIS compliance, ensuring that our clients have the protocols, processes, and documentation they need to withstand scrutiny from the BIS if necessary.

As with all aspects of federal export compliance, effectively managing BIS compliance requires implementation of custom-tailored policies and procedures that address companies’ specific obligations and risks. By working closely with our clients’ executives and key stakeholders, we are able to clearly identify our clients’ specific obligations and risks and help them manage export-related decisions with confidence and clarity.

BIS: “Eight Principles for an Effective Compliance Program”

While custom-tailoring is essential to the effectiveness of a BIS compliance program, companies must also give due consideration to the BIS’s specific compliance-related concerns. The BIS highlights many of these concerns in its annual publication, Don’t Let This Happen to You, where it outlines “eight principles for an effective compliance program.” These eight principles are:

Having “Strong and Continuous Management Commitment” – The BIS takes the position (as do many other federal regulatory agencies) that a top-down commitment to compliance is essential for effective compliance management. According to the BIS, this includes: (i) public supporting the company’s BIS compliance policies and procedures; (ii) providing sufficient resources for effective BIS compliance management; and, (iii) supporting internal export compliance training.
Conducting “Frequent” Risk Assessments – The BIS advises that companies with U.S. export operations should conduct “frequent” risk assessments to identify and mitigate potential vulnerabilities. What qualifies as “frequent” (and what scope of risk assessment is necessary) for purposes of an effective export compliance program will vary between companies.
Developing Custom-Tailored Export Authorization Procedures – To effectively manage BIS compliance, companies must implement custom-tailored export authorization procedures based on “jurisdiction, classification, licensing, and screening.” The BIS advises that this is “vital” for preventing the export of unauthorized items and other EAR violations.
Focusing on Adequate Recordkeeping – According to the BIS, exporters and other companies that are subject to the EAR should “[a]ssign individuals roles in recordkeeping and ensure procedures meet the requirements in § 762.4 of the EAR.” Under § 762.4, companies must keep “original records” related to their export and reexport operations unless they comply with the requirements for generating and storing copies of original records established in other sections of the EAR.
Requiring Training for All Staff Involved in Export and Reexport Operations – The fifth of the BIS’s eight principles for an effective compliance program is, “require[ing] training for all employees . . . whose responsibilities relate to exports in order to keep up with changing regulations and . . . network with other export compliance practitioners.” This includes requiring training not only for operational personnel, but for support staff as well.
Performing “Regular” BIS Compliance Audits – Along with conducting “frequent” risk assessments, the BIS also advises that companies should conduct “regular” audits of their BIS compliance programs. The focus of these audits should be, “to gauge how well procedures are implemented and how elements need to be augmented,” to maintain compliance and strengthen the company’s integrated system over time.
Implementing Procedures to Proactively Address Compliance Issues – Along with taking steps to maintain compliance, the BIS advises that companies should also implement procedures to “handle compliance issues,” including, “how to complete corrective actions when a violation is found.” Crucially, while this may involve taking corrective action internally, it may also involve submitting a voluntary self-disclosure to the BIS or its Office of Export Enforcement (OEE).
Maintaining a Current BIS Compliance Manual – The BIS also emphasizes the importance of maintaining a current compliance manual. Companies should update their compliance documentation as their obligations and risks change over time, and they should ensure that the most-recent version is available to all relevant personnel.

While these are some of the most important aspects of an effective BIS compliance program, these are by no means the only concerns that exporters and other companies need to address. The EAR are extraordinarily detailed and complex, establishing varying recordkeeping, licensing, and other requirements for different types of controlled products. Once again, a custom-tailored approach is key, as different companies’ obligations and risks related to BIS compliance can vary widely.

Dr. Nick Oberheiden

Founder

Attorney-at-Law

Lynette S. Byrd

Former DOJ Trial Attorney

Partner

Brian J. Kuester

Former U.S. Attorney

Hon. Kevin McCarthy

55th Speaker, U.S. House of Representatives (ret.)

Government Consultant

Mike Pompeo

Of Counsel

Former U.S. Secretary of State

John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara

Federal Appeals Attorney

Nicholas B. Johnson

Former Prosecutor

Roger Bach

Former Special Agent (DOJ)

Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen

Former Supervisory Special Agent (FBI)

Additional Considerations Regarding BIS Compliance: Factors for Enforcement

When it comes to managing BIS compliance, specifically addressing the factors that can increase or mitigate the risks of facing a BIS investigation can be an effective strategy as well. Under the EAR, there are various “aggravating” and “mitigating” factors that the United States government considers when determining what penalties are on the table. For example:

Aggravating Factors

Willful or Reckless Violations – Knowingly ignoring a company’s compliance obligations can significantly increase the risks of facing BIS scrutiny. This includes “willful ignorance,” which is not a defense to BIS noncompliance.
Awareness of the Conduct at Issue – Likewise, if a company fails to promptly address a known compliance issue, this can increase the risks of facing BIS scrutiny as well. This is why the BIS recommends that companies’ compliance programs include procedures for identifying and remedying potential concerns.
Harm to Regulatory Program Objectives – If an EAR violation poses specific risk to a BIS program objective, such as targeting entities contributing to weapons of mass destruction or enforcing sanctions applicable to China or Iran, this can also substantially increase the stakes of facing a BIS investigation. This is yet another reason why a comprehensive and custom-tailored approach to BIS compliance is essential.

Mitigating Factors

Remedial Response – While ignoring known compliance issues can increase companies’ risk exposure, relying on documented policies and procedures to implement an effective remedial response can have the opposite effect.
Exceptional Cooperation with the OEE – In the event of an investigation, cooperating with the OEE to understand why a violation occurred and what can be done to rectify it can also help to mitigate the risks involved. As a result, implementing policies and procedures for working with the OEE is critical as well.
Voluntary Self-Disclosure – According to the BIS, voluntary self-disclosures are, “a compelling indicator of a party’s intent to comply with U.S. export control requirements,” and will be taken into account when “determin[ing] the appropriate corrective action when violations have taken place.”

Once again, these are just examples. If you choose to work with Oberheiden P.C. for BIS compliance, our lawyers and consultants will assist you with addressing all relevant factors based on the unique nature and scope of your company’s export operations.

FAQs: Maintaining an Effective BIS Compliance Program

What Types of Companies in the U.S. Need to Maintain BIS Compliance?

Exporters, freight forwarders, consignees, companies that rely on exporter services, and various other types of companies may need to maintain BIS compliance to avoid facing administrative, civil, or criminal penalties. If your company is involved in exporting or reexporting in any capacity, you will want to consult with an experienced lawyer about your company’s BIS compliance obligations.

What is Required to Maintain an Effective BIS Compliance Program?

Maintaining an effective BIS compliance program and ensuring effective export control generally involves complying with all applicable provisions of the Export Administration Regulations (EAR) and other pertinent sources of federal authority. However, due to the wide range of companies and operations that are subject to the EAR (and in some cases, to a treaty compliance system requirement) a custom-tailored approach is essential to effective compliance management.

What Are the Risks of Failing to Maintain BIS Compliance?

The risks of failing to maintain BIS compliance generally include administrative sanctions (i.e., denial of licenses or debarment), civil monetary penalties, criminal fines, and federal imprisonment. However, whether a BIS enforcement action is administrative, civil, or criminal in nature will depend on the specific circumstances involved. In any case, implementing an effective compliance program is the first step toward avoiding unnecessary consequences.

Do I Need to Engage Outside Counsel for BIS Compliance?

Due to the complexity of the EAR and the risks of violating the federal export and anti-boycott regulations, engaging experienced outside counsel for BIS compliance is essential. At Oberheiden P.C., we work closely with our clients to help them implement comprehensive, custom-tailored, and effective BIS compliance solutions.

How Can I Determine if My Company is at Risk of Facing Scrutiny from the BIS?

Determining if your company is at risk of facing scrutiny from the BIS involves conducting an internal compliance audit or risk assessment, reviewing relevant guidance published on the BIS website, and assessing compliance through various other means. To help ensure compliance and to ensure that an audit or risk assessment is protected under the attorney-client privilege, it should be conducted with the oversight of experienced outside counsel.

Speak with a BIS Compliance Lawyer at Oberheiden P.C.

If you have questions (or concerns) about BIS compliance, we encourage you to schedule a complimentary initial consultation at Oberheiden P.C. One of our senior BIS compliance lawyers will be more than happy to help you make informed decisions about your next steps, whether you’re in legal, compliance, or a strategic technology leadership role. To get started, give us a call at 888-680-1745 or tell us how we can reach you online today.