The Executive Role in Culturing Export Control Compliance

Abstract

The control of exports for national security purposes are governed by a complex web of treaties, laws, and regulations. Controls on the export of dual-use technologies (technologies for which there are legitimate civilian and military uses) are regulated by the Export Administration Regulations overseen by the Department of Commerce. When a suspected violation is found, Commerce can issue a letter of warning, refer the case for criminal prosecution, or pursue administrative penalties. This Note discusses the penalty guidance that Commerce uses to determine appropriate levels of administrative penalties. It argues that one factor, the corporate culture of the offending company, which is relegated by Commerce to an aggravating or mitigating circumstance is actually vitally important in achieving the goals of export enforcement - deserving far more than its treatment as an aggravating or mitigating circumstance. In fact, it is vital for determining primary liability and is the best way to tie together the role that individuals play in corporate behavior.

Keywords: Export controls, BIS, EAR, export compliance, corporate culture

JEL Classification: K23, L21