ÿWPCd ªxcàø¾ƒº¨T£º" m&JË“CªFË* 1™Âˆ”VšÄÅø‚xI›¿í&=qØRAÆï7´²y¤¿6"†%)·ÌX6J¬Àw„(yQ”JÙ¶uòwRÏ:>xL÷JšS:ÆTi“Ùê„íëM¯‰ÝE*ù¥šˆeßikê ºm¼3 Q„ Œí Ž»Y²Åæ ²XÛü7ôD>d™Râ!ñ¶^Q®­ -ZÇ AË­€$P¹Ç™îSèþ€£l³Ë»!óP°@Åçw)”ârCÍ®‡Úõò„OØœ+\˜[ A™8ÄkkS·Þ΢l¸Ëy’žÿ÷šƒŠœ”5Ke”Ogd„ÃÙËèý[·{Uu-2&½Eeøyux§ÄP"]«›t\¦¬Ý™TÈ»”Ó‰ ŠdnH懼tGÅìËMˆjfÚ‰êL—žÇÈXž ³ìÎ7Ï¿vªtkì}†ƒ>ž3Ò­•Ût¯ÞÇ6ù5fî¯=9óŦC˸KtLzí¼Å-ܧœ¬¶³Õÿ\Q™¼RøŠàÍÒG®±´–5üd¤ì2H™wxw°KßØ«÷îß<qC¦æå:@„¯Ž³šÈ€]cÝ/ß¾Ôã–ÔªÅbF ¶#ÉÆUN %Ý 0:ãN^ w+4/C mE\#|x˜Lexmark Optra T612,ä,,,,,ä0(ÖÃ9 Z‹6Times New Roman RegularX(üœ$¡¡ÔUSUS.,Ôfšó6Ï ¸«6ò6dxBackupÿU‹ÿÀÀÀ Ý ƒüœ!ÝÔUSUS.,ÔÝ  ÝÔ_Ôà€¢¢1(#àò òBilling€Code:€€€€3510-33-Pó óˆÐ ° Ðò òDEPARTMENT€OF€COMMERCEó óÐ œì ÐÌò òBureau€of€Industry€and€Securityó óÐ tÄ ÐÌò ò15€CFR€Parts€730,€764€and€766ó óÐ L œ ÐÌò ò[Docket€No.€0612242577-7145-01]ó óÐ $ t ÐÌò òRIN€€€0694-AD63ó óÐ ü L  ÐÌò òAntiboycott€Penalty€Guidelinesó óÐ Ô$  ÐÌò òAGENCY:ó ó€€Bureau€of€Industry€and€Security,€CommerceÐ ¬ü  ÐÌò òACTION:ó ó€Final€RuleÐ ˆØ  ÐÌò òSUMMARY:ó ó€€This€rule€sets€forth€BIS€policy€concerning€voluntary€self-disclosures€of€violationsÐ d´ Ðof€part€760€(Restrictive€Trade€Practices€or€Boycotts)€of€the€Export€Administration€RegulationsÐ T¤ Ð(EAR)€and€violations€of€part€762€(Recordkeeping)€of€the€EAR€that€relate€to€part€760.€€This€ruleÐ @ Ðalso€sets€forth€the€factors€that€the€Bureau€of€Industry€and€Security€(BIS)€considers€when€decidingÐ ,| Ðwhether€to€pursue€administrative€charges€or€settle€allegations€of€such€violations€as€well€as€theÐ h Ðfactors€that€BIS€considers€when€deciding€what€level€of€penalty€to€seek€in€administrativeÐ T Ðantiboycott€cases.Ð ð@ ÐÌò òDATES:ó ó€This€rule€is€effective€August€16,€2007.Ð È ÐÌò òFOR€FURTHER€INFORMATION€CONTACT:ó ó€€Edward€O.€Weant€III,€Director,€Office€ofÐ ¤ô ÐAntiboycott€Compliance,€Bureau€of€Industry€and€Security,€United€States€Department€ofÐ ”ä ÐCommerce,€at€(202)€482-€2381.Ð €Ð ÐÌò òSUPPLEMENTARY€INFORMATION:ó óÐ X!¨ ÐÌò òBackgroundó óÐ 0#€! ÐÌ€€€€€Part€760€of€the€EAR€„„€Restrictive€Trade€Practices€or€Boycotts€„„€prohibits€U.S.€persons€fromÐ %X # Ðtaking€or€knowingly€agreeing€to€take€certain€actions€with€intent€to€comply€with,€further,€orÐ ô%D!$ Ðsupport€an€unsanctioned€foreign€boycott.€€Part€760€of€the€EAR€also€requires€U.S.€persons€whoÐ à&0"% Ðare€recipients€of€requests€ð ð.€.€.€to€take€any€action€which€has€the€effect€of€furthering€or€supportingÐ Ì'#& Ða€restrictive€trade€practice€or€boycott€fostered€or€imposed€by€a€foreign€country€against€a€countryÐ ¸($' Ðfriendly€to€the€United€States€or€against€any€United€States€person€.€.€.ðð€to€report€receipt€of€thoseÐ ¤)ô$( Ðrequests€to€BIS€and€whether€they€took€the€requested€action.€€Part€762€of€the€EAR€€„„Ð *à%) ÐRecordkeeping€„„€requires,€inter€alia,€retention€of€certain€documents€that€contain€informationÐ |+Ì&* Ðrelated€to€the€prohibitions€or€reporting€requirements€of€part€760.€€Collectively,€these€provisionsÐ h,¸'+ Ðof€the€EAR€are€referred€to€in€this€notice€as€the€ð ðantiboycott€provisions.ðð€€BIS€administers€andÐ T-¤(, Ðenforces€the€antiboycott€provisions€through€its€Office€of€Antiboycott€Compliance€(OAC).€€OnÐ ° ÐJune€30,€2006,€BIS€published€a€proposed€rule€regarding€specific€procedures€for€voluntaryÐ œì Ðself-disclosures€of€violations€to€OAC,€guidance€about€how€BIS€responds€to€violations€of€theÐ ˆØ Ðantiboycott€provisions,€and€a€description€of€how€BIS€makes€penalty€determinations€in€theÐ tÄ Ðsettlement€of€administrative€enforcement€cases€related€to€the€antiboycott€provisions.€€AfterÐ `° Ðreviewing€the€public€comments€on€the€proposed€rule,€BIS€is€publishing€this€final€rule.€Ð L œ ÐÌ€€€€€This€rule€does€not€address€disclosure€provisions€or€penalty€determination€factors€in€any€otherÐ $ t Ðmatters€such€as€criminal€prosecutions€for€violations€of€the€antiboycott€provisions€or€tax€penaltiesÐ  ` Ðthat€the€Department€of€Treasury€may€impose€for€antiboycott€violations€that€arise€pursuant€to€theÐ ü L  ÐRibicoff€Amendment€to€the€Tax€Reform€Act€of€1976,€as€implemented€by€Section€999€of€theÐ è 8  ÐInternal€Revenue€Code.€€Voluntary€self-€disclosure€provisions€and€guidance€on€charging€andÐ Ô$  Ðpenalty€determinations€in€settlement€of€administrative€enforcement€cases€that€are€not€related€toÐ À  Ðthe€antiboycott€provisions€are€stated€elsewhere€in€the€EAR.Ð ¬ü  ÐÌ€€€€€BIS€received€comments€from€two€organizations€regarding€the€proposed€rule.€€Collectively,€theÐ „Ô  Ðtwo€organizations€raised€seven€issues.€€Three€of€the€issues€were€general€in€nature€and€fourÐ pÀ Ðaddressed€specific€provisions€of€the€proposed€rule.€Ð \¬ ÐÌòòGeneral€Issues€Raised€by€the€Comments.óóÐ 4„ ÐÌ€€€€€One€commenter€suggested€that€BIS€consult€with€industry€and€provide€guidance€on€what€aÐ  \ Ðcompanyððs€reporting€structure€should€be.€€BIS€concludes€that€this€proposal€is€outside€the€scope€ofÐ øH Ðthe€issues€raised€by€the€proposed€rule.€€BIS€recognizes€that€among€the€entities€that€have€reportingÐ ä4 Ðobligations,€one€could€find€myriad€organizational€structures.€€BIS€believes€that€any€tailoring€ofÐ Ð  Ðthe€manner€of€reporting€to€accommodate€both€an€organizationððs€structure€and€BISððs€need€toÐ ¼  Ðproperly€identify€the€source€of€reports€can€best€be€done€through€consultations€between€theÐ ¨ø Ðorganization€and€BIS€rather€than€through€an€amendment€to€the€regulations.€€BIS€encouragesÐ ”ä Ðorganizations€that€have€questions€about€how€to€submit€reports€to€contact€BIS€for€suchÐ €Ð Ðconsultations.Ð l¼ ÐÌ€€€€€One€commenter€suggested€that€BIS€develop€a€system€to€allow€the€public€to€submit€boycottÐ D!” Ðreports€electronically€€€This€suggestion€is€outside€the€scope€of€the€proposed€rule.Ð 0"€  ÐÌ€€€€€One€commenter€suggested€that€BIS€update€and€publish€its€telephone€advice€guidance€and€lookÐ $X" Ðfor€other€opportunities€to€provide€practical€written€guidance€for€companies€to€use€in€complyingÐ ô$D # Ðwith€boycott€requests.€€This€comment€is€outside€the€scope€of€the€proposed€rule.Ð à%0!$ ÐÌòòComments€Relating€to€Specific€Features€of€the€Proposed€RuleóóÐ ¸'#& ÐÌ€€€€€The€comments€address€four€specific€issues€in€connection€with€the€proposed€rule.€€Those€fourÐ )à$( Ðissues€are:€€the€burden€that€would€be€imposed€by€new€€ðð€764.8€regarding€voluntaryÐ |*Ì%) Ðself-disclosures;€whether€the€provision€of€new€€ðð€764.8(f)€regarding€requests€to€take€action€thatÐ h+¸&* Ðwould€otherwise€violate€€ðð€764.2(e)€is€contrary€to€prior€agency€practice;€whether€new€€ðð€764.8Ð T,¤'+ Ðshould€allow€verbal€voluntary€self-disclosures€with€written€follow-up;€and€whether€the€ruleÐ @-(, Ðshould€provide€more€concrete€incentives€to€disclose€by€making€a€warning€letter€the€maximumÐ ° Ðsanction€for€most€voluntary€self-disclosure€cases.Ð œì ÐÌòòComment€on€Paperwork€BurdenóóÐ tÄ ÐÌ€€€€€One€commenter€stated€that€BIS€had€underestimated€the€costs€large€global€companies€wouldÐ L œ Ðincur€in€complying€with€the€voluntary€disclosure€provisions.€€In€particular,€the€commenter€notedÐ 8 ˆ Ðthat€a€company€with€decentralized€operations€would€incur€costs€measured€in€tens€of€thousands€ofÐ $ t Ðdollars€if€it€conducted€the€five-year€review€of€all€its€operations€recommended€by€BIS.€UponÐ  ` Ðreview,€BIS€acknowledges€that€the€burden€on€large€companies€with€decentralized€operationsÐ ü L  Ðwould€be€greater€than€estimated€in€the€proposed€rule.€€However,€BIS€believes€that€such€burdenÐ è 8  Ðwill€be€justified€in€many€instances€because€of€the€risks€to€the€firm€involved€if€it€performs€a€lessÐ Ô$  Ðcomprehensive€review.€€The€risk€of€conducting€a€review€covering€a€period€shorter€than€five€yearsÐ À  Ðor€that€does€not€include€all€business€units€is€that€some€violations€will€be€made€known€to€OACÐ ¬ü  Ðthrough€other€sources€or€during€the€course€of€an€OAC€investigation€initiated€in€response€to€theÐ ˜è  Ðvoluntary€self-disclosure.€€Such€undisclosed€violations€would€not€receive€the€ð ðgreat€weightððÐ „Ô  Ðmitigating€factor€that€BIS€would€apply€in€settlement€negotiations€to€voluntarily€self-disclosedÐ pÀ Ðviolations€under€this€rule.€€The€larger€penalties€imposed€for€such€undisclosed€violations€mightÐ \¬ Ðexceed€the€cost€of€doing€a€business-wide€five-year€search.€€Hence,€BIS€believes€that€it€isÐ H˜ Ðappropriate€to€recommend€a€five-year€period€for€this€kind€of€review.€€BIS€notes€that€the€proposedÐ 4„ Ðrule€and€this€final€rule€recommend€but€do€not€require€a€review€extending€back€for€a€period€of€fiveÐ  p Ðyears€prior€to€the€initial€notification.Ð  \ ÐÌ€€€€€In€the€proposed€rule,€BIS€stated€that€it€intended€to€treat€the€collection€of€information€related€toÐ ä4 Ðthe€voluntary€self-€disclosure€procedures€in€this€rule€as€an€extension€of€the€scope€of€the€collectionÐ Ð  Ðapproved€under€OMB€control€number€0694-AD58.€Based€on€this€comment,€BIS€re-evaluated€theÐ ¼  Ðburden€hours€associated€with€this€information€collection€and€concluded€that€the€burden€is€largeÐ ¨ø Ðenough€to€justify€a€separate€collection€authorization.€€Therefore,€BIS€sought€and€obtainedÐ ”ä Ðseparate€OMB€authorization€for€the€collection€related€to€the€voluntary€self-€disclosure€procedureÐ €Ð Ðin€this€rule.€The€collection€related€to€the€voluntary€self-disclosure€procedure€in€this€rule€explicitlyÐ l¼ Ðaccounts€for€the€larger€burden€that€would€be€imposed€on€large€companies€with€decentralizedÐ X ¨ Ðlocations€and€is€authorized€under€OMB€control€number€0694-0132€for€which€the€estimatedÐ D!” Ðannual€burden€hours€and€costs€are€1,280€and€$51,200,€respectively.Ð 0"€  ЀÌòòComment€on€€ðð€764.8(f)€and€Prior€Agency€PracticeóóÐ $X" ÐÌ€€€€€One€commenter€raised€an€issue€concerning€the€implication€of€proposed€€ðð€764.8(f).€€€Ð à%0!$ ÐProposed€€ðð€764.8(f)€would€have€provided€a€procedure€by€which€a€person€making€a€voluntaryÐ Ì&"% Ðself-disclosure€of€a€violation€of€the€antiboycott€provision€may€request€authorization€to€takeÐ ¸'#& Ðcertain€actions€with€respect€to€the€transaction.€€The€commenter€expressed€a€belief€that€ð ðtheÐ ¤(ô#' Ðcurrent€OAC€practice€is€not€to€require€companies€to€seek€BIS€authorization€to€continue€with€aÐ )à$( Ðtransaction€after€filing€a€voluntary€disclosure.ðð€€The€commenter€went€on€to€state€that€ð ð[t]heÐ |*Ì%) Ðproposed€rule,€however,€would€impose€such€a€requirement.€.€.€.€if€a€company€were€to€commit€aÐ h+¸&* ÐCategory€B€or€C€violation€it€seems€unreasonable€that€the€company€would€have€to€file€a€voluntaryÐ T,¤'+ Ðdisclosure€and€then€seek€BIS€authorization€to€continue€with€the€transaction.€€A€more€reasonableÐ @-(, Ðapproach€would€be€to€require€BIS€authorization€only€in€those€instances€where€the€companyÐ ° Ðvoluntarily€discloses€a€Category€A€violation.ððÐ œì ÐÌ€€€€€BIS€agrees€that,€in€the€past,€OAC€has€advised€members€of€the€public€who€contacted€OAC€viaÐ tÄ Ðits€telephone€advice€line€a€violation€of€part€760€does€not€preclude€exporting€in€connection€withÐ `° Ðthe€same€commercial€transaction.€€Upon€review,€BIS€has€decided€to€remove€paragraph€(f)€from€Ð L œ Ððð764.8€because€it€is€not€consistent€with€prior€agency€practice.Ð 8 ˆ ÐÌòòComment€Proposing€Allowing€Verbal€Voluntary€Self-DisclosuresóóÐ  ` ÐÌ€€€€€BIS€received€one€comment€expressing€the€opinion€that€the€Bureau€of€Customs€and€BorderÐ è 8  ÐProtection€self-disclosure€procedure€set€forth€in€19€CFR€€ðð€162.74(a)€is€better€than€the€procedureÐ Ô$  Ðin€the€proposed€rule.€€The€procedure€in19€CFR€€ðð€162.74(a)€allows€an€importer€to€make€a€verbalÐ À  Ðdisclosure€to€a€Customs€officer€of€a€violation€with€the€requirement€that€the€disclosure€beÐ ¬ü  Ðfollowed€up€in€writing€within€10€days.€€The€commenter€suggested€that€this€Customs€procedureÐ ˜è  Ðencourages€more€disclosures€by€allowing€the€importer€to€disclose€the€violation€at€the€earliestÐ „Ô  Ðpossible€moment.€€The€ten€day€written€follow-up€deadline€encourages€accurate€and€completeÐ pÀ Ðdisclosures.€€BIS€has€reviewed€19€CFR€€ðð€162.74(a)€and€the€commenterð$ðs€rationale.€€€BIS€notesÐ \¬ Ðthat€19€CFR€€ðð€162.74(a)€applies€to€penalties€for€certain€violations€related€to€tariffs€on€importsÐ H˜ Ðinto€the€United€States.€€Compliance€with€the€disclosure€requirements€in€€ðð€162.74€can€allow€theÐ 4„ Ðimporter€to€pay€a€reduced€penalty€as€compared€with€violations€for€which€no€such€disclosure€takesÐ  p Ðplace.€€The€penalties€are€set€forth€in€19€CFR€€ðð€162.73€and€19€CFR€€ðð€162.73a.€€Generally,€theÐ  \ Ðpenalties€are€expressed€as€a€percentage€of€value€of€the€merchandise€that€was€the€subject€of€theÐ øH Ðviolation.€€BIS€believes€that€violations€of€the€antiboycott€provisions€are€substantively€differentÐ ä4 Ðfrom€the€violations€addressed€by€19€CFR€€ðð€162.74(a).€€As€noted€in€the€preamble€to€the€proposedÐ Ð  Ðrule,€BIS€believes€that€written€initial€notifications€reduce€the€possibility€of€confusion€as€toÐ ¼  Ðwhether€a€particular€communication€was€intended€to€be€a€voluntary€self-€disclosure€and€are€likelyÐ ¨ø Ðto€produce€more€complete€disclosures€than€would€oral€disclosures.€€In€addition,€BIS€believes€thatÐ ”ä Ðpreparing€and€submitting€a€written€submission€of€the€information€required€in€an€initialÐ €Ð Ðnotification,€i.e.,€the€name€of€the€person€making€the€disclosure€and€a€brief€description€of€theÐ l¼ Ðsuspected€violations€and€their€general€nature€and€extent,€is€not€an€onerous€task.€Therefore,€thisÐ X ¨ Ðfinal€rule€makes€no€changes€to€the€provisions€of€the€proposed€rule€that€required€initialÐ D!” Ðnotifications€to€be€in€writing.Ð 0"€  ÐÌòòComment€Regarding€Incentives€to€Self-Disclose€ViolationsóóÐ $X" ÐÌ€€€€€One€commenter€recommended€that€BIS€provide€more€concrete€incentives€for€makingÐ à%0!$ Ðdisclosures€of€violations€of€the€antiboycott€provisions.€€This€commenter€noted€that€although€newÐ Ì&"% ÐSupplement€No.€2€to€part€764€provides€that€voluntary€self-€disclosures€be€given€ð ðGREATÐ ¸'#& ÐWEIGHTðð€as€a€mitigating€factor,€other€language€in€the€supplement€concerning€the€effect€of€otherÐ ¤(ô#' Ðfactors€as€well€as€language€in€new€€ðð€764.8(b)€stating€that€ð ð[t]he€weight€given€to€a€voluntaryÐ )à$( Ðself-disclosure€is€solely€within€discretion€of€BIS€and€the€effect€of€voluntary€self-disclosure€mayÐ |*Ì%) Ðbe€outweighed€by€aggravating€factorsð?ð€makes€the€benefits€of€voluntary€self-disclosure€almostÐ h+¸&* Ðspeculative€and€could€affect€decisions€to€disclose.€€That€commenter€stated€that€BISððs€proposalÐ T,¤'+ Ðð ðcontrasts€sharply€with€.€.€.€customs€law€administration.€[Where]€.€.€.definite€advantages€alwaysÐ @-(, Ðflow€from€disclosing€violations.€.€.€.ðð€€The€commenter€recommended€that€BIS€at€least€adopt€aÐ ° Ðposition€of€resolving€all€voluntary€self-disclosure€cases€with€a€warning€letter€unless€the€ð ðviolationÐ œì Ðinvolves€serious€anti-€boycott€concerns€„„€e.g.,€complying€with€boycott€requests€to€discriminateÐ ˆØ Ðon€the€basis€of€race,€religion,€sex,€or€national€origin,€or€where€there€are€significant€aggravatingÐ tÄ Ðfactors.ðð€Ð `° ÐÌ€€€€€BIS€notes€that€as€stated€in€€ðð€764.8,€the€weight€to€be€given€to€any€factor€is€solely€within€theÐ 8 ˆ Ðdiscretion€of€BIS.€€Supplement€No.€2€to€part€764€describes€how€BIS€exercises€that€discretion.Ð $ t ÐBISððs€statement€in€the€supplement€that€voluntary€self-disclosure€made€in€accordance€with€€ððÐ  ` Ð764.8€be€given€great€weight€and€that€factors€of€great€weight€ordinarily€should€be€givenÐ ü L  Ðconsiderably€more€weight€than€other€factors€reflects€the€policy€that€BIS€has€followed€and€intendsÐ è 8  Ðto€follow€in€settling€administrative€enforcement€actions€involving€the€antiboycott€provisions.Ð Ô$  ÐHowever,€given€the€myriad€possible€combinations€of€facts€that€may€be€present€in€any€given€case,Ð À  Ðincluding€a€range€of€possible€aggravating€and€mitigating€factors,€BIS€believes€that€it€cannotÐ ¬ü  Ðdetermine€in€advance€the€maximum€sanction€that€would€be€appropriate€for€a€particular€violationÐ ˜è  Ðor€combination€of€violations.€€Moreover,€attempting€to€do€so€could€create€incentives€to€violateÐ „Ô  Ðthe€antiboycott€provisions€in€cases€where€the€potential€economic€benefit€to€the€violator€is€largeÐ pÀ Ðrelative€to€the€maximum€monetary€penalty.€€Such€incentives€could€occur,€for€example,€in€aÐ \¬ Ðsituation€in€which€a€single€violation€provides€the€violator€with€access€to€a€very€large€market.Ð H˜ ÐÌò òChanges€to€the€EAR€in€This€Ruleó óÐ  p ÐÌ€€€€€This€rule€creates€a€new€€ðð€764.8€setting€forth€the€procedures€for€voluntary€self-disclosure€ofÐ øH Ðviolations€of€the€antiboycott€provisions.€€It€also€creates€a€new€supplement€No.€2€to€part€764€thatÐ ä4 Ðdescribes€how€BIS€responds€to€violations€of€the€antiboycott€provisions€and€how€BIS€makesÐ Ð  Ðpenalty€determinations€in€the€settlement€of€antiboycott€administrative€enforcement€cases.€€TheÐ ¼  Ðrule€also€makes€technical€and€conforming€changes€to€part€766.Ð ¨ø ÐÌ€€€€€This€rule€provides€specific€criteria€with€respect€to€what€constitutes€a€voluntary€self-disclosureÐ €Ð Ðand€how€voluntary€self-€disclosures€relate€to€other€sources€of€information€that€OAC€may€haveÐ l¼ Ðconcerning€violations€of€the€antiboycott€provisions.€€The€rule€also€informs€the€public€of€theÐ X ¨ Ðfactors€that€BIS€usually€considers€to€be€important€when€settling€antiboycott€administrativeÐ D!” Ðenforcement€cases.€€BIS€believes€that€publishing€this€information€in€the€EAR€will€tend€to€placeÐ 0"€  Ðall€potential€respondents€on€a€more€equal€footing€because€procedures€for€making€voluntaryÐ #l! Ðself-disclosures,€information€about€how€BIS€responds€to€violations€and€how€BIS€makes€penaltyÐ $X" Ðdeterminations€in€the€settlement€of€antiboycott€administrative€enforcement€cases€will€all€beÐ ô$D # Ðmatters€of€public€record.€€BIS€also€believes€such€publication€will€make€settlement€of€antiboycottÐ à%0!$ Ðadministrative€cases€more€efficient,€as€respondents€and€BIS€will€be€able€to€focus€on€the€importantÐ Ì&"% Ðfactors€in€antiboycott€administrative€enforcement€cases€and€OAC€generally€expends€fewerÐ ¸'#& Ðresources€to€obtain€information€received€through€voluntary€self-disclosure€than€informationÐ ¤(ô#' Ðobtained€by€other€means.Ð )à$( ÐÌ€€€€€This€rule€also€revises€Supp.€No.€1€to€part€730€of€the€EAR€to€display€the€OMB€control€numberÐ h+¸&* Ðof€the€newly€approved€collection€of€information€that€relates€to€€ðð€764.8€of€the€EAR,€which€€isÐ T,¤'+ Ðcreated€by€this€rule.Ð @-(, ЇòòCreation€of€€ðð€764.8€„„€Voluntary€Self-Disclosure€of€Boycott€ViolationsóóÐ ° ÐÌ€€€€€The€new€€ðð€764.8€both€defines€what€constitutes€a€voluntary€self-disclosure€and€provides€theÐ ˆØ Ðprocedures€for€making€such€disclosures.€€Compliance€with€the€provisions€of€€ðð€764.8€is€importantÐ tÄ Ðbecause€a€voluntary€self-disclosure€ð ðsatisfying€the€requirements€of€€ðð€764.8ðð€is€designated€as€aÐ `° Ðmitigating€factor€of€ð ðGREAT€WEIGHTðð€in€the€settlement€of€administrative€cases€as€set€forth€inÐ L œ Ðthe€new€Supplement€No.€2€to€part€764.€€Supplement€No.€2€provides€that€such€factors€ð ðwillÐ 8 ˆ Ðordinarily€be€given€considerably€more€weight€than€a€factor€that€is€not€so€designated.ðð€€In€additionÐ $ t Ðto€providing€such€an€incentive€for€the€submission€of€voluntary€self-disclosures,€BIS€anticipatesÐ  ` Ðthat€€ðð€764.8€will€promote€more€effective€use€of€OAC€resources,€as€the€receipt€of€voluntaryÐ ü L  Ðself-disclosures€will€reduce€the€time€that€OAC€must€spend€identifying€and€investigating€possibleÐ è 8  Ðviolations.€€The€rule€provides€the€benefit€of€a€mitigating€factor€to€those€who€self-disclose€beforeÐ Ô$  ÐOAC€has€invested€resources€to€investigate€violations€based€on€information€it€might€receive€fromÐ À  Ðanother€source.Ð ¬ü  ÐÌ€€€€€Section€764.8€requires,€among€other€things,€that€voluntary€self-disclosures€be€in€writing€andÐ „Ô  Ðthat€they€be€received€by€OAC€before€OAC€learns€of€the€same€or€substantially€similar€informationÐ pÀ Ðfrom€ð ðanother€sourceðð€and€has€commenced€an€investigation€or€inquiry€in€connection€with€thatÐ \¬ Ðinformation.€Section€764.8€provides€that€a€person€may€make€an€initial€written€notificationÐ H˜ Ðfollowed€by€submission€of€a€more€detailed€narrative€account€and€supporting€documents.€€ForÐ 4„ Ðpurposes€of€determining€whether€a€voluntary€self-disclosure€was€received€before€OAC€learned€ofÐ  p Ðthe€same€or€substantially€similar€information€from€another€source,€the€date€of€the€voluntaryÐ  \ Ðself-disclosure€will€be€deemed€to€be€the€date€that€OAC€received€the€initial€notification€if€theÐ øH Ðperson€making€the€disclosure€subsequently€submits€the€required€narrative€account€and€supportingÐ ä4 Ðdocumentation.Ð Ð  ÐÌ€€€€€BIS€recognizes€that€two€features€of€its€existing€regulations€and€practices€may€impact€theÐ ¨ø Ðrequirement€that€a€voluntary€self-€disclosure€be€received€before€OAC€learns€of€the€same€orÐ ”ä Ðsubstantially€similar€information€from€another€source.€€The€first€such€feature€is€the€set€ofÐ €Ð Ðreporting€requirements€in€€ðð€760.5.€The€second€such€feature€is€OACð$ðs€practice€of€encouragingÐ l¼ Ðpersons€with€questions€about€the€EAR€to€contact€OAC€by€telephone€or€e-€mail€for€advice.Ð X ¨ ÐÌ€€€€€Section€760.5€of€the€EAR€requires€any€ð ðU.S.€person€who€receives€a€request€to€take€any€actionÐ 0"€  Ðthat€would€have€the€effect€of€furthering€or€supporting€a€restrictive€trade€practice€or€boycottÐ #l! Ðfostered€or€imposed€by€a€foreign€country€against€a€country€friendly€to€the€United€States€or€againstÐ $X" Ðany€United€States€personðð€to€report€to€OAC€both€receipt€of€the€request€and€the€action€that€theÐ ô$D # Ðperson€took€in€response€to€that€request.€€In€some€instances,€taking€the€requested€action€would€beÐ à%0!$ Ða€violation€of€€ðð€760.2.€€BIS€recognizes€that,€in€such€instances,€the€reporting€requirements€of€€ððÐ Ì&"% Ð760.5€would€have€the€effect€of€requiring€a€person€to€disclose€a€violation€that€it€had€committed.Ð ¸'#& ÐSection€764.8(b)(3)(I)€provides€that€reports€filed€pursuant€to€€ðð€760.2€constitute€ð ðinformationÐ ¤(ô#' Ðreceived€from€another€source.ðð€Thus,€a€person€who€wishes€to€make€a€voluntary€self-disclosure€ofÐ )à$( Ða€violation€that€is€based€on€an€action€that€€ðð€760.5€requires€that€person€to€report€would€have€toÐ |*Ì%) Ðmake€sure€that€OAC€receives€the€written€initial€notification€portion€of€the€voluntary€self-Ð h+¸&* Ðdisclosure€before€OAC€began€an€investigation€or€inquiry€based€on€the€information€received€in€theÐ T,¤'+ Ðrequired€report.€€The€report€itself€would€not€serve€as€the€initial€notification.€However,€if€OACÐ @-(, Ðreceived€the€report€and€the€initial€notification€simultaneously,€it€would€be€deemed€to€haveÐ ° Ðreceived€the€initial€notification€before€it€had€begun€an€investigation€or€inquiry€based€on€theÐ œì Ðreport.€€That€person€would€then€have€to€comply€with€the€remaining€requirements€of€€ðð€764.8,€butÐ ˆØ Ðonce€that€person€complied€with€those€requirements,€the€voluntary€self-disclosure€would€beÐ tÄ Ðtreated€as€having€been€received€at€the€time€that€the€initial€notification€was€received.Ð `° ÐÌ€€€€€OAC€has,€for€a€number€of€years,€provided€advice€about€the€antiboycott€provisions€to€personsÐ 8 ˆ Ðrequesting€such€advice€via€telephone€or€e-mail.€€In€some€instances,€the€persons€requesting€suchÐ $ t Ðadvice€may€disclose€that€they€have€committed€a€violation.€OACððs€practice€has€been€to€encourageÐ  ` Ðsuch€persons€to€make€voluntary€self-disclosures.€€OAC€wants€to€continue€to€encourage€personsÐ ü L  Ðwith€questions€about€the€antiboycott€provisions€to€disclose€fully€all€relevant€facts€when€makingÐ è 8  Ðtelephone€or€e-mail€inquiries€for€advice€concerning€the€antiboycott€provisions.€Therefore,€€ððÐ Ô$  Ð764.8(b)(3)(ii)€provides€that€violations€revealed€in€telephone€or€e-mail€requests€for€adviceÐ À  Ðconcerning€the€antiboycott€provisions€are€not€information€received€from€another€source€forÐ ¬ü  Ðpurposes€of€€ðð€764.8.€€Section€764.8(b)(3)(ii)€also€states€that€the€information€provided€over€theÐ ˜è  Ðtelephone€or€via€e-€mail€while€seeking€advice€would€not€constitute€a€voluntary€self-€disclosure€orÐ „Ô  Ðeven€an€initial€notification€of€a€voluntary€self-€disclosure.€€OACð$ðs€practice€is€to€inform€personsÐ pÀ Ðwho€reveal€violations€in€the€course€of€seeking€such€advice€of€their€opportunity€to€make€aÐ \¬ Ðvoluntary€self-disclosure.Ð H˜ ÐÌ€€€€€Section€764.8€also€provides€that€for€a€firm€to€be€deemed€to€have€made€a€voluntaryÐ  p Ðself-disclosure€under€that€section,€the€individual€making€the€disclosure€must€do€so€with€the€ð ðfullÐ  \ Ðknowledge€and€authorization€of€the€firmð$ðs€senior€management€or€of€an€officer€or€employee€whoÐ øH Ðis€authorized€to€make€such€disclosures€on€behalf€of€the€firm.ðð€€BIS€believes€that€approval€of€aÐ ä4 Ðperson€with€such€authority€is€needed€to€make€clear€that€a€firm€may€not€claim€the€benefits€of€aÐ Ð  Ðvoluntary€self-disclosure€when€a€subordinate€employee€acting€on€his€or€her€own€initiative€hasÐ ¼  Ðdisclosed€wrongdoing.€€The€proposed€rule€did€not€include€the€phrase€ð ðor€of€an€officer€orÐ ¨ø Ðemployee€who€is€authorized€to€make€such€disclosures€on€behalf€of€the€firm.ðð€Upon€review,€BISÐ ”ä Ðdoes€not€believe€that€knowledge€and€approval€of€ð ðsenior€managementðð€are€needed€so€long€asÐ €Ð Ðsomeone€with€authority€to€make€such€disclosures€on€behalf€of€the€firm€has€approved€theÐ l¼ Ðdisclosure€on€behalf€of€the€firm.Ð X ¨ ÐÌòòCreation€of€Supplement€No.€2€to€Part€766óóÐ 0"€  ÐÌ€€€€€This€rule€creates€a€new€supplement€to€part€766€of€the€EAR€to€set€forth€publicly€BISð$ðsÐ $X" Ðpractice€with€respect€to€violations€of€the€antiboycott€provisions.€€The€supplement€describes€theÐ ô$D # Ðways€that€BIS€responds€to€violations,€the€types€of€administrative€sanctions€that€may€be€imposedÐ à%0!$ Ðfor€violations,€the€factors€that€BIS€considers€in€determining€what€sanctions€are€appropriate,€theÐ Ì&"% Ðfactors€that€BIS€considers€in€determining€the€appropriate€scope€of€the€denial€or€exclusion€orderÐ ¸'#& Ðsanctions,€and€the€factors€BIS€considers€when€deciding€whether€to€suspend€a€sanction.Ð ¤(ô#' ÐÌ€€€€€Paragraph€(a)€of€the€supplement€contains€introductory€material€that€defines€the€scope€andÐ |*Ì%) Ðlimitations€of€the€supplement€as€well€as€sets€forth€BISð$ðs€policy€of€encouraging€any€party€inÐ h+¸&* Ðsettlement€negotiations€with€BIS€to€provide€all€information€that€the€party€believes€is€relevant€toÐ T,¤'+ Ðthe€application€of€the€guidance€in€the€supplement€as€well€as€information€that€is€relevant€toÐ @-(, Ðdetermining€whether€a€violation€has,€in€fact,€occurred€and€whether€the€party€has€a€defense€to€anyÐ ° Ðpotential€charges.Ð œì ÐÌ€€€€€Paragraph€(b)€of€the€supplement€sets€forth€the€three€actions€that€BIS€may€take€in€response€to€aÐ tÄ Ðviolation,€namely,€issuing€a€warning€letter,€pursuing€an€administrative€case,€and€referring€a€caseÐ `° Ðto€the€Department€of€Justice€for€criminal€prosecution.€€This€paragraph€also€lists€the€factors€thatÐ L œ Ðoften€cause€BIS€to€issue€a€warning€letter.€€Additionally,€it€notes€BISð$ðs€ability€to€issue€proposedÐ 8 ˆ Ðadministrative€charging€letters€rather€than€actual€administrative€charging€letters.€€ProposedÐ $ t Ðcharging€letters€are€issued€informally€to€provide€an€opportunity€for€settlement€before€initiation€ofÐ  ` Ða€formal€administrative€proceeding.€€As€noted€in€paragraph€(b),€BIS€is€not€required€to€issue€aÐ ü L  Ðproposed€charging€letter.€Finally,€paragraph€(b)€notes€that€BIS€may€refer€a€case€to€the€DepartmentÐ è 8  Ðof€Justice€for€criminal€prosecution€in€addition€to€pursuing€an€administrative€enforcement€action.Ð Ô$  ÐÌ€€€€€Paragraph€(c)€of€the€supplement€lists€the€types€of€administrative€sanctions€that€may€beÐ ¬ü  Ðimposed€in€antiboycott€administrative€enforcement€cases.€€Those€sanctions€are:€€A€monetaryÐ ˜è  Ðpenalty,€a€denial€of€export€privileges€and€an€order€excluding€the€party€from€practice€before€BIS.Ð „Ô  ÐÌ€€€€€Paragraph€(d)€provides€information€about€how€BIS€determines€what€sanctions€are€appropriateÐ \¬ Ðin€settlement€of€antiboycott€administrative€enforcement€cases.€€The€paragraph€describes€theÐ H˜ Ðgeneral€factors€that€BIS€believes€are€important€in€cases€concerning€violations€of€the€antiboycottÐ 4„ Ðprovisions.€€The€paragraph€then€describes€specific€mitigating€and€aggravating€factors.€€BISÐ  p Ðtypically€looks€to€the€presence€or€absence€of€the€specific€factors,€alongside€the€general€factors,€inÐ  \ Ðdetermining€what€sanctions€should€apply€in€a€given€settlement.Ð øH ÐÌ€€€€€Paragraph€(d)€begins€by€listing€seven€general€factors€to€which€BIS€looks€in€determining€whatÐ Ð  Ðadministrative€sanctions€are€appropriate€in€each€settlement.€€Those€seven€general€factors€are:Ð ¼  ÐDegree€of€seriousness,€category€of€violation,€whether€multiple€violations€arise€from€relatedÐ ¨ø Ðtransactions,€whether€multiple€violations€arise€from€unrelated€transactions,€the€timing€of€aÐ ”ä Ðsettlement,€whether€there€are€related€civil€or€criminal€violations,€and€the€partyð$ðs€familiarity€withÐ €Ð Ðthe€antiboycott€provisions.€€The€supplement€provides€general€guidance€on€how€BIS€applies€eachÐ l¼ Ðof€these€seven€general€factors.Ð X ¨ ÐÌ€€€€€Paragraph€(d)€then€addresses€the€role€of€eight€specific€mitigating€and€nine€specific€aggravatingÐ 0"€  Ðfactors€whose€presence€or€absence€BIS€generally€considers€when€determining€what€sanctionsÐ #l! Ðshould€apply.€€The€listed€factors€are€not€exhaustive€and€BIS€may€consider€other€factors€as€well€inÐ $X" Ða€particular€case.€However,€the€listed€factors€are€those€that€BISððs€experience€indicates€areÐ ô$D # Ðcommonly€relevant€to€penalty€determinations€in€cases€that€are€settled.€€Factors€identified€by€theÐ à%0!$ Ðterm€ð ðGREAT€WEIGHTðð€will€ordinarily€be€given€considerably€more€weight€than€other€factors.Ð Ì&"% ÐÌ€€€€€The€eight€specific€mitigating€factors€in€paragraph€(d)€are:€Voluntary€self-disclosure,€effectiveÐ ¤(ô#' Ðcompliance€program,€limited€business€with€or€in€boycotted€or€boycotting€countries,€history€ofÐ )à$( Ðcompliance€with€the€antiboycott€provisions,€exceptional€cooperation€with€the€investigation,€(lackÐ |*Ì%) Ðof)€clarity€of€request€to€furnish€prohibited€information€or€take€prohibited€action,€violationsÐ h+¸&* Ðarising€out€of€a€partyððs€ð ðpassiveðð€refusal€to€do€business€in€connection€with€an€agreement,€andÐ T,¤'+ Ðisolated€occurrence.€€The€proposed€rule€contained€a€statement€in€paragraph€(d)(2)(i)(B)(òò2óó),€to€theÐ @-(, Ðeffect€that€deliberate€or€intentional€destruction€of€records€may€be€an€issue€in€settlement.€Ð ° ÐParagraph€(d)(2)(i)(B)(òò2óó)€is€part€of€a€discussion€of€mitigating€factors€of€great€weight.€€UponÐ œì Ðreview€BIS€removed€the€sentence€about€intentional€or€deliberate€destruction€of€records€because€itÐ ˆØ Ðpertains€to€aggravating€factors€and€would€be€subsumed€in€the€serious€disregard€for€complianceÐ tÄ Ðissues€provision€in€paragraph€(d)(2)(ii)(B).Ð `° ÐÌ€€€€€The€nine€specific€aggravating€factors€in€paragraph€(d)€are:€Concealment€or€obstruction,Ð 8 ˆ Ðserious€disregard€for€compliance€responsibilities,€history€of€(lack€of)€compliance€with€theÐ $ t Ðantiboycott€provisions,€familiarity€with€the€type€of€transaction€at€issue€in€the€violation,€priorÐ  ` Ðhistory€of€business€with€or€in€boycotted€countries€or€boycotting€countries,€long€duration€or€highÐ ü L  Ðfrequency€of€violations,€clarity€of€request€to€furnish€prohibited€information€or€take€prohibitedÐ è 8  Ðaction,€violation€relating€to€information€concerning€a€specific€individual€or€entity,€and€violationsÐ Ô$  Ðrelating€to€ð ðactiveðð€conduct€concerning€an€agreement€to€refuse€to€do€business.€Ð À  ÐÌ€€€€€The€specific€mitigating€and€aggravating€factors€are€set€forth€in€more€detail€in€the€supplement.€Ð ˜è  ÐBIS€believes€that€in€most€cases€evaluating€these€factors€provides€a€fair€basis€for€determining€theÐ „Ô  Ðpenalty€that€is€appropriate€when€settling€an€antiboycott€administrative€enforcement€case.€Ð pÀ ÐHowever,€these€mitigating€and€aggravating€factors€are€not€exclusive.€€BIS€may€consider€otherÐ \¬ Ðfactors€that€are€relevant€in€a€particular€case€and€respondents€in€settlement€negotiations€mayÐ H˜ Ðsubmit€other€relevant€factors€for€BISð$ðs€consideration.Ð 4„ ÐÌ€€€€€Paragraph€(e)€sets€forth€the€factors€that€BIS€considers€to€be€particularly€relevant€whenÐ  \ Ðdeciding€whether€to€impose€a€denial€or€exclusion€order€in€the€settlement€of€antiboycottÐ øH Ðadministrative€enforcement€cases.€€Certain€factors€in€paragraph€(d)€„„€the€four€factors€that€areÐ ä4 Ðgiven€great€weight,€degree€of€seriousness,€and€history€of€prior€violations€and€their€seriousness€„„Ð Ð  Ðare€included€in€paragraph€(e).€€In€addition,€BIS€considers€the€extent€to€which€a€firmððs€seniorÐ ¼  Ðmanagement€participated€in€or€was€aware€of€the€conduct€that€gave€rise€to€the€violation,€theÐ ¨ø Ðlikelihood€of€future€violations,€and€whether€a€monetary€penalty€could€be€expected€to€have€aÐ ”ä Ðsufficient€deterrent€effect€to€be€particularly€relevant€in€determining€whether€a€monetary€penalty€isÐ €Ð Ðappropriate.Ð l¼ ÐÌ€€€€€Paragraph€(f)€provides€examples€of€factors€that€BIS€may€consider€in€deciding€whether€toÐ D!” Ðsuspend€or€defer€a€monetary€penalty€or€suspend€an€order€denying€export€privileges€or€an€orderÐ 0"€  Ðproviding€for€exclusion€from€practice.€€With€respect€to€suspension€or€deferral€of€monetaryÐ #l! Ðpenalties,€BIS€may€consider€whether€the€party€has€demonstrated€a€limited€ability€to€pay€a€penaltyÐ $X" Ðthat€would€be€appropriate€for€such€violation€so€that€suspended€or€deferred€payment€can€beÐ ô$D # Ðexpected€to€have€sufficient€deterrent€value,€and€whether€the€impact€of€the€penalty€would€beÐ à%0!$ Ðconsistent€with€the€impact€of€penalties€on€other€parties€who€commit€similar€violations.€€WhenÐ Ì&"% Ðdeciding€whether€to€suspend€denial€or€exclusion€orders,€BIS€may€consider€the€adverse€economicÐ ¸'#& Ðconsequences€of€the€order€on€the€party,€its€employees,€and€other€persons,€as€well€as€on€theÐ ¤(ô#' Ðnational€interest€in€the€competitiveness€of€U.S.€businesses.€€However,€such€orders€will€beÐ )à$( Ðsuspended€for€adverse€economic€consequences€only€if€future€violations€are€unlikely€and€if€thereÐ |*Ì%) Ðare€adequate€measures€(usually€a€substantial€civil€penalty)€to€achieve€the€necessary€deterrentÐ h+¸&* Ðeffect.Ð T,¤'+ ÐÐ @-(, Їò òRulemaking€Requirementsó óÐ ° ÐÌ1.€€€This€rule€has€been€determined€to€be€not€significant€for€purposes€of€Executive€Order€12866.Ð ˆØ ÐÌ2.€€€Notwithstanding€any€other€provision€of€law,€no€person€is€required€to€respond€to,€nor€shall€anyÐ `° Ðperson€be€subject€to€a€penalty€for€failure€to€comply€with€a€collection€of€information,€subject€toÐ L œ Ðthe€requirements€of€the€Paperwork€Reduction€Act,€unless€that€collection€of€information€displaysÐ 8 ˆ Ða€currently€valid€Office€of€Management€and€Budget€Control€Number.€€This€rule€contains€a€newÐ $ t Ðcollection€of€information€subject€to€the€Paperwork€Reduction€Act€of€1980€(44€U.S.C.€3501€etÐ  ` Ðseq.)€that€has€been€approved€by€the€€Office€of€Management€and€Budget€under€control€numberÐ ü L  Ð0694-0132€€which€carries€a€burden€hour€estimate€of€1,280€and€a€cost€estimate€of€$51,200.Ð è 8  ÐÌ€€€€€Send€comments€about€this€collection,€including€suggestions€for€reducing€the€burden,€to€DavidÐ À  ÐRostker,€Office€of€Management€and€Budget,€by€e-mail€to€David_Rostker@omb.eop.gov,€or€byÐ ¬ü  Ðfax€to€(202)€395-7285;€and€to€the€Office€of€Administration,€Bureau€of€Industry€and€Security,Ð ˜è  ÐDepartment€of€Commerce,€14th€and€Pennsylvania€Avenue,€NW.,€Room€6883,€Washington,€DCÐ „Ô  Ð20230.Ð pÀ ÐÌ3.€€€This€rule€does€not€contain€policies€with€Federalism€implications€as€that€term€is€defined€inÐ H˜ ÐExecutive€Order€13132.Ð 4„ ÐÌ4.€€€The€Chief€Counsel€for€Regulation€at€the€Department€of€Commerce€certified€to€the€ChiefÐ  \ ÐCounsel€for€Advocacy€at€the€Small€Business€Administration€that€this€rule,€if€adopted,€would€notÐ øH Ðhave€a€significant€economic€impact€on€€a€substantial€number€of€small€entities.€The€factual€basisÐ ä4 Ðwas€published€in€the€proposed€rule€and€is€not€repeated€here.€€BIS€received€only€one€comment€thatÐ Ð  Ðaddressed€the€economic€impact€of€this€rule.€€That€comment€addressed€the€ruleððs€economic€impactÐ ¼  Ðon€large€businesses€with€multiple€operating€units€in€many€countries€and€did€not€address€the€ruleððsÐ ¨ø Ðimpact€on€small€entities.€€BIS€has€included€that€comment€in€its€Paperwork€Reduction€ActÐ ”ä Ðsubmission€to€OMB€and€addressed€it€under€the€heading€ð ðComment€on€Paperwork€Burdenðð€earlierÐ €Ð Ðin€this€preamble.€€Therefore,€BIS€has€not€prepared€a€final€regulatory€flexibility€analysis€for€thisÐ l¼ Ðrule.Ð X ¨ ÐÌò òList€of€Subjectsó óÐ 0"€  ÐÌòò15€CFR€Part€730óóÐ $X" ÐÌAdministrative€practice€and€procedure,€Advisory€committees,€Exports,€Reporting€andÐ à%0!$ Ðrecordkeeping€requirements,€Strategic€and€critical€materials.Ð Ì&"% ÐÌòò15€CFR€Part€764óóÐ ¤(ô#' ÐÌAdministrative€practice€and€procedure,€Exports,€Law€enforcement,€PenaltiesÐ |*Ì%) ÐÌòò15€CFR€Part€766óóÐ T,¤'+ ÐÐ @-(, ÐAdministrative€practice€and€procedure,€Confidential€business€information,€Exports,€LawÐ ° Ðenforcement,€PenaltiesÐ œì ÐÌFor€the€reasons€set€forth€above,€the€Export€Administration€Regulations€(15€CFR€730€ð!ð€774)€areÐ tÄ Ðamended€as€follows:Ð `° ÐÌò òPART€730ð!ð[AMENDED]ó óÐ 8 ˆ ÐÌ€€€€€1.€€The€authority€citation€for€part€730€continues€to€read€as€follows:Ð  ` ÐÌ€€€€€Authority:€50€U.S.C.€app.€2401€et€seq.;€50€U.S.C.€1701€et€seq.;€10€U.S.C.€7420;€10€U.S.C.Ð è 8  Ð7430(e);€22€U.S.C.€287c;€22€U.S.C.€2151€note,€Pub.€L.€108-175;€22€U.S.C.€3201€et€seq.;€22Ð Ô$  ÐU.S.C.€6004;€30€U.S.C.€185(s),€185(u);€42€U.S.C.€2139a;€42€U.S.C.€6212;€43€U.S.C.€1354;€46Ð À  ÐU.S.C.€app.€466c;€50€U.S.C.€app.€5;€Sec.€901-911,€Pub.€L.€106-387;€Sec.€221,€Pub.€L.€107-56;Ð ¬ü  ÐE.O.€11912,€41€FR€15825,€3€CFR,€1976€Comp.,€p.€114;€E.O.€12002,€42€FR€35623,€3€CFR,€1977Ð ˜è  ÐComp.,€p.133;€E.O.€12058,€43€FR€20947,€3€CFR,€1978€Comp.,€p.€179;€E.O.€12214,€45€FR€29783,Ð „Ô  Ð3€CFR,€1980€Comp.,€p.€256;€E.O.€12851,€58€FR€33181,€3€CFR,€1993€Comp.,€p.€608;€E.O.€12854,Ð pÀ Ð58€FR€36587,€3€CFR,€1993€Comp.,€p.€179;€E.O.€12918,€59€FR€28205,€3€CFR,€1994€Comp.,€p.Ð \¬ Ð899;€E.O.€12938,€59€FR€59099,€3€CFR,€1994€Comp.,€p.€950;€E.O.€12947,€60€FR€5079,€3€CFR,Ð H˜ Ð1995€Comp.,€p.€356;€E.O.€12981,€60€FR€62981,€3€CFR,€1995€Comp.,€p.€419;€E.O.€13020,€61€FRÐ 4„ Ð54079,€3€CFR,€1996€Comp.€p.€219;€E.O.€13026,€61€FR€58767,€3€CFR,€1996€Comp.,€p.€228;€E.O.Ð  p Ð13099,€63€FR€45167,€3€CFR,€1998€Comp.,€p.208;€E.O.€13222,€66€FR€44025,€3€CFR,€2001Ð  \ ÐComp.,€p.€783;€E.O.€13224,€66€FR€49079,€3€CFR,€2001€Comp.,€p.€786;€E.O.€13338,€69€FRÐ øH Ð26751,€May€13,€2004;€Notice€of€August€3,€2006,€71€FR€44551€(August€7,€2006);€Notice€ofÐ ä4 ÐOctober€27,€2006,€71€FR€64109€(October€31,€2006).Ð Ð  ÐÌ€€€€€2.€€€In€Supp.€No.€1€to€part€730,€add€a€new€row€to€the€table€of€approved€information€collectionsÐ ¨ø Ðimmediately€following€the€row€that€begins€with€ð ð0694-0129"€and€immediately€preceding€the€row€Ð ”ä Ðthat€begins€with€ð ð0607-0152ðð€to€read€as€follows:Ð €Ð Ѐ€€€€Ð l¼ Ðò òSupplement€No.€1€to€Part€730ð!ðInformation€Collection€Requirements€Under€the€PaperworkÐ X ¨ ÐReduction€Act:€€OMB€Control€Numbersó óÐ D!” ÐÌ*€€€*€€€*€€€*€€*Ð #l! ÐCollection€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Title€à0 À àà0À(#À(#àà0p(#(#àà0Èp(#p(#àReference€in€the€EARÐ$X"È(#È(# Ѐ€numberÐ ô$D # ÐÌ€€à0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#à€€€€*€€€*€€€*€€€*€€€*€€€€*€€€*ÐÌ&"%(#(# Ð0694-0132€€€€€€€€€€€€€€€€€€€€€€€€€€Voluntary€Self-Disclosure€of€à0 p àà0Èp(#p(#àà0 È(#È(#à€ðð764.8и'#& (# (# Ѐ€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Antiboycott€Violationsà p àà È àÐ ¤(ô#' Ðà  àà ` àà ¸ àà  à€€€€*€€*€€€€*€€€€*€€€*€€€*€€€*€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ð )à$( ÐÌÌò òPART€764ð!ð[AMENDED]ó óÐ T,¤'+ ÐÐ @-(, Ѐ€€€€3.€€The€authority€citation€for€part€764€continues€to€read€as€follows:Ð ° ÐÌ€€€€€Authority:€50€U.S.C.€app.€2401€et€seq.;€50€U.S.C.€1701€et€seq.;€E.O.€13222,€66€FR€44025,€€3Ð ˆØ ÐCFR,€2001€Comp.,€p.€783;€Notice€of€August€3,€2006,€71€FR€44551€(August€7,€2006).Ð tÄ ÐÌ€€€€€4.€€Add€a€new€€ðð€764.8€to€read€as€follows:Ð L œ ÐÌò ò€ðð€764.8€€€Voluntary€self-disclosures€for€boycott€violations.€ó óÐ $ t ÐÌThis€section€sets€forth€procedures€for€disclosing€violations€of€part€760€of€the€EAR€„„€RestrictiveÐ ü L  ÐTrade€Practices€or€Boycotts€and€violations€of€part€762€„„€Recordkeeping€„„€with€respect€to€recordsÐ è 8  Ðrelated€to€part€760.€€In€this€section,€these€provisions€are€referred€to€collectively€as€theÐ Ô$  Ðð ðantiboycott€provisions.ðð€€This€section€also€describes€BISððs€policy€regarding€such€disclosures.Ð À  ÐÌ(a)€€òòGeneral€policyóó.€€BIS€strongly€encourages€disclosure€to€the€Office€of€Antiboycott€ComplianceÐ ˜è  Ð(OAC)€if€you€believe€that€you€may€have€violated€the€antiboycott€provisions.€Voluntary€self€-Ð „Ô  Ðdisclosures€are€a€mitigating€factor€with€respect€to€any€enforcement€action€that€OAC€might€take.Ð pÀ ÐÌ(b)€€òòLimitationsóó.€€(1)€This€section€does€not€apply€to€disclosures€of€violations€relating€toÐ H˜ Ðprovisions€of€the€EAR€other€than€the€antiboycott€provisions.€€Section€764.5€of€this€part€describesÐ 4„ Ðhow€to€prepare€disclosures€of€violations€of€the€EAR€other€than€the€antiboycott€provisions.Ð  p ÐÌ(2)€€The€provisions€of€this€section€apply€only€when€information€is€provided€to€OAC€for€its€reviewÐ øH Ðin€determining€whether€to€take€administrative€action€under€parts€764€and€766€of€the€EAR€forÐ ä4 Ðviolations€of€the€antiboycott€provisions.Ð Ð  ÐÌ(3)€òòTimingóó.€€The€provisions€of€this€section€apply€only€if€OAC€receives€the€voluntaryÐ ¨ø Ðself-disclosure€as€described€in€paragraph€(c)(2)€of€this€section€before€it€commences€anÐ ”ä Ðinvestigation€or€inquiry€in€connection€with€the€same€or€substantially€similar€information€itÐ €Ð Ðreceived€from€another€source.Ð l¼ ÐÌ(i)€òòMandatory€Reportsóó.€€For€purposes€of€this€section,€OACððs€receipt€of€a€report€required€to€beÐ D!” Ðfiled€under€€ðð€760.5€of€the€EAR€that€discloses€that€a€person€took€an€action€prohibited€by€part€760Ð 0"€  Ðof€the€EAR€constitutes€the€receipt€of€information€from€another€source.Ð #l! ÐÌ(ii)€òòRequests€for€Adviceóó.€€For€purposes€of€this€section,€a€violation€that€is€revealed€to€OAC€by€aÐ ô$D # Ðperson€who€is€seeking€advice,€either€by€telephone€or€e-mail,€about€the€antiboycott€provisionsÐ à%0!$ Ðdoes€not€constitute€the€receipt€of€information€from€another€source.€€Such€revelation€also€does€notÐ Ì&"% Ðconstitute€a€voluntary€self-disclosure€or€initial€notification€of€a€voluntary€self-disclosure€forÐ ¸'#& Ðpurposes€of€this€section.Ð ¤(ô#' ÐÌ(4)€Although€a€voluntary€self-disclosure€is€a€mitigating€factor€in€determining€what€administrativeÐ |*Ì%) Ðsanctions,€if€any,€will€be€sought€by€BIS,€it€is€a€factor€that€is€considered€together€with€all€otherÐ h+¸&* Ðfactors€in€a€case.€€The€weight€given€to€voluntary€self-€disclosure€is€solely€within€the€discretion€ofÐ T,¤'+ ÐBIS,€and€the€mitigating€effect€of€voluntary€self-disclosure€may€be€outweighed€by€aggravatingÐ @-(, Ðfactors.€€Voluntary€self-disclosure€does€not€prevent€transactions€from€being€referred€to€theÐ ° ÐDepartment€of€Justice€for€criminal€prosecution.€€In€such€a€case,€BIS€would€notify€the€DepartmentÐ œì Ðof€Justice€of€the€voluntary€self-€disclosure,€but€the€decision€as€to€how€to€consider€that€factor€isÐ ˆØ Ðwithin€the€discretion€of€the€Department€of€Justice.Ð tÄ ÐÌ(5)€€A€firm€will€not€be€deemed€to€have€made€a€disclosure€under€this€section€unless€the€individualÐ L œ Ðmaking€the€disclosure€did€so€with€the€full€knowledge€and€authorization€of€the€firmððs€seniorÐ 8 ˆ Ðmanagement€or€of€a€person€with€authority€to€make€such€disclosures€on€behalf€of€the€firm.Ð $ t ÐÌ(6)€€The€provisions€of€this€section€do€not,€nor€should€they€be€relied€on€to,€create,€confer,€or€grantÐ ü L  Ðany€rights,€benefits,€privileges,€or€protection€enforceable€at€law€or€in€equity€by€any€person,Ð è 8  Ðbusiness,€or€entity€in€any€civil,€criminal,€administrative,€or€other€matter.Ð Ô$  ÐÌ(c)€òòInformation€to€be€providedóó.€€(1)€€òòGeneralóó.€€Any€person€wanting€to€disclose€information€thatÐ ¬ü  Ðconstitutes€a€voluntary€self-€disclosure€should,€in€the€manner€outlined€below,€initially€notifyÐ ˜è  ÐOAC€as€soon€as€possible€after€violations€are€discovered,€and€then€conduct€a€thorough€review€ofÐ „Ô  Ðall€transactions€where€violations€of€the€antiboycott€provisions€are€suspected.Ð pÀ ÐÌ(2)€€òòInitial€notificationóó.€€The€initial€notification€must€be€in€writing€and€be€sent€to€the€address€in€€ððÐ H˜ Ð764.8(c)(7)€of€this€part.€The€notification€should€include€the€name€of€the€person€making€theÐ 4„ Ðdisclosure€and€a€brief€description€of€the€suspected€violations.€The€notification€should€describe€theÐ  p Ðgeneral€nature€and€extent€of€the€violations.€€If€the€person€making€the€disclosure€subsequentlyÐ  \ Ðcompletes€the€narrative€account€required€by€€ðð€764.8(c)(3)€of€this€part,€the€disclosure€will€beÐ øH Ðdeemed€to€have€been€made€on€the€date€of€the€initial€notification€for€purposes€of€€ðð€764.8(b)(3)€ofÐ ä4 Ðthis€part.Ð Ð  ÐÌ(3)€òòNarrative€accountóó.€€After€the€initial€notification,€a€thorough€review€should€be€conducted€ofÐ ¨ø Ðall€business€transactions€where€possible€antiboycott€provision€violations€are€suspected.€OACÐ ”ä Ðrecommends€that€the€review€cover€a€period€of€five€years€prior€to€the€date€of€the€initialÐ €Ð Ðnotification.€€If€your€review€goes€back€less€than€five€years,€you€risk€failing€to€discover€violationsÐ l¼ Ðthat€may€later€become€the€subject€of€an€investigation.€Any€violations€not€voluntarily€disclosed€doÐ X ¨ Ðnot€receive€the€same€mitigation€as€the€violations€voluntarily€self-disclosed€under€this€section.€Ð D!” ÐHowever,€the€failure€to€make€such€disclosures€will€not€be€treated€as€a€separate€violation€unlessÐ 0"€  Ðsome€other€section€of€the€EAR€or€other€provision€of€law€enforced€by€BIS€requires€disclosure.€Ð #l! ÐUpon€completion€of€the€review,€OAC€should€be€furnished€with€a€narrative€account€thatÐ $X" Ðsufficiently€describes€the€suspected€violations€so€that€their€nature€and€gravity€can€be€assessed.€Ð ô$D # ÐThe€narrative€account€should€also€describe€the€nature€of€the€review€conducted€and€measures€thatÐ à%0!$ Ðmay€have€been€taken€to€minimize€the€likelihood€that€violations€will€occur€in€the€future.€TheÐ Ì&"% Ðnarrative€account€should€include:Ð ¸'#& ÐÌ(i)€€The€kind€of€violation€involved,€for€example,€the€furnishing€of€a€certificate€indicating€that€theÐ )à$( Ðgoods€supplied€did€not€originate€in€a€boycotted€country;Ð |*Ì%) ÐÌ(ii)€€€An€explanation€of€when€and€how€the€violations€occurred,€including€a€description€ofÐ T,¤'+ Ðactivities€surrounding€the€violations€(e.g.,€contract€negotiations,€sale€of€goods,€implementation€ofÐ @-(, Ðletter€of€credit,€bid€solicitation);Ð ° ÐÌ(iii)€€The€complete€identities€and€addresses€of€all€individuals€and€organizations,€whether€foreignÐ ˆØ Ðor€domestic,€involved€in€the€activities€giving€rise€to€the€violations;€andÐ tÄ ÐÌ(iv)€€A€description€of€any€mitigating€factors.Ð L œ ÐÌ(4)€Supporting€documentation.Ð $ t ÐÌ(i)€€The€narrative€account€should€be€accompanied€by€copies€of€documents€that€explain€andÐ ü L  Ðsupport€it,€including:Ð è 8  ÐÌ(A)€Copies€of€boycott€certifications€and€declarations€relating€to€the€violation,€or€copies€ofÐ À  Ðdocuments€containing€prohibited€language€or€prohibited€requests€for€information;Ð ¬ü  ÐÌ(B)€Other€documents€relating€to€the€violation,€such€as€letters,€facsimiles,€telexes€and€otherÐ „Ô  Ðevidence€of€written€or€oral€communications,€negotiations,€internal€memoranda,€purchase€orders,Ð pÀ Ðinvoices,€bid€requests,€letters€of€credit€and€brochures;Ð \¬ ÐÌ(ii)€€Any€relevant€documents€not€attached€to€the€narrative€account€must€be€retained€by€the€personÐ 4„ Ðmaking€the€disclosure€until€the€latest€of€the€following:€€the€documents€are€supplied€to€OAC;€BISÐ  p Ðinforms€the€disclosing€party€that€it€will€take€no€action;€BIS€issues€a€warning€letter€for€theÐ  \ Ðviolation;€BIS€issues€an€order€that€constitutes€the€final€agency€action€in€the€matter€and€allÐ øH Ðavenues€for€appeal€are€exhausted;€or€the€documents€are€no€longer€required€to€be€kept€under€partÐ ä4 Ð762€of€the€EAR.Ð Ð  ÐÌ(5)€€òòCertificationóó.€€A€certification€must€be€submitted€stating€that€all€of€the€representations€madeÐ ¨ø Ðin€connection€with€the€voluntary€self-disclosure€are€true€and€correct€to€the€best€of€that€person'sÐ ”ä Ðknowledge€and€belief.€€Certifications€made€by€a€corporation€or€other€organization€should€beÐ €Ð Ðsigned€by€an€official€of€the€corporation€or€other€organization€with€the€authority€to€do€so.€€SectionÐ l¼ Ð764.2(g)€of€this€part€relating€to€false€or€misleading€representations€applies€in€connection€with€theÐ X ¨ Ðdisclosure€of€information€under€this€section.Ð D!” ÐÌ(6)€€òòOral€presentationsóó.€€OAC€believes€that€oral€presentations€are€generally€not€necessary€toÐ #l! Ðaugment€the€written€narrative€account€and€supporting€documentation.€€If€the€person€making€theÐ $X" Ðdisclosure€believes€otherwise,€a€request€for€a€meeting€should€be€included€with€the€disclosure.Ð ô$D # ÐÌ(7)€€òòWhere€to€make€voluntary€self-disclosuresóó.€€The€information€constituting€a€voluntaryÐ Ì&"% Ðself-disclosure€or€any€other€correspondence€pertaining€to€a€voluntary€self-disclosure€should€beÐ ¸'#& Ðsubmitted€to:€Office€of€Antiboycott€Compliance,€14th€and€Pennsylvania€Ave.,€NW.,€Room€6098,Ð ¤(ô#' ÐWashington,€DC€20230,€€tel:€(202)€482-2381,€facsimile:€(202)€482-0913.Ð )à$( ÐÌ(d)€€€òòAction€by€the€Office€of€Antiboycott€Complianceóó.€€After€OAC€has€been€provided€with€theÐ h+¸&* Ðrequired€narrative€and€supporting€documentation,€it€will€acknowledge€the€disclosure€by€letter,Ð T,¤'+ Ðprovide€the€person€making€the€disclosure€with€a€point€of€contact,€and€take€whatever€additionalÐ @-(, Ðaction,€including€further€investigation,€it€deems€appropriate.€€As€quickly€as€the€facts€andÐ ° Ðcircumstances€of€a€given€case€permit,€BIS€may€take€any€of€the€following€actions:Ð œì ÐÌ(1)€€Inform€the€person€making€the€disclosure€that,€based€on€the€facts€disclosed,€it€plans€to€take€noÐ tÄ Ðaction;Ð `° ÐÌ(2)€€Issue€a€warning€letter;Ð 8 ˆ ÐÌ(3)€€Issue€a€proposed€charging€letter€and€attempt€to€settle€the€matter€pursuant€to€€ðð€766.18€of€theÐ  ` ÐEAR;€Ð ü L  ÐÌ(4)€€Issue€a€charging€letter€pursuant€to€€ðð€766.3€of€the€EAR€if€a€settlement€is€not€reached€or€BISÐ Ô$  Ðotherwise€deems€appropriate;€and/orÐ À  ÐÌ(5)€€Refer€the€matter€to€the€Department€of€Justice€for€criminal€prosecution.Ð ˜è  ÐÌ(e)€€òòCriteriaóó.€€Supplement€No.€2€to€part€766€of€the€EAR€describes€how€BIS€typically€exercises€itsÐ pÀ Ðdiscretion€regarding€whether€to€pursue€an€antiboycott€administrative€enforcement€case€under€partÐ \¬ Ð766€and€what€administrative€sanctions€to€seek€in€settling€such€a€case.Ð H˜ ÐÌò òPART€766ð!ð[AMENDED]ó óÐ  p ÐÌ5.€€The€authority€citation€for€part€766€continues€to€read€as€follows:Ð øH ÐÌ€€€€€Authority:€€50€U.S.C.€app.€2401€et€seq.;€50€U.S.C.€1701€et€seq.;€€E.O.€13222,€66€FR€44025,€3Ð Ð  ÐCFR,€2001€Comp.,€p.€783;€Notice€of€August€3,€2006,€71€FR€44551€(August€7,€2006).Ð ¼  ÐÌ6.€€In€€ðð€766.3,€paragraph€(a)€the€second€sentence€is€revised€to€read€as€follows:Ð ”ä ÐÌò ò€ðð€766.3€Institution€of€administrative€enforcement€proceedings.ó óÐ l¼ ÐÌ€€€€€(a)€€Charging€letters.€*€€*€€*€€€Supplements€Nos.€1€and€2€to€this€part€describe€how€BIS€typicallyÐ D!” Ðexercises€its€discretion€regarding€the€issuance€of€charging€letters.€€€*€€€*€€€*Ð 0"€  Ð*€€€*€€€*€€€*€€€*Ð #l! ÐÌ€€€€€5.€€In€€ðð€766.18€paragraph€(f)€is€revised€to€read€as€follows:Ð ô$D # ÐÌò ò€ðð€766.18€Settlementó ó.Ð Ì&"% ÐÌ€€€€€€€€€€€€€€€€€€€€*€€€*€€€*€€€*€€€*Ð ¨(ø#' ÐÌ€€€€€(f)€Supplements€Nos.€1€and€2€to€this€part€describe€how€BIS€typically€exercises€its€discretionÐ €*Ð%) Ðregarding€the€terms€under€which€it€is€willing€to€settle€particular€cases.Ð l+¼&* ÐÌ€€€€€6.€€Add€Supplement€No.€2€to€part€766€to€read€as€follows:Ð D-”(, ЇÌò òSupplement€No.€2€to€Part€766€„„€Guidance€on€Charging€and€Penalty€Determinations€inÐ œì ÐSettlement€of€Administrative€Enforcement€Cases€Involving€Antiboycott€Mattersó óÐ ˆØ ÐÌ(a)€€€òòIntroductionóó.Ð `° ÐÌ€€€€€(1)€òòScopeóó.€€This€Supplement€describes€how€the€Office€of€Antiboycott€Compliance€(OAC)Ð 8 ˆ Ðresponds€to€violations€of€part€760€of€the€EAR€ð ðRestrictive€Trade€Practices€or€Boycottsðð€and€toÐ $ t Ðviolations€of€part€762€ð ðRecordkeepingðð€when€the€recordkeeping€requirement€pertains€to€part€760€Ð  ` Ð(together€referred€to€in€this€supplement€as€the€ð ðantiboycott€provisionsðð).€€It€also€describes€howÐ ü L  ÐBIS€makes€penalty€determinations€in€the€settlement€of€administrative€enforcement€cases€broughtÐ è 8  Ðunder€parts€764€and€766€of€the€EAR€involving€violations€of€the€antiboycott€provisions.€ThisÐ Ô$  Ðsupplement€does€not€apply€to€enforcement€cases€for€violations€of€other€provisions€of€the€EAR.Ð À  ÐÌ€€€€€(2)€òòPolicy€Regarding€Settlementóó.€€Because€many€administrative€enforcement€cases€areÐ ˜è  Ðresolved€through€settlement,€the€process€of€settling€such€cases€is€integral€to€the€enforcementÐ „Ô  Ðprogram.€€BIS€carefully€considers€each€settlement€offer€in€light€of€the€facts€and€circumstances€ofÐ pÀ Ðthe€case,€relevant€precedent,€and€BISððs€objective€to€achieve€in€each€case€an€appropriate€level€ofÐ \¬ Ðpenalty€and€deterrent€effect.€€In€settlement€negotiations,€BIS€encourages€parties€to€provide,€andÐ H˜ Ðwill€give€serious€consideration€to,€information€and€evidence€that€the€parties€believe€is€relevant€toÐ 4„ Ðthe€application€of€this€guidance€to€their€cases,€to€whether€a€violation€has€in€fact€occurred,€and€toÐ  p Ðwhether€they€have€a€defense€to€potential€charges.Ð  \ ÐÌ€€€€€(3)€òòLimitationóó.€€BISððs€policy€and€practice€is€to€treat€similarly€situated€cases€similarly,€takingÐ ä4 Ðinto€consideration€that€the€facts€and€combination€of€mitigating€and€aggravating€factors€areÐ Ð  Ðdifferent€in€each€case.€€However,€this€guidance€does€not€confer€any€right€or€impose€anyÐ ¼  Ðobligation€regarding€what€posture€or€penalties€BIS€may€seek€in€settling€or€litigating€a€case.€Ð ¨ø ÐParties€do€not€have€a€right€to€a€settlement€offer€or€particular€settlement€terms€from€BIS,Ð ”ä Ðregardless€of€settlement€postures€BIS€has€taken€in€other€cases.Ð €Ð ÐÌ(b)€òòResponding€to€Violationsóó.€OAC€within€BIS€investigates€possible€violations€of€Section€8€ofÐ X ¨ Ðthe€Export€Administration€Act€of€1979,€as€amended€(ð ðForeign€Boycottsðð),€the€antiboycottÐ D!” Ðprovisions€of€EAR,€or€any€order€or€authorization€related€thereto.€When€BIS€has€reason€to€believeÐ 0"€  Ðthat€such€a€violation€has€occurred,€BIS€may€issue€a€warning€letter€or€initiate€an€administrativeÐ #l! Ðenforcement€proceeding.€€A€violation€may€also€be€referred€to€the€Department€of€Justice€forÐ $X" Ðcriminal€prosecution.Ð ô$D # ÐÌ€€€€€(1)€€Issuing€a€warning€letter.€€Warning€letters€represent€BISððs€belief€that€a€violation€hasÐ Ì&"% Ðoccurred.€€In€the€exercise€of€its€discretion,€BIS€may€determine€in€certain€instances€that€issuing€aÐ ¸'#& Ðwarning€letter,€instead€of€bringing€an€administrative€enforcement€proceeding,€will€fulfill€theÐ ¤(ô#' Ðappropriate€enforcement€objective.€€A€warning€letter€will€fully€explain€the€violation.Ð )à$( ÐÌ€€€€€€€€€€(i)€BIS€may€issue€warning€letters€where:Ð h+¸&* ÐÌ€€€€€€€€€€€€€€€(A)€the€investigation€commenced€as€a€result€of€a€voluntary€self-disclosure€satisfying€theÐ @-(, Ðrequirements€of€€ðð€764.8€of€the€EAR;€orÐ ° ÐÌ€€€€€€€€€€€€€€€(B)€the€party€has€not€previously€committed€violations€of€the€antiboycott€provisions.Ð ˆØ ÐÌ€€€€€€€€€€(ii)€€€BIS€may€also€consider€the€category€of€violation€as€discussed€in€paragraph€(d)(2)€ofÐ `° Ðthis€supplement€in€determining€whether€to€issue€a€warning€letter€or€initiate€an€enforcementÐ L œ Ðproceeding.€€A€violation€covered€by€Category€C€(failure€to€report€or€late€reporting€of€receipt€ofÐ 8 ˆ Ðboycott€requests)€might€warrant€a€warning€letter€rather€than€initiation€of€an€enforcementÐ $ t Ðproceeding.Ð  ` ÐÌ€€€€€€€€€€(iii)€BIS€will€not€issue€a€warning€letter€if€it€concludes,€based€on€available€information,€thatÐ è 8  Ða€violation€did€not€occur.Ð Ô$  ÐÌ€€€€€€€€€€(iv)€BIS€may€reopen€its€investigation€of€a€matter€should€it€receive€additional€evidence€or€ifÐ ¬ü  Ðit€appears€that€information€previously€provided€to€BIS€during€the€course€of€its€investigation€wasÐ ˜è  Ðincorrect.Ð „Ô  ÐÌ€€€€€(2)€€òòPursuing€an€administrative€enforcement€caseóó.€€The€issuance€of€a€charging€letter€under€€ððÐ \¬ Ð766.3€of€this€part€initiates€an€administrative€proceeding.Ð H˜ ÐÌ€€€€€€€€€€€(i)€€Charging€letters€may€be€issued€when€there€is€reason€to€believe€that€a€violation€hasÐ  p Ðoccurred.€€Cases€may€be€settled€before€or€after€the€issuance€of€a€charging€letter.€€òòSeeóó€€ðð€766.18€ofÐ  \ Ðthis€part.à ` àà ¸ àà  àà h àÐ øH ÐÌ€€€€€€€€€€(ii)€Although€not€required€to€do€so€by€law,€BIS€may€send€a€proposed€charging€letter€to€aÐ Ð  Ðparty€to€inform€the€party€of€the€violations€that€BIS€has€reason€to€believe€occurred€and€how€BISÐ ¼  Ðexpects€that€those€violations€would€be€charged.€€Issuance€of€the€proposed€charging€letter€providesÐ ¨ø Ðan€opportunity€for€the€party€and€BIS€to€consider€settlement€of€the€case€prior€to€the€initiation€ofÐ ”ä Ðformal€enforcement€proceedings.Ð €Ð ÐÌ€€€€€(3)€€€òòReferring€for€criminal€prosecutionóó.€€In€appropriate€cases,€BIS€may€refer€a€case€to€theÐ X ¨ ÐDepartment€of€Justice€for€criminal€prosecution,€in€addition€to€pursuing€an€administrativeÐ D!” Ðenforcement€action.Ð 0"€  ÐÌ(c)€€òòTypes€of€administrative€sanctionsóó.€€Administrative€enforcement€cases€generally€are€settled€onÐ $X" Ðterms€that€include€one€or€more€of€three€administrative€sanctions:Ð ô$D # ÐÌ€€€€€(1)€A€monetary€penalty€may€be€assessed€for€each€violation€as€provided€in€€ðð€764.3(a)(1)€of€theÐ Ì&"% ÐEAR;Ð ¸'#& ÐÌ€€€€€Note€to€paragraph€(c)(1):€€The€maximum€penalty€is€subject€to€adjustments€under€the€FederalÐ )à$( ÐCivil€Penalties€Adjustment€Act€of€1990€(28€U.S.C.€2461,€note€(2000)),€which€are€codified€at€15Ð |*Ì%) ÐCFR€€ðð€6.4.€€For€violations€that€occurred€before€March€9,€2006,€the€maximum€monetary€penaltyÐ h+¸&* Ðper€violation€is€$11,000.€€For€violations€occurring€on€or€after€March€9,€2006,€the€maximumÐ T,¤'+ Ðmonetary€penalty€per€violation€is€$50,000.Ð @-(, Ї€€€€€(2)€An€order€denying€a€partyððs€export€privileges€under€the€EAR€may€be€issued,€under€€ððÐ ° Ð764.3(a)(2)€of€the€EAR;€orÐ œì ÐÌ€€€€€(3)€Exclusion€from€practice€under€€ðð€764.3(a)(3)€of€the€EAR.€€Ð tÄ ÐÌ(d)€€òòHow€BIS€determines€what€sanctions€are€appropriate€in€a€settlementóó.Ð L œ ÐÌ€€€€€(1)€€òòGeneral€Factorsóó.€€BIS€looks€to€the€following€general€factors€in€determining€whatÐ $ t Ðadministrative€sanctions€are€appropriate€in€each€settlement.Ð  ` ÐÌ€€€€€€€€€€(i)€€òòDegree€of€seriousnessóó.€€In€order€to€violate€the€antiboycott€provisions€of€the€EAR,€aÐ è 8  ÐU.S.€person€does€not€need€to€have€actual€ð ðknowledgeðð€or€a€reason€to€know,€as€that€term€isÐ Ô$  Ðdefined€in€€ðð€772.1€of€the€EAR,€of€relevant€U.S.€laws€and€regulations.€€Typically,€in€cases€that€doÐ À  Ðnot€involve€knowing€violations,€BIS€will€seek€a€settlement€for€payment€of€a€civil€penalty€(unlessÐ ¬ü  Ðthe€matter€is€resolved€with€a€warning€letter).€However,€in€cases€involving€knowing€violations,Ð ˜è  Ðconscious€disregard€of€the€antiboycott€provisions,€or€other€such€serious€violations€(e.g.,Ð „Ô  Ðfurnishing€prohibited€information€in€response€to€a€boycott€questionnaire€with€knowledge€thatÐ pÀ Ðsuch€furnishing€is€in€violation€of€the€EAR),€BIS€is€more€likely€to€seek€a€denial€of€exportÐ \¬ Ðprivileges€or€an€exclusion€from€practice,€and/or€a€greater€monetary€penalty€as€BIS€considers€suchÐ H˜ Ðviolations€particularly€egregious.Ð 4„ ÐÌ€€€€€€€€€€(ii)€€òòCategory€of€violationsóó.€€In€connection€with€its€activities€described€in€paragraph€(a)(1)Ð  \ Ðof€this€supplement,€BIS€recognizes€three€categories€of€violations€under€the€antiboycott€provisionsÐ øH Ðof€the€EAR.€€(òòSeeóó€€ðð€760.2,€€ðð€760.4€and€€ðð€760.5€of€the€EAR€for€examples€of€each€type€ofÐ ä4 Ðviolation€other€than€recordkeeping).€€These€categories€reflect€the€relative€seriousness€of€aÐ Ð  Ðviolation,€with€Category€A€violations€typically€warranting€the€most€stringent€penalties,€includingÐ ¼  Ðup€to€the€maximum€monetary€penalty,€a€denial€order€and/or€an€exclusion€order.€€ThroughÐ ¨ø Ðproviding€these€categories€in€this€penalty€guidelines€notice,€BIS€hopes€to€give€parties€a€generalÐ ”ä Ðsense€of€how€it€views€the€seriousness€of€various€violations.€€This€guidance,€however,€does€notÐ €Ð Ðconfer€any€right€or€impose€any€obligation€as€to€what€penalties€BIS€may€impose€based€on€itsÐ l¼ Ðreview€of€the€specific€facts€of€a€case.Ð X ¨ ÐÌ€€€€€€€€€€(A)€The€Category€A€violations€and€the€sections€of€the€EAR€that€set€forth€their€elementsÐ 0"€  Ðare:Ð #l! ÐÌ€€€€€€€€€€€€€€€(1)€€Discriminating€against€U.S.€persons€on€the€basis€of€race,€religion,€sex,€or€nationalÐ ô$D # Ðoriginð!ððð€760.2(b);Ð à%0!$ Ѐ€€€€€€€€€€€€€€(2)€€Refusing€to€do€business€or€agreeing€to€refuse€to€do€business€ð!ð€€ðð€760.2(a);Ð Ì&"% Ѐ€€€€€€€€€€€€€€(3)€€Furnishing€information€about€race,€religion,€sex,€or€national€origin€of€U.S.€personsÐ ¸'#& Ðincluding,€but€not€limited€to,€providing€information€in€connection€with€a€boycott€questionnaireÐ ¤(ô#' Ðabout€the€religion€of€employeesð!ððð€760.2(c);Ð )à$( Ѐ€€€€€€€€€€€€€€(4)€€Evading€the€provisions€of€part€760ð!ððð€760.4;Ð |*Ì%) Ѐ€€€€€€€€€€€€€€(5)€€Furnishing€information€about€business€relationships€with€boycotted€countries€orÐ h+¸&* Ðblacklisted€personsð!ððð€760.2(d);€andÐ T,¤'+ Ѐ€€€€€€€€€€€€€€(6)€€Implementing€letters€of€creditð!ððð€760.2(f).Ð @-(, Ї̀€€€€€€€€€(B)€The€Category€B€violations€and€the€sections€of€the€EAR€that€set€forth€their€elements€are:Ð œì ÐÌ€€€€€€€€€€€€€€€(1)€€Furnishing€information€about€associations€with€charitable€or€fraternal€organizationsÐ tÄ Ðwhich€support€a€boycotted€countryð!ððð€760.2(e);€andÐ `° Ѐ€€€€€€€€€€€€€€(2)€€Making€recordkeeping€violationsð!ðpart€762.Ð L œ ÐÌ€€€€€€€€€€(C)€€€The€Category€C€violation€and€the€section€of€the€EAR€that€sets€forth€its€elements€is:€Ð $ t ÐFailing€to€report€timely€receipt€of€boycott€requestsð!ððð€760.5.Ð  ` ÐÌ€€€€€€€€€€(iii)€€òòViolations€arising€out€of€related€transactionsóó.€Frequently,€a€single€transaction€canÐ è 8  Ðgive€rise€to€multiple€violations.€€Depending€on€the€facts€and€circumstances,€BIS€may€choose€toÐ Ô$  Ðimpose€a€smaller€or€greater€penalty€per€violation.€€In€exercising€its€discretion,€BIS€typically€looksÐ À  Ðto€factors€such€as€whether€the€violations€resulted€from€conscious€disregard€of€the€requirements€ofÐ ¬ü  Ðthe€antiboycott€provisions;€whether€they€stemmed€from€the€same€underlying€error€or€omission;Ð ˜è  Ðand€whether€they€resulted€in€distinguishable€or€separate€harm.€€The€three€scenarios€set€forthÐ „Ô  Ðbelow€are€illustrative€of€how€BIS€might€view€transactions€that€lead€to€multiple€violations.Ð pÀ ÐÌ€€€€€€€€€€€€€€€(A)€òòFirst€scenarioóó.€€An€exporter€enters€into€a€sales€agreement€with€a€company€in€aÐ H˜ Ðboycotting€country.€€In€the€course€of€the€negotiations,€the€company€sends€the€exporter€a€requestÐ 4„ Ðfor€a€signed€statement€certifying€that€the€goods€to€be€supplied€do€not€originate€in€a€boycottedÐ  p Ðcountry.€€The€exporter€provides€the€signed€certification.€€Subsequently,€the€exporter€fails€toÐ  \ Ðreport€the€receipt€of€the€request.€€The€exporter€has€committed€two€violations€of€the€antiboycottÐ øH Ðprovisions,€first,€a€violation€of€€ðð€760.2(d)€for€furnishing€information€concerning€the€past€orÐ ä4 Ðpresent€business€relationships€with€or€in€a€boycotted€country,€and€second,€a€violation€of€€ðð€760.5Ð Ð  Ðfor€failure€to€report€the€receipt€of€a€request€to€engage€in€a€restrictive€trade€practice€or€boycott.€Ð ¼  ÐAlthough€the€supplier€has€committed€two€violations,€BIS€may€impose€a€smaller€mitigated€penaltyÐ ¨ø Ðon€a€per€violation€basis€than€if€the€violations€had€stemmed€from€two€separate€transactions.Ð ”ä ÐÌ€€€€€€€€€€€€€€€(B)€òòSecond€scenarioóó.€€An€exporter€receives€a€boycott€request€to€provide€a€statement€thatÐ l¼ Ðthe€goods€at€issue€in€a€sales€transaction€do€not€contain€raw€materials€from€a€boycotted€countryÐ X ¨ Ðand€to€include€the€signed€statement€along€with€the€invoice.€€The€goods€are€shipped€in€ten€separateÐ D!” Ðshipments.€€Each€shipment€includes€a€copy€of€the€invoice€and€a€copy€of€the€signedÐ 0"€  Ðboycott-related€statement.€€Each€signed€statement€is€a€certification€that€has€been€furnished€inÐ #l! Ðviolation€of€€ðð€760.2(d)ððs€bar€on€the€furnishing€of€prohibited€business€information.€€Technically,Ð $X" Ðthe€exporter€has€committed€ten€separate€violations€of€€ðð€760.2(d)€and€one€violation€of€€ðð€760.5Ð ô$D # Ðfor€failure€to€report€receipt€of€the€boycott€request.€€Given€that€the€violations€arose€from€a€singleÐ à%0!$ Ðboycott€request,€however,€BIS€may€treat€the€violations€as€related€and€impose€a€smaller€penaltyÐ Ì&"% Ðthan€it€would€if€the€furnishing€had€stemmed€from€ten€separate€requests.Ð ¸'#& ÐÌ€€€€€€€€€€€€€€€(C)€€òòThird€scenarioóó.€€An€exporter€has€an€ongoing€relationship€with€a€company€in€aÐ )à$( Ðboycotting€country.€€The€company€places€three€separate€orders€for€goods€on€different€dates€withÐ |*Ì%) Ðthe€exporter.€€In€connection€with€each€order,€the€company€requests€the€exporter€to€provide€aÐ h+¸&* Ðsigned€statement€certifying€that€the€goods€to€be€supplied€do€not€originate€in€a€boycotted€country.€Ð T,¤'+ ÐThe€exporter€provides€a€signed€certification€with€each€order€of€goods€that€it€ships€to€theÐ @-(, Ðcompany.€€BIS€has€the€discretion€to€penalize€the€furnishing€of€each€of€these€three€items€ofÐ ° Ðinformation€as€a€separate€violation€of€€ðð€760.2(d)€of€the€EAR€for€furnishing€informationÐ œì Ðconcerning€past€or€present€business€relationships€with€or€in€a€boycotted€country.Ð ˆØ ÐÌ€€€€€€€€€€(iv)€€òòMultiple€violations€from€unrelated€transactionsóó.€In€cases€involving€multiple€unrelatedÐ `° Ðviolations,€BIS€is€more€likely€to€seek€a€denial€of€export€privileges,€an€exclusion€from€practice,Ð L œ Ðand/or€a€greater€monetary€penalty€than€in€cases€involving€isolated€incidents.€€For€example,€theÐ 8 ˆ Ðrepeated€furnishing€of€prohibited€boycott„„related€information€about€business€relationships€withÐ $ t Ðor€in€boycotted€countries€during€a€long€period€of€time€could€warrant€a€denial€order,€even€if€aÐ  ` Ðsingle€instance€of€furnishing€such€information€might€warrant€only€a€monetary€penalty.€€BIS€takesÐ ü L  Ðthis€approach€because€multiple€violations€may€indicate€serious€compliance€problems€and€aÐ è 8  Ðresulting€risk€of€future€violations.€€BIS€may€consider€whether€a€party€has€taken€effective€steps€toÐ Ô$  Ðaddress€compliance€concerns€in€determining€whether€multiple€violations€warrant€a€denial€orÐ À  Ðexclusion€order€in€a€particular€case.Ð ¬ü  ÐÌ€€€€€€€€€€(v)€€òòTiming€of€settlementóó.€€Under€€ðð€766.18€of€this€part,€settlement€can€occur€before€aÐ „Ô  Ðcharging€letter€is€served,€while€a€case€is€before€an€administrative€law€judge,€or€while€a€case€isÐ pÀ Ðbefore€the€Under€Secretary€for€Industry€and€Security€under€€ðð€766.22€of€this€part.€€However,€earlyÐ \¬ Ðsettlement„„for€example,€before€a€charging€letter€has€been€filed„„has€the€benefit€of€freeingÐ H˜ Ðresources€for€BIS€to€deploy€in€other€matters.€€In€contrast,€for€example,€the€BIS€resources€saved€byÐ 4„ Ðsettlement€on€the€eve€of€an€adversary€hearing€under€€ðð€766.13€of€this€part€are€fewer,€insofar€asÐ  p ÐBIS€has€already€expended€significant€resources€on€discovery,€motions€practice,€and€trialÐ  \ Ðpreparation.€€Given€the€importance€of€allocating€BIS€resources€to€maximize€enforcement€of€theÐ øH ÐEAR,€BIS€has€an€interest€in€encouraging€early€settlement€and€will€take€this€interest€into€accountÐ ä4 Ðin€determining€settlement€terms.Ð Ð  ÐÌ€€€€€€€€€€(vi)€€òòRelated€criminal€or€civil€violationsóó.€€Where€an€administrative€enforcement€matterÐ ¨ø Ðunder€the€antiboycott€provisions€involves€conduct€giving€rise€to€related€criminal€charges,€BISÐ ”ä Ðmay€take€into€account€the€related€violations€and€their€resolution€in€determining€whatÐ €Ð Ðadministrative€sanctions€are€appropriate€under€part€766€of€the€EAR.€€A€criminal€convictionÐ l¼ Ðindicates€serious,€willful€misconduct€and€an€accordingly€high€risk€of€future€violations,€absentÐ X ¨ Ðeffective€administrative€sanctions.€€However,€entry€of€a€guilty€plea€can€be€a€sign€that€a€partyÐ D!” Ðaccepts€responsibility€for€complying€with€the€antiboycott€provisions€and€will€take€greater€care€toÐ 0"€  Ðdo€so€in€the€future.€€In€appropriate€cases€where€a€party€is€receiving€substantial€criminal€penalties,Ð #l! ÐBIS€may€find€that€sufficient€deterrence€may€be€achieved€by€lesser€administrative€sanctions€thanÐ $X" Ðwould€be€appropriate€in€the€absence€of€criminal€penalties.€€Conversely,€BIS€might€seek€greaterÐ ô$D # Ðadministrative€sanctions€in€an€otherwise€similar€case€where€a€party€is€not€subjected€to€criminalÐ à%0!$ Ðpenalties.€€The€presence€of€a€related€criminal€or€civil€disposition€may€distinguish€settlementsÐ Ì&"% Ðamong€civil€penalty€cases€that€appear€to€be€otherwise€similar.€€As€a€result,€the€factors€set€forth€forÐ ¸'#& Ðconsideration€in€civil€penalty€settlements€will€often€be€applied€differently€in€the€context€of€aÐ ¤(ô#' Ðð ðglobal€settlementðð€of€both€civil€and€criminal€cases,€or€multiple€civil€cases€involving€otherÐ )à$( Ðagencies,€and€may€therefore€be€of€limited€utility€as€precedent€for€future€cases,€particularly€thoseÐ |*Ì%) Ðnot€involving€a€global€settlement.Ð h+¸&* ÐÌ€€€€€€€€€€(vii)€€òòFamiliarity€with€the€Antiboycott€Provisionsóó.€Given€the€scope€and€detailed€nature€ofÐ @-(, Ðthe€antiboycott€provisions,€BIS€will€consider€whether€a€party€is€an€experienced€participant€in€theÐ ° Ðinternational€business€arena€who€may€possess€(or€ought€to€possess)€familiarity€with€theÐ œì Ðantiboycott€laws.€€In€this€respect,€the€size€of€the€partyððs€business,€the€presence€or€absence€of€aÐ ˆØ Ðlegal€division€or€corporate€compliance€program,€and€the€extent€of€prior€involvement€in€businessÐ tÄ Ðwith€or€in€boycotted€or€boycotting€countries,€may€be€significant.Ð `° ÐÌ€€€€€(2)€€òòSpecific€mitigating€and€aggravating€factorsóó.€€€In€addition€to€the€general€factors€describedÐ 8 ˆ Ðin€paragraph€(d)(1)€of€this€supplement,€BIS€also€generally€looks€to€the€presence€or€absence€of€theÐ $ t Ðspecific€mitigating€and€aggravating€factors€in€this€paragraph€in€determining€what€sanctionsÐ  ` Ðshould€apply€in€a€given€settlement.€€These€factors€describe€circumstances€that,€in€BISððsÐ ü L  Ðexperience,€are€commonly€relevant€to€penalty€determinations€in€settled€cases.€€However,€thisÐ è 8  Ðlisting€of€factors€is€not€exhaustive€and€BIS€may€consider€other€factors€that€may€further€indicateÐ Ô$  Ðthe€blameworthiness€of€a€partyððs€conduct,€the€actual€or€potential€harm€associated€with€aÐ À  Ðviolation,€the€likelihood€of€future€violations,€and/or€other€considerations€relevant€to€determiningÐ ¬ü  Ðwhat€sanctions€are€appropriate.€€The€assignment€of€mitigating€or€aggravating€factors€will€dependÐ ˜è  Ðupon€the€attendant€circumstances€of€the€partyððs€conduct.€€Thus,€for€example,€one€prior€violationÐ „Ô  Ðshould€be€given€less€weight€than€a€history€of€multiple€violations,€and€a€previous€violationÐ pÀ Ðreported€in€a€voluntary€self-disclosure€by€a€party€whose€overall€compliance€efforts€are€of€highÐ \¬ Ðquality€should€be€given€less€weight€than€previous€violation(s)€not€involving€such€mitigatingÐ H˜ Ðfactors.€Some€of€the€mitigating€factors€listed€in€this€paragraph€are€designated€as€having€ð ðgreatÐ 4„ Ðweight.ðð€€When€present,€such€a€factor€should€ordinarily€be€given€considerably€more€weight€than€aÐ  p Ðfactor€that€is€not€so€designated.Ð  \ ÐÌ€€€€€€€€€€(i)€òòSpecific€mitigating€factorsóó.Ð ä4 ÐÌ€€€€€€€€€€(A)€€òòVoluntary€self-disclosureóó.€(GREAT€WEIGHT)€The€party€has€made€a€voluntaryÐ ¼  Ðself-disclosure€of€the€violation,€satisfying€the€requirements€of€€ðð€764.8€of€the€EAR.Ð ¨ø ÐÌ€€€€€€€€€€(B)€€òòEffective€compliance€programóó.€(GREAT€WEIGHT)Ð €Ð ÐÌ€€€€€€€€€€€€€€€(1)€òòGeneral€policy€or€program€pertaining€to€Antiboycott€Provisionsóó.€€BIS€will€considerÐ X ¨ Ðwhether€a€partyððs€compliance€efforts€uncovered€a€problem,€thereby€preventing€further€violations,Ð D!” Ðand€whether€the€party€has€taken€steps€to€address€compliance€concerns€raised€by€the€violation,Ð 0"€  Ðincluding€steps€to€prevent€recurrence€of€the€violation,€that€are€reasonably€calculated€to€beÐ #l! Ðeffective.€€The€focus€is€on€the€partyððs€demonstrated€compliance€with€the€antiboycott€provisions.€Ð $X" ÐWhether€a€party€has€an€effective€export€compliance€program€covering€other€provisions€of€theÐ ô$D # ÐEAR€is€not€relevant€as€a€mitigating€factor.€€In€the€case€of€a€party€that€has€done€previous€businessÐ à%0!$ Ðwith€or€in€boycotted€countries€or€boycotting€countries,€BIS€will€examine€whether€the€party€has€anÐ Ì&"% Ðeffective€antiboycott€compliance€program€and€whether€its€overall€antiboycott€compliance€effortsÐ ¸'#& Ðhave€been€of€high€quality.€€BIS€may€deem€it€appropriate€to€review€the€partyððs€internal€businessÐ ¤(ô#' Ðdocuments€relating€to€antiboycott€compliance€(e.g.,€corporate€compliance€manuals,€employeeÐ )à$( Ðtraining€materials).Ð |*Ì%) ÐÌ€€€€€€€€€€€€€€€(2)€òòCompliance€with€reporting€and€recordkeeping€requirementsóó.€€In€the€case€of€a€partyÐ T,¤'+ Ðthat€has€received€reportable€boycott€requests€in€the€past,€BIS€may€examine€whether€the€partyÐ @-(, Ðcomplied€with€the€reporting€and€recordkeeping€requirements€of€the€antiboycott€provisions.Ð ° ÐÌ€€€€€€€€€€(C)€òòLimited€business€with€or€in€boycotted€or€boycotting€countriesóó.€€The€party€has€had€littleÐ ˆØ Ðto€no€previous€experience€in€conducting€business€with€or€in€boycotted€or€boycotting€countries.Ð tÄ ÐPrior€to€the€current€enforcement€proceeding,€the€party€had€not€engaged€in€business€with€or€inÐ `° Ðsuch€countries,€or€had€only€transacted€such€business€on€isolated€occasions.€€BIS€may€examine€theÐ L œ Ðvolume€of€business€that€the€party€has€conducted€with€or€in€boycotted€or€boycotting€countries€asÐ 8 ˆ Ðdemonstrated€by€the€size€and€dollar€amount€of€transactions€or€the€percentage€of€a€partyððs€overallÐ $ t Ðbusiness€that€such€business€constitutes.Ð  ` ÐÌ€€€€€€€€€€(D)€€òòHistory€of€compliance€with€the€Antiboycott€Provisions€of€the€EARóó.Ð è 8  ÐÌ€€€€€€€€€€(òò1óó)€BIS€will€consider€it€to€be€a€mitigating€factor€if:Ð À  Ѐ€€€€€€€€€(òòióó)€The€party€has€never€been€convicted€of€a€criminal€violation€of€the€antiboycott€provisions;€Ð ¬ü  Ѐ€€€€€€€€(òòiióó)€in€the€past€5€years,€the€party€has€not€entered€into€a€settlement€or€been€found€liable€in€aÐ ˜è  Ðboycott-related€administrative€enforcement€case€with€BIS€or€another€U.S.€government€agency;Ð „Ô  Ѐ€€€€€€€€€(òòiiióó)€in€the€past€3€years,€the€party€has€not€received€a€warning€letter€from€BIS€relating€to€theÐ pÀ Ðantiboycott€provisions;€orÐ \¬ Ѐ€€€€€€€€€(òòivóó)€in€the€past€5€years,€the€party€has€not€otherwise€violated€the€antiboycott€provisions.Ð H˜ ÐÌ€€€€€€€€€€(òò2óó)€€Where€necessary€to€ensure€effective€enforcement,€the€prior€involvement€in€violationsÐ  p Ðof€the€antiboycott€provisions€of€a€partyððs€owners,€directors,€officers,€partners,€or€other€relatedÐ  \ Ðpersons€may€be€imputed€to€a€party€in€determining€whether€these€criteria€are€satisfied.€When€anÐ øH Ðacquiring€firm€takes€reasonable€steps€to€uncover,€correct,€and€disclose€to€BIS€conduct€that€gaveÐ ä4 Ðrise€to€violations€that€the€acquired€business€committed€before€the€acquisition,€BIS€typically€willÐ Ð  Ðnot€take€such€violations€into€account€in€applying€this€factor€in€settling€other€violations€by€theÐ ¼  Ðacquiring€firm.Ð ¨ø ÐÌ€€€€€(E)€€òòExceptional€cooperation€with€the€investigationóó.€€The€party€has€provided€exceptionalÐ €Ð Ðcooperation€to€OAC€during€the€course€of€the€investigation.Ð l¼ ÐÌ€€€€€(F)€€òòClarity€of€request€to€furnish€prohibited€information€or€take€prohibited€actionóó.€€The€partyÐ D!” Ðresponded€to€a€request€to€furnish€information€or€take€action€that€was€ambiguously€worded€orÐ 0"€  Ðvague.Ð #l! ÐÌ€€€€€(G)€òòViolations€arising€out€of€a€partyððs€ð ðpassiveðð€refusal€to€do€business€in€connection€with€anÐ ô$D # Ðagreementóó.€€The€party€has€acquiesced€in€or€abided€by€terms€or€conditions€that€constitute€aÐ à%0!$ Ðprohibited€refusal€to€do€business€(e.g.,€responded€to€a€tender€document€that€contains€prohibitedÐ Ì&"% Ðlanguage€by€sending€a€bid).€òòSeeóó€ð ðactiveðð€agreements€to€refuse€to€do€business€in€paragraphÐ ¸'#& Ð(d)(2)(ii)(I)€of€this€supplement.Ð ¤(ô#' ÐÌ€€€€€(H)€òòIsolated€occurrence€of€violationóó.€€The€violation€was€an€isolated€occurrence.€€(Compare€toÐ |*Ì%) Ðlong€duration€or€high€frequency€of€violations€as€an€aggravating€factor€in€paragraph€(d)(2)(ii)(F)Ð h+¸&* Ðof€this€supplement.)Ð T,¤'+ ÐÐ @-(, Ѐ€€€€(ii)€òòSpecific€Aggravating€Factorsóó.Ð ° ÐÌ€€€€€(A)€€òòConcealment€or€obstructionóó.€€The€party€made€a€deliberate€effort€to€hide€or€conceal€theÐ ˆØ Ðviolation.€(GREAT€WEIGHT)Ð tÄ ÐÌ€€€€€(B)€€òòSerious€disregard€for€compliance€responsibilitiesóó.€(GREAT€WEIGHT]€€There€isÐ L œ Ðevidence€that€the€partyððs€conduct€demonstrated€a€serious€disregard€for€responsibilities€associatedÐ 8 ˆ Ðwith€compliance€with€the€antiboycott€provisions€(e.g.:€knowing€violation€of€partyððs€ownÐ $ t Ðcompliance€policy€or€evidence€that€a€party€chose€to€treat€potential€penalties€as€a€cost€of€doingÐ  ` Ðbusiness€rather€than€develop€a€compliance€policy).Ð ü L  ÐÌ€€€€€(C)€€òòHistory€of€compliance€with€the€Antiboycott€Provisionsóó.Ð Ô$  ÐÌ€€€€€(òò1óó)€BIS€will€consider€it€to€be€an€aggravating€factor€if:Ð ¬ü  ÐÌà  à(òòióó)€The€party€has€been€convicted€of€a€criminal€violation€of€the€antiboycott€provisions;Ð „Ô  Ѐ€€€€€€€€€€(òòiióó)€in€the€past€5€years,€the€party€has€entered€into€a€settlement€or€been€found€liable€in€aÐ pÀ Ðboycott-related€administrative€enforcement€case€with€BIS€or€another€U.S.€government€agency;Ð \¬ Ѐ€€€€€€€€€(òòiiióó)€in€the€past€3€years,€the€party€has€received€a€warning€letter€from€BIS€relating€to€theÐ H˜ Ðantiboycott€provisions;€orÐ 4„ Ѐ€€€€€€€€€(òòivóó)€in€the€past€5€years,€the€party€has€otherwise€violated€the€antiboycott€provisions.Ð  p ÐÌ€€€€€(òò2óó)€€Where€necessary€to€ensure€effective€enforcement,€the€prior€involvement€in€violations€ofÐ øH Ðthe€antiboycott€provisions€of€a€partyððs€owners,€directors,€officers,€partners,€or€other€relatedÐ ä4 Ðpersons€may€be€imputed€to€a€party€in€determining€whether€these€criteria€are€satisfied.Ð Ð  ÐÌ€€€€€(òò3óó)€When€an€acquiring€firm€takes€reasonable€steps€to€uncover,€correct,€and€disclose€to€BISÐ ¨ø Ðconduct€that€gave€rise€to€violations€that€the€acquired€firm€committed€before€being€acquired,€BISÐ ”ä Ðtypically€will€not€take€such€violations€into€account€in€applying€this€factor€in€settling€otherÐ €Ð Ðviolations€by€the€acquiring€firm.Ð l¼ ÐÌ€€€€€(D)€€òòFamiliarity€with€the€type€of€transaction€at€issue€in€the€violationóó.€€For€example,€in€the€caseÐ D!” Ðof€a€violation€involving€a€letter€of€credit€or€related€financial€document,€the€party€routinely€pays,Ð 0"€  Ðnegotiates,€confirms,€or€otherwise€implements€letters€of€credit€or€related€financial€documents€inÐ #l! Ðthe€course€of€its€standard€business€practices.Ð $X" ÐÌ€€€€€(E)€òòPrior€history€of€business€with€or€in€boycotted€countries€or€boycotting€countriesóó.€€TheÐ à%0!$ Ðparty€has€a€prior€history€of€conducting€business€with€or€in€boycotted€and€boycotting€countries.€Ð Ì&"% ÐBIS€may€examine€the€volume€of€business€that€the€party€has€conducted€with€or€in€boycotted€andÐ ¸'#& Ðboycotting€countries€as€reflected€by€the€size€and€dollar€amount€of€transactions€or€the€percentageÐ ¤(ô#' Ðof€a€partyððs€overall€business€that€such€business€constitutes.Ð )à$( ÐÌ€€€€€(F)€òòLong€duration€or€high€frequency€of€violationsóó.€Violations€that€occur€at€frequent€intervalsÐ h+¸&* Ðor€repeated€violations€occurring€over€an€extended€period€of€time€may€be€treated€more€seriouslyÐ T,¤'+ Ðthan€a€single€violation€or€related€violations€that€are€committed€within€a€brief€period€of€time,Ð @-(, Ðparticularly€if€the€violations€are€committed€by€a€party€with€a€history€of€business€with€or€inÐ ° Ðboycotted€and€boycotting€countries.€(Compare€to€isolated€occurrence€of€violation€in€paragraphÐ œì Ð(d)(2)(i)(H)€of€this€supplement.)€Ð ˆØ ÐÌ€€€€€(G)€€òòClarity€of€request€to€furnish€prohibited€information€or€take€prohibited€actionóó.€€TheÐ `° Ðrequest€to€furnish€information€or€take€other€prohibited€action€(e.g.,€enter€into€agreement€to€refuseÐ L œ Ðto€do€business€with€a€boycotted€country€or€entity€blacklisted€by€a€boycotting€country)€is€faciallyÐ 8 ˆ Ðclear€as€to€its€intended€purpose.Ð $ t ÐÌ€€€€€(H)€€òòViolation€relating€to€specific€information€concerning€an€individual€entity€or€individualóó.€Ð ü L  ÐThe€party€has€furnished€prohibited€information€about€business€relationships€with€specificÐ è 8  Ðcompanies€or€individuals.Ð Ô$  ÐÌ€€€€€(I)€€òòViolations€relating€to€ð ðactiveðð€conduct€concerning€an€agreement€to€refuse€to€do€businessóó.€Ð ¬ü  ÐThe€party€has€taken€action€that€involves€altering,€editing,€or€enhancing€prohibited€terms€orÐ ˜è  Ðlanguage€in€an€agreement€to€refuse€to€do€business,€including€a€letter€of€credit,€or€drafting€a€clauseÐ „Ô  Ðor€provision€including€prohibited€terms€or€language€in€the€course€of€negotiating€an€agreement€toÐ pÀ Ðrefuse€to€do€business,€including€a€letter€of€credit.€òòSeeóó€ð ðpassiveðð€agreements€to€refuse€to€doÐ \¬ Ðbusiness€in€paragraph€(d)(2)(i)(G)€of€this€supplement.Ð H˜ ÐÌ(e)€€€òòDetermination€of€Scope€of€Denial€or€Exclusion€Orderóó.€€In€deciding€whether€and€what€scopeÐ  p Ðof€denial€or€exclusion€order€is€appropriate,€the€following€factors€are€particularly€relevant:€theÐ  \ Ðpresence€of€mitigating€or€aggravating€factors€of€great€weight;€the€degree€of€seriousness€involved;Ð øH Ðthe€extent€to€which€senior€management€participated€in€or€was€aware€of€the€conduct€in€question;Ð ä4 Ðthe€number€of€violations;€the€existence€and€seriousness€of€prior€violations;€the€likelihood€ofÐ Ð  Ðfuture€violations€(taking€into€account€relevant€efforts€to€comply€with€the€antiboycott€provisions);Ð ¼  Ðand€whether€a€civil€monetary€penalty€can€be€expected€to€have€a€sufficient€deterrent€effect.Ð ¨ø ÐÌ(f)€€òòHow€BIS€Makes€Suspension€and€Deferral€Decisionsóó.Ð €Ð ÐÌ€€€€€(1)€òòCivil€Penaltiesóó.€€In€appropriate€cases,€payment€of€a€civil€monetary€penalty€may€be€deferredÐ X ¨ Ðor€suspended.€€òòSeeóó€€ðð€764.3(a)(1)(iii)€of€the€EAR.€€In€determining€whether€suspension€or€deferralÐ D!” Ðis€appropriate,€BIS€may€consider,€for€example,€whether€the€party€has€demonstrated€a€limitedÐ 0"€  Ðability€to€pay€a€penalty€that€would€be€appropriate€for€such€violations,€so€that€suspended€orÐ #l! Ðdeferred€payment€can€be€expected€to€have€sufficient€deterrent€value,€and€whether,€in€light€of€allÐ $X" Ðthe€circumstances,€such€suspension€or€deferral€is€necessary€to€make€the€impact€of€the€penaltyÐ ô$D # Ðconsistent€with€the€impact€of€BIS€penalties€on€other€parties€who€committed€similar€violations.Ð à%0!$ ÐÌ€€€€€(2)€òòDenial€of€Export€Privileges€and€Exclusion€from€Practiceóó.€In€deciding€whether€a€denial€orÐ ¸'#& Ðexclusion€order€should€be€suspended,€BIS€may€consider,€for€example,€the€adverse€economicÐ ¤(ô#' Ðconsequences€of€the€order€on€the€party,€its€employees,€and€other€persons,€as€well€as€on€theÐ )à$( Ðnational€interest€in€maintaining€or€promoting€the€competitiveness€of€U.S.€businesses.€€AnÐ |*Ì%) Ðotherwise€appropriate€denial€or€exclusion€order€will€be€suspended€on€the€basis€of€adverseÐ h+¸&* Ðeconomic€consequences€only€if€it€is€found€that€future€violations€of€the€antiboycott€provisions€areÐ T,¤'+ Ðunlikely€and€if€there€are€adequate€measures€(usually€a€substantial€civil€monetary€penalty)€toÐ @-(, Ðachieve€the€necessary€deterrent€effect.Ð ° ÐÌDated:€July€9,€2007Ð ˆØ ÐÌChristopher€A.€PadillaÐ `° ÐAssistant€Secretary€for€Export€AdministrationÐ L œ ÐÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌà  àà ` àà ¸ àà  àà h àà À à