Past Export Violations Can Bring Weighty Disclosure Decisions

A Dutch company that voluntarily disclosed years of egregious U.S. export control violations and then cooperated with government investigators garnered leniency, but one must ask “compared to what”? Total forfeitures and penalties were $21.5 million, in exchange for a deferred prosecution agreement. No one is going to jail. The deal also avoided a more serious financial hit, one that could have put a venerable Dutch company out of business. Arent Fox attorneys Mary Carter Andrues, Kay C. Georgi, and Peter R. Zeidenberg look at what happened, what might have happened, and what lessons companies might derive from it, with regard to one of the most difficult and significant decisions a company will confront: whether or not to disclose past misconduct to the government. The authors list three key things to ascertain before filing an initial notification. Failure to do so, they say, is highly risky, “the equivalent to crossing the Rubicon when you do not know what is on the other side.”