Technology Transfer Control Laws

The U.S. government’s definition of “technology” refers not only to physical goods, but to any specific information necessary for the development, production, or use of a product. Therefore, any of your company’s technical data that is “leaked” to unauthorized foreign nationals constitutes an export of technology to that foreign country, so that from an export control standpoint, the security of your technical data is vital for maintaining compliance with export control regulations.

Even when technology transfers are being conducted in a perfectly legal manner, it is important for company compliance officers to have the ability to view, monitor, and track that the transfers are occurring according to all government guidelines, and according to the details of the relevant agreements. This is because, for many corporations, there will be numerous individuals named in agreements who are authorized to access technical data; they will likely be doing so from a variety of different subsidiary companies in diverse locations throughout the world. Without effective oversight of tech data transfers, there is no way to know that your company is not inadvertently transmitting data to unauthorized parties who may use your technology to harm the United States and its allies.

Penalties for Illegal Technology Transfer

Proper supervision of tech data transfers is a responsibility your company cannot afford to ignore—if your technical data is being transmitted illegally, you are accountable. The illegal transfer of technical data poses a grave threat to the lives of the soldiers who put themselves in danger every day to protect you, which is why companies found to be violating export regulations with unauthorized tech data transfers face all the same penalties as they would for physically delivering controlled goods to any denied, restricted, or debarred party.

The consequences for non-compliance can include millions of dollars in monetary fines, temporary or permanent revocations of export licenses or cancellation of agreements, and for violations deemed to have been willful, even criminal prosecution including imprisonment. On top of the inevitable and irreparable damage to your company’s reputation if violations are detected, you may be inadvertently aiding enemies of the United States and its allies.

The Penalties

In FY 2011 combined U.S. Government Export Compliance Enforcement resulted in penalties of $732.8 MILLION and criminal prosecutions of 50 individuals and businesses.

DON’T LET THIS HAPPEN TO YOU!

OFAC Penalties

In FY 2011, settlements with 11 businesses were reached for a total of $623,000,000 in penalties as compared to 21 settlements in FY 2010 for a total of $91,000,000.

Since FY 2008, OFAC investigations resulted in settlements with 339 businesses for a total of $2,670,000,000. ( that’s $2.6 BILLION ! )

BIS Penalties

BIS investigations in FY 2011 resulted in the criminal conviction of 39 individuals and businesses for export violations, as compared to 31 convictions in FY 2010. The penalties for these convictions came to $20,214,000 in criminal fines, more than $2,100,000 in forfeitures, and more than 572 months of imprisonment; compared to $12,298,900 in criminal fines, more than $2,000,000 in forfeitures, and more than 522 months of imprisonment in FY 2010.

In FY 2011, BIS investigations resulted in the completion of 47 administrative cases against individuals and businesses and $ 8,508,300in administrative penalties, as compared to 53 cases and more than $ 25,400,000 in administrative penalties in FY 2010.

DDTC Penalties

In FY 2011 DOS entered into 1 consent agreement for a total of $79,000,000 in fines, as compared to 3 consent agreements in FY 2010 for $43,000,000. The Department also pursued in FY 2011 a total of 11 criminal prosecutions, as compared to 51 criminal prosecutions in FY 2010.