ÿWPCT |תÜ@˜ªÄf0wyÜw¼€¤Øfá}­yv¶™«jXתÜ@¢£ðùèÊ) ؠĀÆÚ¿Mc×*Gõj?î Iîjà¶Á‘ Dz<Ï£EꀸÃM†¯H·ŽCYR`Ã…/ÅÍQ´;p8»5¡/×”1OBY…74“¢ßY‹3Þ;[8>$7Àh/˜ñõ üÌXñ*`8Ö×æÃJ5U6‹  0Ý&ŽFE;Ïz\…­î¯44Ž»ë®,Ñê"S¶  J _ÙZsFDLšýuZ#ئ¤D*{猲9:è…¼©?ÕPûC"†ÍCŒ‘N_P1dÐ’ŸÌùÆ؉l|ô‘•pÀĵml s—4ôÞ¤¸7PbïU$tÙM1¶á?.í˜k ºü¢3¶ËjÑPÒXWayv8+|s3¨º×vÅÜJ¦GCƒvižt/yžö›,ä·8>Þ¥ÏY„€Q`ÎëÊcˆä¹!£æA¨¶£Þ¬>çRÿÀppý=Ìþ¡ä2f’uÚ°âÉI¾†~‡ó¢L.,ˆm ëXÜé­fû<—ª™x|½³>‹'=9Ú>ÒxÎ÷éhÝ0Y¨¹G6fMEúLK)”#5nRÈ~u8`åc#ÁjUN+ %y 0: ^ ¹ wÅ 4É Ý ì mî N ø Hÿ U>G … 0V› 0cñ 0wT 0ŠË 0 U 0´õ 0Ç© 0Ûp 0ïK 0D: 1u~ 1uó 72hhhUNš6è 0VUNttttttttttttttttttttttttttttttttttttttttttttttttttttttttttt 0NÂÂÂÂÂD˜0(ÖÃ9 Z‹6Times New Roman RegularX(üœ$¡¡ÔUSUS.,Ô½rÛ4s ·…ï2Site0 3|x.ÿU‹ÿÀÀÀ antiboycott CFR RINC.F.R. EAARulemakingRostker N.W. OAC VSDsrecordkeepingLichtenbaum OCCmailto:public.comments@bis.doc.gov,ô\  `&Times New Roman Ñ ° Ñ(.3½Þ$§§Ý ƒüœ!ÝÔUSUS.,ÔÝ  Ý(;3£$´´Ô2#ÔÚ  Ú0Ú  Ú.Ô3  Ôà0  à(Oé;$µµà0  àÔ2#ÔÚ  ÚaÚ  Ú.Ô3  Ôà0` (#(#à(b·¤$¶¶à0  àà0` (#(#àÔ2#ÔÚ  ÚÚ  Ú.Ô3  Ôà0¸ ` (#` (#à(xir$··à0  àà0` (#(#àà0¸ ` (#` (#àÔ2#Ô(Ú  Ú0Ú  Ú)Ô3  Ôà0¸ (#¸ (#à(ŒÜ$¸¸à0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àÔ2#Ô(Ú  ÚaÚ  Ú)Ô3  Ôà0h(#(#à(ŸF$¹¹à0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#àÔ2#Ô(Ú  ÚÚ  Ú)Ô3  Ôà0Àh(#h(#à(³Àô$ººà0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#àà0Àh(#h(#àÔ2#ÔÚ  Ú0Ú  Ú)Ô3  Ôà0À(#À(#à(ǵ{$»»à0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#àà0Àh(#h(#àà0À(#À(#àÔ2#ÔÚ  ÚaÚ  Ú)Ô3  Ôà0p(#(#à(F$ïïà0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#àà0Àh(#h(#àà0À(#À(#àà0p(#(#àÔ2#ÔÙ ÙÚ  ÚÚ  ÚÙ Ù)Ô3  Ôà0Èp(#p(#àÙ Ùx/Õ3MQUY]aeiâBullets List3#37=CIQYag­­1.a.i.(1)(a)(i)1)a)i)(ÁON  Z ‹6Times New Roman Regularhttp://www.regulations.gov(.3½Þ$ªªÝ ƒüœ!ÝÔUSUS.,ÔÝ  Ý(ÈhH  Z6Times New Roman Regular(ÍO$——ÔÿÔòòóóÔÿÔmailto:David_Rostker@omb.eop.gov,Ý ƒüœ!ÝÔUSUS.,ÔÝ  ÝÔ_ÔÓÓÑ€OYÑÑ8€k}XXdúdÈ8Ñà€::1(#àBilling€Code:€€€€3510-33-PˆÐ ° ÐÌò òDEPARTMENT€OF€COMMERCEó óà À àà  àà p àÐ ˜è ÐÌò òBureau€of€Industry€and€Securityó óÐ € Ð ÐÌò ò15€CFR€Parts€764€and€766ó óà  àà h àà À àà  àÐ h¸  ÐÌò ò[Docket€No€€060511128„6128„01]ó óÐ P  ÐÌò òRIN€€€0694Ô‡Xk}XXXÔ„AD36ó óÐ 8ˆ ÐÔ#†Xk}XXXk}#ÔÌAntiboycott€penalty€guidelinesÐ  p ÐÔ‡Xk}XXXk}ÔÌò òAGENCY:ó ó€€Bureau€of€Industry€and€Security,€CommerceÔ#†Xk}XXXk}ª#ÔÐ  X ÐòòÌóóÔ‡Xk}XXXk}Ôò òACTION:ó ó€€Proposed€Rule.Ô#†Xk}XXXk}A#ÔòòÐ ð#@  ÐÌò òóóSUMMARY:ó ó€€This€proposed€rule€would€set€forth€BIS€policy€concerning€voluntary€self€disclosures€ofÐ Ø'(#$ Ðviolations€of€part€760€€(Restrictive€Trade€Practices€or€Boycotts)€of€the€Export€AdministrationÐ Ì)%& ÐRegulations€(EAR)€€and€violations€of€part€762€(Recordkeeping)€of€the€EAR€that€relate€to€part€760.€Ô_ÔÐ À+'( ÐÑOYÑâ âÑ°°Ñâ âÑ  ÑThis€proposed€rule€also€would€set€forth€the€factors€that€the€Bureau€of€Industry€and€Security€(BIS)Ð ° Ðconsiders€when€deciding€whether€to€pursue€administrative€charges€or€settle€allegations€of€such€violationsÐ ¤ô Ðas€well€as€the€factors€that€BIS€considers€when€deciding€what€level€of€penalty€to€seek€in€administrativeÐ ˜è Ðcases.€Ôf  ÔÔg ÔÐ Œ Ü ÐÌò òDATES:ó ó€€Comments€must€be€received€by€[60€DAYS€AFTER€DATE€OF€PUBLICATION].Ð tÄ  ÐÌòòóóò òADDRESSES:ó ó€€Comments€may€be€made€via€the€Federal€e„Rulemaking€portal€at,Ð \¬  ÐÔ4‚ Ý °ÔÝ‚]ÍOÝÔÿÔòòÝ  ÝÔ5  Ôhttp://www.regulations.govÔ6çÔÝ‚]ÍOûƒÝóóÔÿÔÝ  ÝÔ7Ý ” )Ô€,€by€e„mail€directly€to€BIS€at€Ô4‚ Ý YÔÝ‚]ÍOÝÔÿÔòòÝ  ÝÔ5  Ôpubliccomments@bis.doc.gov,Ô6ÆÔÝ‚]ÍOÚƒÝóóÔÿÔÝ  ÝÔ7Ý u Ô€via€fax€at€202Ð P  Ð482€3355€or€to€U.S.€Department€of€Commerce,€Bureau€of€Industry€and€Security,€Regulatory€PolicyÐ D” ÐDivision,€Room€2703,€14òòthóó€Street€and€Pennsylvania€Avenue,€N.W.,€Washington,€D.C.€20230.€€PleaseÐ 8ˆ Ðrefer€to€RIN€0694„AD36€in€all€comments.Ð ,| ÐÌò òFOR€FURTHER€INFORMATION€CONTACT:ó ó€€Edward€O.€Ô_ÔWeantÔ_Ô€III,€Acting€Director,€Office€ofÐ d ÐAntiboycott€Compliance,€Bureau€of€Industry€and€Security,€United€States€Department€of€Commerce,€atÐ  X Ð(202)€482„2381.Ð ü!L ÐÌò òSUPPLEMENTARY€INFORMATION:ó óÐ ä%4!" Ðò òBackgroundó óÐ Ø'(#$ ÐÌà  àPart€760€of€the€EAR€Ô_Ôð!ðÔ_Ô€Restrictive€Trade€Practices€or€Boycotts€ð!ð€prohibits€U.S.€persons€fromÐ À+'( Ðtaking€or€knowingly€agreeing€to€take€certain€actions€with€intent€to€comply€with,€further,€or€support€anÐ ° Ðunsanctioned€foreign€boycott.€€Part€760€of€the€EAR€also€requires€U.S.€persons€who€are€recipients€ofÐ ¤ô Ðrequests€ð ð.€.€.€to€take€any€action€which€has€the€effect€of€furthering€or€supporting€a€restrictive€tradeÐ ˜è Ðpractice€or€boycott€fostered€or€imposed€by€a€foreign€country€against€a€country€friendly€to€the€UnitedÐ Œ Ü ÐStates€or€against€any€United€States€person€.€.€.ðð€to€report€receipt€of€those€requests€and€whether€theyÐ € Ð Ðtook€the€requested€action.€€Part€762€of€the€EAR€€ð!ð€Recordkeeping€ð!ð€€requires,€òòinter€aliaóó,€retention€ofÐ tÄ  Ðcertain€documents€that€contain€information€related€to€the€prohibitions€or€reporting€requirements€of€partÐ h¸  Ð760.€€Collectively€these€provisions€of€the€EAR€are€referred€to€in€this€notice€as€the€antiboycottÐ \¬  Ðprovisions.€€BIS€administers€and€enforces€the€antiboycott€provisions€through€its€Office€of€AntiboycottÐ P  ÐCompliance€(OAC).€€€This€proposed€rule€would:€set€forth€specific€procedures€for€voluntary€selfÐ D” Ðdisclosures€of€violations€to€OAC,€provide€guidance€about€how€OAC€responds€to€violations€of€theÐ 8ˆ Ðantiboycott€provisions,€and€describe€how€OAC€makes€penalty€determinations€in€the€settlement€ofÐ ,| Ðadministrative€enforcement€cases€related€to€the€antiboycott€provisions.€€Ð  p ÐÌà  àThis€rule€would€not€address€disclosure€provisions€or€penalty€determination€factors€in€any€otherÐ  X Ðmatters€such€as€criminal€prosecutions€for€violations€of€the€antiboycott€provisions€or€tax€penalties€that€theÐ ü!L ÐDepartment€of€Treasury€may€impose€for€antiboycott€violations€that€arise€pursuant€to€the€Ô_ÔRibicoffÔ_ÔÐ ð#@  ÐAmendment€to€the€Tax€Reform€Act€of€1976,€as€implemented€by€Section€999€of€the€Internal€RevenueÐ ä%4!" ÐCode.Ôf  ÔÔg Ô€€Voluntary€self„disclosure€provisions€and€guidance€on€charging€and€penalty€determinations€inÐ Ø'(#$ Ðsettlement€of€administrative€enforcement€cases€that€are€not€related€to€the€antiboycott€provisions€areÐ Ì)%& Ðstated€elsewhere€in€the€EAR.Ð À+'( ÐÔ_Ô€Ìò òProposed€Changes€to€the€EAR€in€this€ruleó óÐ ¤ô ÐÌà  àThis€rule€would€create€a€new€ðð€764.8€setting€forth€the€procedures€for€voluntary€self„disclosureÐ Œ Ü Ðof€violations€of€the€antiboycott€provisions.€€It€would€also€create€a€new€supplement€No.€2€to€part€764Ð € Ð Ðthat€would€describe€how€BIS€responds€to€violations€of€the€antiboycott€provisions€and€how€BIS€makesÐ tÄ  Ðpenalty€determinations€in€the€settlement€of€administrative€enforcement€cases.€€Ôg ÔThe€rule€would€also€makeÐ h¸  Ðtechnical€and€conforming€changes€to€part€766.€Ôf  Ô€Ôg ÔÔf  ÔÔg ÔÐ \¬  ÐÌà  àThis€rule€would€provide€specific€criteria€with€respect€to€what€constitutes€a€voluntary€self„Ð D” Ðdisclosure€and€how€voluntary€self„disclosures€relate€to€other€sources€of€information€that€OAC€may€haveÐ 8ˆ Ðconcerning€violations€of€the€antiboycott€provisions.€€The€rule€would€also€inform€the€public€of€the€factorsÐ ,| Ðthat€OAC€usually€considers€to€be€important€when€settling€antiboycott€administrative€enforcement€cases.€Ð  p ÐBIS€believes€that€publishing€this€information€in€the€EAR€will€tend€to€place€all€€potential€respondents€andÐ d Ðtheir€counsel€on€a€more€equal€footing€because€procedures€for€making€voluntary€disclosures,€informationÐ  X Ðabout€how€OAC€responds€to€violations€and€how€OAC€makes€penalty€determinations€in€the€settlementÐ ü!L Ðof€administrative€enforcement€cases€will€all€be€matters€of€public€record.€€BIS€also€believes€suchÐ ð#@  Ðpublication€will€make€settlement€of€administrative€cases€more€efficient,€Ôf  ÔasÔf  ÔÔg Ô€respondents€and€OAC€will€beÐ ä%4!" Ðable€to€focus€on€the€important€factors€in€administrative€enforcement€cases€andÔf  Ô€because€OAC€generallyÐ Ø'(#$ Ðexpends€fewer€resources€to€obtain€information€received€through€voluntary€self„disclosure€thanÐ Ì)%& ÐinÔg Ôformation€obtained€by€other€means.Ôf  ÔÔg ÔÐ À+'( ЇòòCreation€of€ðð€764.8€ð!ð€Voluntary€self„disclosure€of€boycott€violationsóó.Ð ° ÐÌà  àThe€proposed€new€ðð€764.8€would€both€define€what€constitutes€a€voluntary€self„disclosure€andÐ ˜è Ðprovide€the€procedures€for€making€such€disclosures.€€Compliance€with€the€provisions€of€ðð€764.8€wouldÐ Œ Ü Ðbe€important€as€a€voluntary€self„disclosure€ð ðsatisfying€the€requirements€of€ðð€764.8ðð€Ôf  ÔwouldÔg Ô€be€designated€Ð € Ð Ðas€a€mitigating€factor€of€€ð ðGREAT€WEIGHTðð€in€the€settlement€of€administrative€cases€as€set€forth€in€theÐ tÄ  Ðproposed€new€Supplement€No.€2€to€part€764.€€Supplement€No.€2€would€provide€that€such€factors€ð ðwillÐ h¸  Ðordinarily€be€given€considerably€more€weight€than€a€factor€that€is€not€so€designated.ðð€€In€addition€toÐ \¬  Ðproviding€such€an€incentive€for€the€submission€of€voluntary€self„disclosures,€BIS€anticipates€thatÐ P  Ðproposed€ðð764.8€will€promote€more€effective€use€of€OAC€resources,€as€the€receipt€of€voluntary€self„Ð D” Ðdisclosures€will€reduce€the€time€that€OAC€must€spend€identifying€and€investigating€possible€violations.€Ð 8ˆ ÐThe€rule€provides€the€benefit€of€a€mitigating€factor€to€those€who€self„disclose€before€OAC€has€investedÐ ,| Ðresources€to€investigate€violations€based€on€information€it€might€receive€from€another€source.€Ð  p ÐÌà  àProposed€ðð€764.8€requires,€among€other€things,€that€voluntary€selfÔf  ÔÔg Ô„Ôf  ÔÔg Ôdisclosures€be€in€writingÔf  ÔÔg Ô€andÐ  X Ðthat€they€be€received€by€OAC€before€OAC€learns€of€the€same€or€substantially€similar€information€fromÐ ü!L Ðð ðanotherÔf  Ô€Ôg Ôsourceðð€and€has€commenced€an€investigation€or€inquiry€in€connection€with€that€information.€Ð ð#@  ÐÔf  ÔÔg ÔThe€proposed€ðð€764.8€would€provide€that€persons€may€make€an€initial€written€notification€followed€byÐ ä%4!" Ðsubmission€of€a€more€detailed€narrative€account€and€supporting€documents.€€For€purposes€ofÐ Ø'(#$ Ðdetermining€whether€a€voluntary€self„disclosure€was€received€before€OAC€learned€of€the€same€orÐ Ì)%& Ðsubstantially€similar€information€from€another€source,€the€date€of€the€voluntary€self„disclosure€will€beÐ À+'( Ðdeemed€to€be€the€date€that€OAC€received€the€initial€notification€if€the€person€making€the€disclosureÔf  ÔÔg ÔÐ ° ÐsubsequentlyÔf  ÔÔg Ô€submits€the€required€narrative€account€and€supporting€documentation.€€Ð ¤ô ÐÌà  àBIS€believes€that€requiring€voluntary€self„disclosures€to€be€in€writing€reduces€the€possibility€ofÐ Œ Ü Ðconfusion€as€to€whether€a€particular€communication€was€intended€to€be€a€voluntary€self„disclosure€andÐ € Ð Ðis€likely€to€produce€more€complete€disclosures€thaÔg ÔnÔf  ÔÔg Ô€would€oral€disclosures.€Ð tÄ  ÐÌà  àBIS€recognizes€that€two€features€of€its€existing€regulations€and€practices€may€impact€theÐ \¬  Ðrequirement€that€a€voluntary€self„disclosure€be€received€before€OAC€learns€of€the€same€or€substantiallyÐ P  Ðsimilar€information€from€another€source.€€The€first€such€feature€is€the€set€of€reporting€requirements€inÐ D” Ððð760.5.€€The€second€such€feature€is€OACððs€practice€of€encouraging€persons€with€questions€about€theÐ 8ˆ Ðregulations€to€contact€OAC€by€telephone€or€e„mail€for€advice.€Ð ,| ÐÌà  àSection€760.5€of€the€EAR,€requires€any€ð ðU.S.€person€who€receives€a€request€to€take€any€action€Ð d Ðthat€would€have€the€effect€of€furthering€or€supporting€a€restrictive€trade€practice€or€boycott€fostered€orÐ  X Ðimposed€by€a€foreign€country€against€a€country€friendly€to€the€United€States€or€against€any€UnitedÐ ü!L ÐStates€personðð€to€report€to€OAC€both€receipt€of€the€request€and€the€action€that€the€person€took€inÐ ð#@  Ðresponse€to€that€request.€€In€some€instances,€taking€the€requested€action€would€be€a€violation€of€ððÐ ä%4!" Ð760.2.€€BIS€recognizes€that,€in€such€instances,€the€reporting€requirements€of€ðð€760.5€would€have€theÐ Ø'(#$ Ðeffect€of€requiring€a€person€to€disclose€a€violation€that€it€had€committed.Ôg Ô€€The€proposed€rule€providesÐ Ì)%& Ðthat€reports€filed€pursuant€to€ðð€760.2€constitute€ð ðinformation€received€from€another€source.ðð€€Thus,€aÐ À+'( Ðperson€who€wishes€to€make€a€voluntary€self„disclosure€of€a€violation€that€is€based€on€an€action€that€ððÐ ° Ð760.5€requires€that€person€to€report€would€have€to€make€sure€that€OAC€receives€the€written€initialÐ ¤ô Ðnotification€portion€of€the€voluntary€self„disclosure€before€OAC€began€an€investigation€or€inquiry€basedÐ ˜è Ðon€the€information€received€in€the€required€report.€€The€report€itself€would€not€serve€as€the€initialÐ Œ Ü Ðnotification.€However,€if€OAC€received€the€report€and€the€initial€notification€simultaneously,€it€would€beÐ € Ð Ðdeemed€to€have€received€the€initial€notification€before€it€had€begun€an€investigation€or€inquiry€based€onÐ tÄ  Ðthe€report.€€That€person€would€then€have€to€comply€with€the€remaining€requirements€of€ðð€764.8Ôf  ÔÔg Ô,€butÐ h¸  Ðonce€that€person€complied€with€those€requirements,€the€voluntary€disclosure€would€be€treated€as€havingÐ \¬  Ðbeen€received€at€the€time€that€the€initial€notification€was€received.€€Ð P  ÐÌÔf  ÔÔg Ôà  àOAC€has,€for€a€number€of€years,€provided€advice€about€the€Ôg ÔaÔf  ÔÔg Ôntiboycott€Ôg ÔpÔf  ÔÔg Ôrovisions€to€personsÐ 8ˆ Ðrequesting€such€advice€via€telephone€or€e„mail.€€In€some€instances,€the€person€requesting€such€adviceÐ ,| Ðmay€disclose€that€it€has€committed€a€violation.€€OACððs€practice€has€been€to€encourage€such€persons€toÐ  p Ðmake€voluntary€self„disclosures.€€OAC€wants€to€continue€to€encourage€persons€with€questions€aboutÐ d Ðthe€antiboycott€provisions€to€fully€disclose€all€relevant€facts€when€making€telephone€or€e„mail€inquirÔf  ÔÔg ÔiÔf  ÔÔg ÔesÐ  X Ðfor€advice€concerning€the€antiboycott€provisions.€€Therefore,€OAC€will€not€treat€violations€revealed€inÐ ü!L Ðtelephone€or€e„mail€requests€for€advice€concerning€the€antiboycott€provisions€as€information€receivedÐ ð#@  Ðfrom€another€source.€€However,€to€meet€the€requirements€of€Ôg Ôðð€764Ôf  ÔÔg Ô.8,€the€person€wishing€to€make€aÐ ä%4!" Ðvoluntary€Ôg Ôself„disclosureÔf  ÔÔg Ô€would€have€to€make€a€written€disclosure€pursuant€to€ðð€764.8Ôg Ô.€€TÔf  ÔÔg Ôhe€informationÐ Ø'(#$ Ðprovided€over€the€telephone€or€via€e„mail€while€seeking€advice€would€not€constitute€a€voluntary€self„Ð Ì)%& Ðdisclosure€or€even€an€initial€notification€of€a€voluntary€self„disclosure.€€OACððs€practice€is€to€informÐ À+'( Ðpeople€who€reveal€violations€in€the€course€of€seeking€such€advice€of€their€opportunity€to€make€aÐ ° Ðvoluntary€disclosure.Ð ¤ô ÐÌà  àProposed€ðð€764.8€also€provides€that€for€a€firm€to€be€deemed€to€have€made€a€voluntary€self„Ð Œ Ü Ðdisclosure€under€that€section,€the€individual€making€the€disclosure€must€do€so€with€the€ð ðfull€knowledgeÐ € Ð Ðand€authorization€of€the€firmððs€senior€management.ðð€€OAC€believes€that€this€requirement€is€needed€toÐ tÄ  Ðmake€clear€that€a€firm€may€not€claim€the€benefits€of€a€voluntary€Ôg Ôself„Ôf  ÔÔg Ôdisclosure€when€a€subordinateÐ h¸  Ðemployee€acting€on€his€or€her€own€Ôg ÔinitiativeÔf  ÔÔg Ô€disclosed€wrongdoing€by€the€firmððs€management.€Ð \¬  Ðò òÌÔf  Ôó óÔg ÔòòCreation€of€Supplement€No.€2€to€Part€764óó.Ð D” ÐÌà  àThis€rule€would€also€create€a€new€supplement€to€part€764€to€set€forth€publicly€BISððs€practiceÐ ,| Ðwith€respect€to€violations€of€the€antiboycott€provisions.€€The€proposed€supplement€describes€the€waysÐ  p Ðthat€BIS€responds€to€violations,€the€types€of€administrative€sanctions€that€may€be€imposed€for€violations,Ð d Ðthe€factors€that€BIS€considers€in€determining€what€sanctions€are€appropriate,€the€factors€that€BISÐ  X Ðconsiders€in€determining€the€appropriate€scope€of€the€denial€or€exclusion€order€sanctions,€and€theÐ ü!L Ðfactors€BIS€considers€when€deciding€whether€to€suspend€a€sanction.Ð ð#@  ÐÌà  àParagraph€(a)€of€the€proposed€supplement€contains€introductory€material€that€defines€the€scopeÐ Ø'(#$ Ðand€limitations€of€the€supplement€as€well€as€Ôg ÔsetsÔf  ÔÔg Ô€forth€BISððs€policy€of€encouraging€any€party€inÐ Ì)%& Ðsettlement€negotiations€with€BIS€to€provide€all€information€that€the€party€believes€is€relevant€to€theÐ À+'( Ðapplication€of€the€guidance€in€the€supplement€as€well€as€information€that€is€relevant€to€determiningÐ ° Ðwhether€a€violationÔf  ÔÔg Ô€has,€in€factÔg Ô,Ôf  ÔÔg Ô€occurred€and€whether€the€party€has€a€defense€to€any€potential€charges.€Ð ¤ô ÐÌà  àParagraph€(b)€of€the€proposed€supplement€sets€forth€the€three€actions€that€OAC€may€take€inÐ Œ Ü Ðresponse€to€a€violation,€which€are:€issue€a€warning€letter,€pursue€an€administrative€case,€and€refer€a€caseÐ € Ð Ðto€the€Department€of€Justice€for€criminal€prosecution.€€This€paragraph€also€lists€the€factors€that€oftenÐ tÄ  Ðcause€OAC€to€issue€a€warning€letter.€€It€also€notes€OACððs€ability€to€issue€òòproposedóó€administrativeÐ h¸  Ðcharging€letters€rather€than€òòactualóó€administrative€charging€letters.€€Proposed€charging€letters€are€issuedÐ \¬  ÐÔg Ôinformally€Ôf  ÔÔg Ôto€provide€an€opportunity€for€settlementÔf  ÔÔg Ô€before€initiation€of€a€formal€administrativeÐ P  ÐproceedingÔf  ÔÔg Ô.€€As€noted€in€paragraph€(b),€OAC€is€not€required€to€issue€a€proposed€charging€letter.Ð D” ÐFinally€paragraph€(b)€notes€that€OAC€may€refer€a€case€to€the€Department€of€Justice€for€criminalÐ 8ˆ Ðprosecution€in€addition€to€pursuing€an€administrative€enforcement€action.Ð ,| ÐÌà  àParagraph€(c)€of€the€proposed€supplement€lists€the€types€of€administrative€sanctions€that€may€beÐ d Ðimposed€in€administrative€cases.€€Those€sanctions€are:€a€monetary€penalty,€a€denial€of€export€privilegesÐ  X Ðand€an€order€excluding€the€party€from€practice€before€BIS.Ð ü!L ÐÌà  àParagraph€(d)Ôf  Ô€Ôg Ôprovides€information€about€how€OAC€determines€what€sanctions€areÐ ä%4!" Ðappropriate€in€settlement€of€administrative€enforcement€cases.€€The€paragraph€describes€the€generalÐ Ø'(#$ Ðfactors€that€BIS€believes€are€important€in€Ôf  ÔÔg Ôcases€concerningÔf  ÔÔg Ô€violations€of€the€antiboycott€provisions.€€TheÐ Ì)%& Ðparagraph€then€describes€specific€mitigating€and€aggravating€factors.€€OAC€generally€looks€to€theÐ À+'( Ðpresence€or€absence€of€these€specific€factors€in€determining€what€sanctions€should€apply€in€a€givenÐ ° Ðsettlement.€€€Ð ¤ô ÐÔ‡Xk}XXXk}ÔÌà  àParagraph€(d)€begins€by€listing€seven€general€factors€to€which€OAC€looks€in€determining€whatÐ Œ Ü Ðadministrative€sanctions€are€appropriate€in€each€settlement.€€Those€seven€general€factors€are:€degree€ofÐ € Ð Ðseriousness,€category€of€violation,€whether€multiple€violations€arise€from€related€transactions,€whetherÐ tÄ  Ðmultiple€violations€arise€from€unrelated€transactions,€the€timing€of€a€settlement,€whether€there€are€relatedÐ h¸  Ðcivil€or€criminal€violations,€and€the€partyððs€familiarity€with€the€antiboycott€provisions.€€The€supplementÐ \¬  Ðprovides€general€guidance€on€how€OAC€applÔg ÔiÔf  ÔÔg Ôes€each€of€these€seven€general€factors.Ð P  ÐÌà  àParagraph€(d)€then€addresses€the€role€of€eight€specific€mitigating€and€nine€specific€aggravatingÐ 8ˆ Ðfactors€whose€presence€or€absence€OAC€generally€considers€when€Ô#†Xk}XXXk}LM#Ôdetermining€what€sanctions€shouldÐ ,| Ðapply.€€The€listed€factors€are€not€exhaustive€and€OAC€may€consider€other€factors€as€well€in€a€particularÐ  p Ðcase.€€However,€the€listed€factors€are€those€that€OACððs€experience€indicates€are€commonly€relevant€toÐ d Ðpenalty€determinations€in€cases€that€are€settled.€€Factors€identified€by€the€phrase€ð ðGREAT€WEIGHTððÐ  X ÐÔf  ÔÔg ÔwillÔf  ÔÔg Ô€ordinarily€be€given€considerably€more€weight€than€other€factors.Ð ü!L ÐÌà  àThe€eight€specific€mitigating€factors€in€paragraph€(d)€are:€voluntary€self€disclosure,€effectiveÐ ä%4!" Ðcompliance€program,€limited€business€with€or€in€boycotting€countries,€history€of€compliance€with€theÐ Ø'(#$ Ðantiboycott€provisions,€exceptional€cooperation€with€the€investigation,€(lack€of)€clarity€of€request€toÐ Ì)%& Ðfurnish€prohibited€information€or€take€prohibited€action,€violations€arising€out€of€a€partyððs€ð ðpassiveððÐ À+'( Ðrefusal€to€do€business€in€connection€with€an€agreement,€and€isolated€occurrence€or€good€faithÐ ° Ðmisinterpretation.€Ð ¤ô ÐÌà  àThe€nine€specific€aggravating€factors€in€paragraph€(b)€are:€concealment€or€obstruction,€seriousÐ Œ Ü Ðdisregard€for€compliance€responsibilities,€history€of€(lack€of)€compliance€with€the€antiboycottÐ € Ð Ðprovisions,€familiarity€with€the€type€of€transaction€at€issue€in€the€violationÔf  ÔÔg ÔsÔf  ÔÔg Ô,€prior€history€of€business€withÐ tÄ  Ðor€in€boycotted€countries€or€boycotting€countries,€long€duration€or€high€frequency€of€violations,€clarityÐ h¸  Ðof€request€to€furnish€prohibited€information€or€take€prohibited€action,€violationÔf  ÔÔg ÔsÔf  ÔÔg Ô€relating€to€informationÐ \¬  ÐconcerningÔg Ô€a€specific€individual€or€entity,€and€violations€relating€to€ð ðactiveðð€conduct€concerning€anÐ P  Ðagreement€to€refuse€to€do€business.Ð D” ÐÌà  àThe€specific€mitigating€and€aggravating€factors€are€set€forth€in€more€detail€in€the€supplement.€Ð ,| ÐBIS€believes€thatÔf  Ôò òó óÔg Ô€in€most€casesÔf  Ôò òó óÔg Ô€evaluating€these€factors€provides€a€fair€basis€for€determining€the€penaltyÐ  p Ðthat€is€appropriate€when€settling€an€administrative€case.€€However,€these€mitigating€and€aggravatingÐ d Ðfactors€are€not€exclusive.€€BIS€may€consider€other€factors€that€are€relevant€in€a€particular€case€andÐ  X Ðrespondents€in€settlement€negotiations€may€submit€other€relevant€factors€for€BISððs€consideration.Ð ü!L ÐÌà  àParagraph€(e)€sets€forth€the€factors€that€OAC€considers€to€be€particularly€relevant€whenÐ ä%4!" Ðdeciding€whether€to€impose€a€denial€or€exclusion€order€in€the€settlement€of€administrative€cases.€Ð Ø'(#$ ÐCertain€factors€in€paragraph€(d)€ð!ð€the€four€factors€that€are€given€great€weight,€degree€of€seriousness,Ð Ì)%& Ðand€history€of€prior€violations€and€their€seriousness€ð!ð€are€included€in€paragraph€(f).€€In€addition,€BISÐ À+'( Ðconsiders€the€extent€to€which€a€firmððs€senior€management€participated€in€or€was€aware€of€the€conductÐ ° Ðthat€gave€rise€to€the€violation,€the€likelihood€of€future€violations,€and€whether€a€monetary€penalty€couldÐ ¤ô Ðbe€expected€to€have€a€sufficient€deterrent€effect€to€be€particularly€relevant€in€determining€whether€aÐ ˜è Ðmonetary€penalty€is€appropriate.Ð Œ Ü ÐÌà  àParagraph€(f)€provides€examples€of€factors€that€OAC€may€consider€in€deciding€whether€toÐ tÄ  Ðsuspend€or€defer€a€monetary€penalty,€or€suspend€an€order€denying€export€privileges€or€an€orderÐ h¸  Ðproviding€an€exclusion€from€practice.€€With€respect€to€suspension€or€deferral€of€monetary€penaltiesÐ \¬  ÐOAC€may€consider€whetherÔf  Ô€the€Ôf  ÔÔg Ôparty€has€demonstrated€aÔf  ÔÔg Ô€limited€ability€to€pay€Ôf  ÔÔg Ôa€penalty€thatÔf  ÔÔg Ô€would€beÐ P  Ðappropriate€for€Ôg ÔsuchÔf  ÔÔg Ô€violation,€Ôg Ôso€that€suspended€or€deferred€payment€canÔf  ÔÔg Ô€be€expected€to€haveÐ D” Ðsufficient€deterrent€valueÔg Ô,Ôf  ÔÔg Ô€and€whether€the€impact€of€the€penalty€would€be€consistent€with€the€impact€ofÐ 8ˆ Ðpenalties€on€other€parties€who€commit€similar€violations.€€€When€deciding€whether€to€suspend€denial€orÐ ,| Ðexclusion€orders€OAC€may€consider€the€adverse€economic€consequences€of€the€order€on€the€party,€itsÐ  p Ðemployees,€and€other€persons,€as€well€as€on€the€national€interest€in€the€competitiveness€of€U.S.Ð d Ðbusinesses.€€However,€such€orders€will€be€suspended€for€adverse€economic€consequences€only€if€futureÐ  X Ðviolations€are€unlikely€and€if€there€are€adequate€measures€(usually€a€substantial€civil€penalty)€to€achieveÐ ü!L Ðthe€necessary€deterrent€effect.€€Ð ð#@  ЀÌÌRulemaking€RequirementsÐ Ì)%& ÐÔ‡Xk}XXXk}ÔÐ À+'( Ð1.à  àThis€rule€has€been€determined€to€be€not€significant€for€purposes€of€Executive€Order€12866.Ð ° ÐÌ2.à  àÔ#†Xk}XXXk}-f#ÔNotwithstanding€any€other€provision€of€law,€no€person€is€required€to€respond€to,€nor€shall€anyÐ ˜è Ðperson€be€subject€to€a€penalty€for€failure€to€comply€with€a€collection€of€information,€subject€to€theÐ Œ Ü Ðrequirements€of€the€Paperwork€Reduction€Act,€unless€that€collection€of€information€displays€a€currentlyÐ € Ð Ðvalid€Office€of€Management€and€Budget€Control€Number.€€If€adopted€as€a€final€rule,€this€proposed€ruleÐ tÄ  Ðwould€expand€the€scope€of€information€collected€pursuant€to€Office€of€Management€and€BudgetÐ h¸  ÐControl€Number€0694„0058.€€Such€an€expansion€would€be€subject€to€the€Paperwork€Reduction€Act€ofÐ \¬  Ð1980€(44€U.S.C.€3501€òòet€seq.óó)€requiring€Office€of€Management€and€Budget€authorization€beforeÐ P  Ðimplementation.€€BIS€will€prepare€documentation€for€presentation€to€OMB€to€obtain€authorization€forÐ D” Ðthis€expansion.€€Send€comments€about€this€collection,€including€suggestions€for€reducing€the€burden,€toÐ 8ˆ ÐDavid€Rostker,€Office€of€Management€and€Budget€(OMB),€by€e„mail€toÐ ,| ÐÔ4‚bis°ÔÝ‚]ÍOÝÔÿÔòòÝ  ÝÔ5  ÔDavid_Rostker@omb.eop.gov,Ô6™kÔÝ‚]ÍO­kƒÝóóÔÿÔÝ  ÝÔ7is ÛkÔ€or€by€fax€to€(202)€395„7285;€and€to€the€Office€of€Administration,Ð  p ÐBureau€of€Industry€and€Security,€Department€of€Commerce,€14th€and€Pennsylvania€Avenue,€N.W.,Ð d ÐRoom€6883,€Washington,€D.C.€20230.€Ð  X ÐÌ3.à  àThis€rule€does€not€contain€policies€with€Federalism€implications€as€that€term€is€defined€inÐ ð#@  ÐExecutive€Order€13132.Ð ä%4!" ÐÌ4.à  àThe€Chief€Counsel€for€Regulation€of€the€Department€of€Commerce€has€certified€to€the€CounselÐ Ì)%& Ðfor€Advocacy€that€this€proposed€rulemaking€is€not€expected€to€have€a€significant€economic€impact€on€aÐ À+'( Ðsubstantial€number€of€small€entities.€€Ð ° ÐÌò òNumber€of€Small€Entitiesó óÐ ˜è ÐÌAs€a€strictly€legal€matter,€the€antiboycott€provisions€of€the€Export€Administration€Regulations€apply€toÐ € Ð Ðany€activities€in€the€interstate€or€foreign€commerce€of€the€United€States€by€any€individual,€or€anyÐ tÄ  Ðassociation€or€organization,€public€or€private€who€meets€the€regulatory€definition€of€ð ðUnited€StatesÐ h¸  ÐPerson.ðð€€Pursuant€to€this€standard,€virtually€any€small€entity€located€in€the€United€States€could€beÐ \¬  Ðsubject€to€these€provisions€and€affected€by€this€proposed€rule.€€However,€the€rule€addresses€self„Ð P  Ðdisclosure€of€òòviolationsóó€of€the€antiboycott€provisions€and€OACððs€practices€in€administrative€settlementsÐ D” Ðof€alleged€or€self„disclosed€violations€of€those€provisions.€€In€practice,€conduct€that€would€be€a€violationÐ 8ˆ Ðof€the€antiboycott€provisions€almost€always€occurs€among€international€banks€and€among€companiesÐ ,| Ðthat€export€to€or€provide€services€in€the€Middle€East.€€Violations€of€the€antiboycott€provisions€generallyÐ  p Ðoccur€in€response€to€a€request€to€take€an€action€the€antiboycott€provisions€prohibit€or€require€to€beÐ d Ðreported€or€both.€€Such€requests€usually€arise€in€connection€with€trade€in€the€Middle€East.€€EntitiesÐ  X Ðwhose€business€does€not€involve€transactions€originating€in€the€Middle€East€(or,€in€the€case€of€banks,€aÐ ü!L Ðcorrespondence€relationship€with€another€bank€that€deals€with€transactions€originating€in€the€MiddleÐ ð#@  ÐEast)€are€unlikely€to€encounter€circumstances€in€which€a€violation€of€the€antiboycott€provisions€couldÐ ä%4!" Ðoccur.€€OAC€has€no€information€as€to€what€percentage€of€small€entities€are€engaged€in€suchÐ Ø'(#$ Ðtransactions,€but€expects€that€it€would€be€only€a€small€fraction€of€such€entities.€€For€example,€entitiesÐ Ì)%& Ðsuch€as€local€retailers,€gas€stations,€farm€labor€contractors,€or€entities€engaged€in€local€services€such€asÐ À+'( Ðdry€cleaning€or€trash€removal€are€extremely€unlikely€to€encounter€the€kind€of€commercial€transactions€inÐ ° Ðwhich€a€violation€of€the€antiboycott€provisions€is€possible.€€Furthermore,€the€absolute€numbers€ofÐ ¤ô Ðenforcement€cases€are€small.€€Ð ˜è ÐÌOAC€opened€investigations€on€33€entities€during€the€period€from€October€2,€2004€through€May€16,Ð € Ð Ð2006.€€Based€on€the€criteria€in€the€Small€Business€Administration€Table€of€Small€Business€SizeÐ tÄ  ÐStandards€effective€as€of€January€5,€2006,€OAC€believes€that€18€of€these€entities€would€qualify€as€smallÐ h¸  Ðentities€and€15€wold€not€qualify.€€€Ð \¬  ÐÌEven€assuming€that€the€number€of€small€entities€impacted€by€this€rule€is€deemed€to€be€significant,€theÐ D” Ðeconomic€impact€of€this€rule€would€not€impose€a€significant€burden€on€such€entities.€€Ð 8ˆ ÐÌò òEconomic€Impactó óÐ  p ÐÌThis€proposed€rule€addresses€procedures€to€be€followed€in€connection€with€voluntary€self„disclosuresÐ  X Ðof€violations€of€the€antiboycott€provisions€of€the€Export€Administration€Regulations€and€describesÐ ü!L ÐOACððs€practices€in€settling€administrative€enforcement€cases.€€The€penalties€for€violations€of€theÐ ð#@  Ðantiboycott€provisions€can€include€civil€monetary€penalties,€denial€of€export€privileges,€exclusion€fromÐ ä%4!" Ðpractice€before€BIS€criminal€fine€and€jail€sentences.€€Ð Ø'(#$ ÐÌApart€from€a€written€initial€notification€generally€describing€the€violations€and€a€subsequent€writtenÐ À+'( Ðnarrative€describing€the€violation€in€more€detail,€the€documents€that€this€rule€would€require€personsÐ ° Ðmaking€voluntary€self€disclosures€to€provide€to€OAC€are€documents€that€the€preexisting€recordkeepingÐ ¤ô Ðrequirements€of€the€Export€Administration€Regulations€require€such€persons€to€keep.€€These€documentsÐ ˜è Ðare€currently€collected€either€by€request€or€pursuant€to€a€subpoena€in€the€course€of€enforcementÐ Œ Ü Ðinvestigations.€€Under€the€proposed€rule,€the€documents€would€be€submitted€by€the€person€orÐ € Ð Ðorganization€making€the€voluntary€self„disclosure€as€part€of€that€disclosure€in€advance€of€a€specificÐ tÄ  Ðrequest€by€OAC.€€Such€voluntary€self„disclosures€benefit€the€government€because€investigationsÐ h¸  Ðinitiated€through€voluntary€self„disclosures€typically€require€fewer€enforcement€staff€hours€to€complete.€Ð \¬  ÐThe€rule€recognizes€this€benefit€to€the€government€by€treating€voluntary€disclosures€made€in€accordanceÐ P  Ðwith€the€provisions€of€the€rule€as€one€of€two€possible€mitigating€factors€of€ð ðgreat€weight.ðð€€By€the€termsÐ D” Ðof€the€rule€such€factors€€ð ðwill€ordinarily€be€given€considerably€more€weight€than€a€factor€that€is€not€soÐ 8ˆ Ðdesignated.ðð€€Thus,€a€firm€that€elected€to€make€a€voluntary€disclosure€under€the€proposed€rule€would€Ð ,| Ðlikely€incur€a€lesser€penalty€than€a€firm€that€commits€a€similar€violation€that€OAC€discovers€throughÐ  p Ðother€means,€although€both€firms€would€be€likely€to€incur€similar€costs€in€connection€with€supplyingÐ d Ðdocuments€to€OAC€€€Ð  X ÐÌOAC€estimates€that€voluntary€disclosures€can€take€require€as€little€as€one€staff€hour€or€as€much€as€fiftyÐ ð#@  Ðstaff€hours€to€prepare€and€submit€with€the€average€being€about€ten€staff€hours.€€At€an€average€costs€ofÐ ä%4!" Ð$40€per€hour,€the€estimated€range€of€costs€is€from€$40€if€one€hour€is€required€to€$2,000€if€50€hours€areÐ Ø'(#$ Ðrequired.€€The€projected€average€cost€would€be€$400€per€disclosure.€€However,€as€noted€above,€theÐ Ì)%& Ðcost€of€supplying€documents€to€OAC€in€course€of€an€investigation€likely€would€be€incurred€by€the€firmÐ À+'( Ðeven€without€this€rule€or€even€if€the€firm€makes€no€voluntary€self„disclosure.€€Moreover,€this€rule€wouldÐ ° Ðreduce€uncertainty€for€entities€that€become€involved€in€administrative€enforcement€proceedings€with€BISÐ ¤ô Ðregardless€of€whether€the€entity€made€a€voluntary€self€disclosure€because€the€rule€would€€set€forth€as€aÐ ˜è Ðmatter€of€public€record€the€factors€that€BIS€typically€considers€in€settling€administrative€enforcementÐ Œ Ü Ðcases.€Ð € Ð ÐÌThis€proposed€rule€would€not€alter€the€elements€of€the€offense€with€respect€to€any€violation€of€the€EAR,Ð h¸  Ðit€would€not€expand€scope€of€the€information€that€OAC€collects€when€it€conducts€individualÐ \¬  Ðenforcement€investigations€and€it€would€not€authorize€OAC€to€collect€this€information€in€situations€otherÐ P  Ðthan€individual€enforcement€investigations.€€The€effect€of€this€proposed€rule€would€be€to€reduceÐ D” Ðuncertainty€for€persons€contemplating€voluntary€self„disclosures€and€for€persons€engaged€inÐ 8ˆ Ðadministrative€enforcement€settlement€negotiations€with€OAC.€€Ð ,| ÐÌAccordingly,€the€Chief€Counsel€for€Regulation€of€the€Department€of€Commerce€has€certified€to€theÐ d ÐChief€Counsel€of€Advocacy€that€this€proposed€rule€will€not€have€a€significant€economic€impact€on€aÐ  X Ðsubstantial€number€of€small€entities.€Ð ü!L ÐÌÌBIS€will€consider€all€comments€received€on€or€before€[60€DAYS€FROM€DATE€OFÐ Ø'(#$ ÐPUBLICATION].€€BIS€will€consider€comments€received€after€that€date€if€possibleò òó ó€but€cannot€assureÐ Ì)%& Ðsuch€consideration.€€All€public€comments€on€this€proposed€rule€must€be€in€writing€(including€fax€or€e„Ð À+'( Ðmail)€and€will€be€a€matter€of€public€record,€available€for€public€inspection€and€copying.€€The€Office€ofÐ ° ÐAdministration,€Bureau€of€Industry€and€Security,€U.S.€Department€of€Commerce,€displays€these€publicÐ ¤ô Ðcomments€on€BIS's€Freedom€of€Information€Act€(FOIA)€Web€site€at€http://www.bis.doc.gov/foia.€Ð ˜è ÐThis€office€does€not€maintain€a€separate€public€inspection€facility.€€If€you€have€technical€difficultiesÐ Œ Ü Ðaccessing€this€web€site,€please€call€BIS's€Office€of€Administration€at€(202)€482„0637€for€assistance.Ð € Ð ÐÌÌ15€CFR€Part€764Ð \¬  ÐÌAdministrative€practice€and€procedure,€Exports,€Law€enforcement,€PenaltiesÐ D” ÐÌ15€CFR€Part€766Ð ,| ÐÌAdministrative€practice€and€procedure,€Confidential€business€information,€Exports,€Law€enforcement,Ð d ÐPenalties€Ð  X ÐÌà  àFor€the€reasons€discussed€in€the€preamble,€this€proposed€rule€would€amend€the€ExportÐ ð#@  ÐAdministration€Regulations€15€CFR€Parts€730€„€799€as€follows:Ð ä%4!" ÐÔf  Ôò òÔg Ôó óò òÌPart€764ð!ð[AMENDED]ó óÔ‡Xk}XXXk}ÔÐ Ì)%& ÐÐ À+'( Ðà  à1.€€The€authority€citation€for€part€764€continues€to€read€as€follows:Ð ° ÐÌà  àò òAuthority:ó ó€50€U.S.C.€app.€2401€òòet€seqóó.;€50€U.S.C.€1701€òòet€seqóó.;Ô#†Xk}XXXk}6“#ÔÔ‡"Xk}XXXk}Ô€E.O.€13222,€66€FR€44025,Ð ˜è ÐÔ#†Xk}XX"Xk}f”#ÔÔ‡Xk}XXXk}Ô€3€CFR,€2001€Comp.,€p.€783;€Notice€of€August€2,€2005,€70€FR€45273€(August€5,€2005).Ô#†Xk}XXXk}Ö”#ÔÔ‡Xk}XXXk}Ô€Ô#†Xk}XXXk}k•#ÔÔ‡Xk}XXXk}ÔÐ Œ Ü ÐÌà  à2.€€Add€a€new€ðð€764.8€to€read€as€follows:Ð tÄ  ÐÌÔ#†Xk}XXXk}®•#Ôò òÑ8€k}XdúXXdú8Ñðð764.8€€€Voluntary€self„disclosures€€for€boycott€violations.ó ó€€€This€section€sets€forth€procedures€€forÐ \¬  Ðdisclosing€violations€of€part€760€of€the€EAR€ð!ð€Restrictive€Trade€Practices€or€Boycotts€and€violations€ofÐ P  Ðpart€762€ð!ð€Recordkeeping€ð!ð€with€respect€to€records€related€to€part€760.€€In€this€section,€theseÐ D” Ðprovisions€are€referred€to€collectively€as€the€antiboycott€provisions.€€This€section€also€describes€BISððsÐ 8ˆ Ðpolicy€regarding€such€disclosures.Ð ,| ÐÌ(a)€€òòGeneral€policyóó.€€BIS€strongly€encourages€disclosure€to€the€Office€of€Antiboycott€Compliance€€ifÐ d Ðyou€believe€that€you€may€have€violated€the€antiboycott€provisions.€Voluntary€selfÔf  Ô€Ôg Ô„Ôf  ÔÔg Ôdisclosures€are€aÐ  X Ðmitigating€factor€with€respect€to€any€enforcement€action€that€OAC€might€take.Ð ü!L ÐÌ(b)€€òòLimitationsóó.€€(1)€This€section€does€not€apply€to€disclosures€of€violations€relating€provisions€of€theÐ ä%4!" ÐÔf  ÔÔg ÔEAR€other€than€the€antiboycott€provisions.€€Section€764.5€of€this€part€describes€how€to€prepareÐ Ø'(#$ Ðdisclosures€of€violations€of€the€EAR€other€than€the€antiboycott€provisions.€€Ð Ì)%& ÐÐ À+'( Ð(2)€€The€provisions€of€this€section€apply€only€when€information€is€provided€to€OAC€for€its€review€inÐ ° Ðdetermining€whether€to€take€administrative€action€under€part€766€of€the€EAR€for€violations€of€theÐ ¤ô ÐÔf  ÔÔg Ôantiboycott€provisionsÔg Ô.€Ð ˜è ÐÌ(3)Ôf  Ô€òòTimingóó:Ôf  ÔÔg Ô€€The€provisions€of€this€section€apply€only€if€OAC€receives€the€voluntary€selfÔf  ÔÔg Ô„Ôf  ÔÔg Ôdisclosure€asÐ € Ð Ðdescribed€in€paragraph€(c)(2)€of€this€section€and€commences€an€investigation€or€inquiry€in€connectionÐ tÄ  Ðwith€that€information€before€it€receives€the€same€or€substantially€similar€information€from€another€source.€Ð h¸  ÐÔf  ÔÔg ÔÌ(i)€òòMandatory€Reportsóó.€€For€purposes€of€this€section,€OACððs€receipt€of€a€report€required€to€be€filedÐ P  Ðunder€Ôg Ôðð€760Ôf  ÔÔg Ô.5€of€the€EAR€that€discloses€that€a€person€tookÔf  ÔÔg Ô€an€action€prohibited€by€part€760€of€theÐ D” ÐEAR€is€receipt€of€information€from€another€source.Ð 8ˆ ÐÌ(ii)€òòRequests€for€Adviceóó.€€For€purposes€of€this€section,€a€violation€that€is€revealed€to€OAC€by€a€personÐ  p Ðwho€is€seeking€advice,€either€by€telephone€or€e„mail,€about€the€antiboycott€provisions€is€not€receipt€ofÐ d Ðinformation€from€another€source.€€Such€revelation€also€is€not€a€voluntary€disclosure€or€initial€notificationÐ  X Ðof€a€voluntary€disclosure€for€purposes€of€this€section.€€Ð ü!L Ðò òó óÌ(4)€Although€a€voluntary€self-disclosure€is€a€mitigating€factor€in€determining€what€administrativeÐ ä%4!" Ðsanctions,€if€any,€will€be€sought€by€OAC,€it€is€a€factor€that€is€considered€together€with€all€other€factorsÐ Ø'(#$ Ðin€a€case.€€The€weight€given€to€voluntary€self-disclosure€is€solely€within€the€discretion€of€OAC,€and€theÐ Ì)%& Ðmitigating€effect€of€voluntary€self-disclosure€may€be€outweighed€by€aggravating€factors.ò òó ó€€Voluntary€self„Ð À+'( Ðdisclosure€does€not€prevent€transactions€from€being€referred€to€the€Department€of€Justice€for€criminalÐ ° Ðprosecution.€€In€such€a€case,€OAC€would€notify€the€Department€of€Justice€of€the€voluntaryÐ ¤ô Ðself-disclosure,€but€the€consideration€of€that€factor€is€within€the€discretion€of€the€Department€of€Justice.Ð ˜è ÐÌ(5)€€A€firm€will€not€be€deemed€to€have€made€a€disclosure€under€this€section€unless€the€individual€makingÐ € Ð Ðthe€disclosure€did€so€with€the€full€knowledge€and€authorization€of€the€firmððs€senior€management.Ð tÄ  ÐÌ(6)€€The€provisions€of€this€section€do€not,€nor€should€they€be€relied€on€to,€create,€confer,€or€grant€anyÐ \¬  Ðrights,€benefits,€privileges,€or€protection€enforceable€at€law€or€in€equity€by€any€person,€business,€orÐ P  Ðentity€in€any€civil,€criminal,€administrative,€or€other€matter.€Ð D” ÐÌ(c)€òòInformation€to€be€providedóó.€€(1)€€òòGeneralóó.€€Any€person€wanting€to€disclose€information€thatÐ ,| Ðconstitutes€a€voluntary€self-disclosure€should,€in€the€manner€outlined€below,€initially€notify€OAC€as€soonÐ  p Ðas€possible€after€violations€are€discovered,€and€then€conduct€a€thorough€review€of€all€transactionsÐ d Ðwhere€violations€of€the€antiboycott€provisions€are€suspected.Ð  X ÐÌ(2)€€òòInitial€notificationóó.€€The€initial€notification€must€be€in€writing€and€be€sent€to€the€address€inÐ ð#@  Ððð764.8(c)(7)€of€this€part.€€The€notification€should€include€the€name€of€the€person€making€the€disclosureÐ ä%4!" Ðand€a€brief€description€of€the€suspected€violations.€€The€notification€should€describe€the€general€natureÐ Ø'(#$ Ðand€extent€of€the€violations.€€If€the€person€making€the€disclosure€subsequently€completes€the€narrativeÐ Ì)%& Ðaccount€required€by€ðð764.8(c)(3)€of€this€part,€the€disclosure€will€be€deemed€to€have€been€made€on€theÐ À+'( Ðdate€of€the€initial€notification€for€purposes€of€ðð764.8(b)(3)€of€this€part.Ð ° ÐÌ(3)€òòNarrative€accountóó.€€After€the€initial€notification,€a€thorough€review€should€be€conducted€of€allÐ ˜è Ðbusiness€transactions€where€possible€antiboycott€provision€violations€are€suspected.€€OACÐ Œ Ü Ðrecommends€that€the€review€cover€a€period€of€five€years€prior€to€the€date€of€the€initial€notification.€€IfÐ € Ð Ðyour€review€goes€back€less€than€five€years,€you€risk€failing€to€discover€violations€that€may€later€becomeÐ tÄ  Ðthe€subject€of€an€investigation.€€Any€violations€not€voluntarily€disclosed€do€not€receive€Ôf  ÔÔg Ôthe€sameÐ h¸  Ðmitigation€as€the€violations€voluntarily€self„disclosedÔf  ÔÔg Ô€under€this€section.€€However,€the€failure€to€makeÐ \¬  Ðsuch€disclosures€will€not€be€treated€as€a€separate€violation€unless€some€other€section€of€the€EAR€orÐ P  Ðother€provision€of€law€requires€disclosure.€€Upon€completion€of€the€review,€OAC€should€be€furnishedÐ D” Ðwith€a€narrative€account€that€sufficiently€describes€the€suspected€violations€so€that€their€nature€andÐ 8ˆ Ðgravity€can€be€assessed.€€The€narrative€account€should€also€describe€the€nature€of€the€review€conductedÐ ,| Ðand€measures€that€may€have€been€taken€to€minimize€the€likelihood€that€violations€will€occur€in€the€future.€Ð  p ÐThe€narrative€account€should€in‚clude:Ð d ÐÌ(i)€€The€kind€of€violation€involved,€for€example,€the€furnishing€of€a€certificate€indicating€that€the€goodsÐ ü!L Ðsupplied€did€not€originate€in€a€boycotted€country;Ð ð#@  ÐÌ(ii)€€€An€explanation€of€when€and€how€the€violations€occurred,€including€a€description€of€activitiesÐ Ø'(#$ Ðsurrounding€the€violations€(Ôf  Ôò òÔg ÔòòÔf  Ôó óÔg Ôe.gÔf  Ôò òÔg ÔóóÔf  Ôó óÔg Ô.,€contract€negotiations,€sale€of€goods,€implementation€of€letter€of€credit,Ð Ì)%& Ðbid€solicitation);Ð À+'( Ї(iii)€€The€complete€identities€and€addresses€of€all€individuals€and€organizations,€whether€foreign€orÐ ° Ðdomestic,€involved€in€the€activities€giving€rise€to€the€violations;€andÐ ¤ô ÐÌ(iv)€€A€description€of€any€mitigating€factors.Ð Œ Ü ÐÌ(4)€Supporting€documentation.€€Ð tÄ  ÐÌ(i)€€The€narrative€account€should€be€accompanied€by€copies€of€documents€that€explain€and€support€it,Ð \¬  Ðincluding:Ð P  ÐÌ(A)€Copies€of€boycott€certifications€and€€declarations€relating€to€Ôf  ÔÔg Ôthe€Ôf  ÔÔg Ôviolation,€or€copies€of€documentsÐ 8ˆ Ðcontaining€prohibited€language€or€prohibited€requests€for€information;Ð ,| ÐÌ(B)€Other€documents€relating€to€the€violation,€such€as€letters,€facsimiles,€telexes€and€other€evidence€ofÐ d Ðwritten€or€oral€communications,€negotiations,€internal€memoranda,€purchase€orders,€invoices,€bidÐ  X Ðrequests,€letters€of€credit€and€brochuresò ò;ó óÐ ü!L ÐÌ(ii)Ôf  ÔÔg Ô€€Any€relevant€documents€not€attached€to€the€narrative€account€must€be€retained€by€the€personÐ ä%4!" Ðmaking€the€disclosure€until€the€latest€of€the€following:€€the€documents€are€supplied€to€OAC,€OAC€issuesÐ Ø'(#$ Ða€warning€letter€for€the€violation,€BIS€issues€an€order€that€constitutes€the€final€agency€action€in€theÐ Ì)%& Ðmatter€and€all€avenues€for€appeal€are€exhausted;€or€the€documents€are€no€longer€required€to€be€keptÐ À+'( Ðunder€part€762€of€the€EARÔf  ÔÔg Ô.Ôf  ÔÔg ÔÐ ° ÐÌ(5)€€òòCertificationóó.€€A€certification€must€be€submitted€stating€that€all€of€the€representations€made€inÐ ˜è Ðconnection€with€the€voluntary€self-disclosure€are€true€and€correct€to€the€best€of€that€person's€knowledgeÐ Œ Ü Ðand€belief.€€Certifications€made€by€a€corporation€or€other€organization€should€be€signed€by€an€official€ofÐ € Ð Ðthe€corporation€or€other€organization€with€the€authority€to€do€so.€€Section€764.2(g)€of€this€partÔg Ô€relatingÐ tÄ  Ðto€false€or€misleading€representationsÔf  ÔÔg Ô€applies€in€connection€with€the€disclosure€of€information€under€thisÐ h¸  Ðsection.Ð \¬  ÐÌ(6)€€òòOral€presentationsóó.€€OAC€believes€that€oral€presentations€are€generally€not€necessary€to€augmentÐ D” Ðthe€written€narrative€account€and€supporting€documentation.€€If€the€person€making€the€disclosureÐ 8ˆ Ðbelieves€otherwise,€a€request€for€a€meeting€should€be€included€with€the€disclosure.Ð ,| ÐÌ(7)€€òòWhere€to€make€voluntary€self-disclosuresóó.€€The€information€constituting€a€voluntary€self-disclosureÐ d Ðor€any€other€correspondence€pertaining€to€a€voluntary€self-disclosure€Ôg ÔshouldÔf  ÔÔg Ô€be€submitted€to:€Office€ofÐ  X ÐAntiboycott€Compliance,€14òòthóó€and€Pennsylvania€€Ave.,€N.W.,€Room€6098,€Washington,€DC€20230,€Ð ü!L ÐTel:€(202)€482„2381,€Facsimile:€(202)€482„0913.Ð ð#@  ÐÌ(d)€€€òòAction€by€the€Office€of€Antiboycott€Complianceóó.€€After€OAC€has€been€provided€with€the€requiredÐ Ø'(#$ Ðnarrative€and€supporting€documentation,€it€will€acknowledge€the€disclosure€by€letter,€provide€the€personÐ Ì)%& Ðmaking€the€disclosure€with€a€point€of€contact,€and€take€whatever€additional€action,€including€furtherÐ À+'( Ðinvestigation,€it€deems€appropriate.€€As€quickly€as€the€facts€and€circum‚stances€of€a€given€case€permit,Ð ° ÐOAC€may€take€any€of€the€following€actions:Ð ¤ô ÐÌ(1)€€Inform€the€person€making€the€disclosure€that,€based€on€the€facts€disclosed,€it€plans€to€take€noÐ Œ Ü Ðaction;Ð € Ð ÐÌ(2)€€Issue€a€warning€letter;Ð h¸  ÐÌ(3)€€Issue€a€proposed€charging€letter€pursuant€to€ðð766.18€of€the€EAR€and€attempt€to€settle€the€matter;Ð P  ÐÌ(4)€€Issue€a€charging€letter€pursuant€to€ðð766.3€of€the€EAR€if€a€settlement€is€not€reached;€and/orÐ 8ˆ ÐÌ(5)€€Refer€the€matter€to€the€Department€of€Justice€for€criminal€prosecution.Ð  p ÐÌ(e)€€òòCriteriaóó.€€Supplement€No.€2€to€part€766€describes€how€BIS€typically€exercises€its€discretionÐ  X Ðregarding€whether€to€pursue€an€administrative€enforcement€case€under€part€766€and€what€administrativeÐ ü!L Ðsanctions€to€seek€in€settling€such€a€case.Ð ð#@  ÐÌ(f)€€òòTreatment€of€unlawful€transactions€after€voluntary€self-disclosureóó.€€Any€person€taking€certain€actionsÐ Ø'(#$ Ðwith€knowl‚edge€that€a€violation€of€the€EAA€or€the€EAR€has€occurred€has€violated€ðð764.2(e)€of€thisÐ Ì)%& Ðpart.€€Any€person€who€has€made€a€voluntary€self-disclosure€knows€that€a€violation€may€have€occurred.€Ð À+'( ÐTherefore,€at€the€time€that€a€voluntary€self„disclosure€is€made,€the€person€making€the€disclosure€mayÐ ° Ðrequest€permission€from€BIS€to€engage€in€the€activities€described€in€ðð764.2(e)€of€this€part€€that€wouldÐ ¤ô Ðotherwise€be€prohibited.€€If€the€request€is€granted€by€Office€of€Exporter€Services€in€consultation€withÐ ˜è ÐOAC,€future€activities€with€respect€to€those€items€that€would€otherwise€violate€ðð764.2(e)€of€this€partÐ Œ Ü Ðwill€not€constitute€violations.€€However,€even€if€permission€is€granted,€the€person€making€the€voluntaryÐ € Ð Ðself„disclosure€is€not€absolved€from€liability€for€any€violations€disclosed.ò òó óÐ tÄ  ÐÌà  à3.€€The€authority€citation€for€part€766€continues€to€read€as€follows:Ð \¬  ÐÌà  àò òAuthority:ó ó€50€U.S.C.€app.€2401€òòet€seqóó.;€50€U.S.C.€1701€òòet€seqóó.;€€E.O.€13222,€66€FRÐ D” Ð44025,€3€CFR,€2001€Comp.,€p.€783;€Notice€of€August€2,€2005,€70€FR€45273€(August€5,€2005).€Ð 8ˆ ÐÌà  àò òPART€766€ð!ð€[AMENDED]ó óÐ  p ÐÌà  à4.€€In€ðð766.3,€paragraph€(a)€the€second€sentence€is€revised€to€read€as€follows:€€Ð  X ÐÌò òðð€766.3€Institution€of€administrative€enforcement€proceedings.ó óÐ ð#@  ÐÌòòà  àóó(a)€€òòCharging€lettersóó.€*€€*€€€*€€€Supplements€numbers€1€and€2€to€this€part€describe€how€BISÐ Ø'(#$ Ðtypically€exercises€its€discretion€regarding€the€issuance€of€charging€letters.€€€*€€€*€€€*€€€*€€€*€€Ð Ì)%& ÐÐ À+'( Ðà  à5.€€In€ðð€766.18€paragraph€(f)€is€revised€to€read€as€follows:Ð ° ÐÌò òðð€766.18€Settlement.ó óÐ ˜è ÐÌÔ‡Xk}XXXk}Ôà  àà ` àà ¸ àà  à*€€€*€€€*€€€*€€€*Ô#†Xk}XXXk}åÎ#ÔÔ‡Xk}XXXk}ÔÐ € Ð ÐÌà  à(f)€Ô#†Xk}XXXk}hÏ#ÔÔ‡Xk}XXXk}ÔSupplements€Numbers€1€and€2€to€this€part€describe€how€BIS€typically€exercises€itsÐ h¸  Ðdiscretion€regarding€the€terms€under€which€it€is€willing€to€settle€particular€cases.Ð \¬  ÐÌÌà  à6.€€Add€a€€Supplement€No.€2€to€part€766€to€read€as€follows:Ð 8ˆ ÐÔ#†Xk}XXXk}ÐÏ#Ôò òó óÌÌÌò òSupplement€No.€2€to€Part€766€ð!ð€Guidance€on€Charging€and€Penalty€Determinations€inÐ  X ÐSettlement€of€Administrative€Enforcement€Cases€Involving€Antiboycott€Mattersó óà Ð àÐ ü!L ÐÌ(a)€€€òòIntroductionóó.€€Ð ä%4!" ÐÌà  à(1)€òòScopeóó.€€This€Supplement€describes€how€the€Office€of€Antiboycott€Compliance€responds€toÐ Ì)%& Ðviolations€of€Ôg ÔpÔf  ÔÔg Ôart€760€of€the€EAR€ð ðRestrictive€Trade€Practices€or€Boycottsðð€and€to€violations€of€Ôg ÔpÔf  ÔÔg ÔartÐ À+'( Ð762€ð ðRecordkeepingðð€when€the€recordkeeping€requirement€pertains€to€Ôf  ÔÔg ÔpÔf  ÔÔg Ôart€760€€(together€referred€toÐ ° Ðin€this€supplement€as€the€ð ðantiboycott€provisionsðð).€€It€also€describes€how€OAC€makes€penaltyÐ ¤ô Ðdeterminations€in€the€settlement€of€administrative€enforcement€cases€brought€under€parts€764€and€766Ð ˜è Ðof€the€EAR€involving€violations€of€the€antiboycott€provisions.€€This€supplement€does€not€apply€toÐ Œ Ü Ðenforcement€cases€for€violations€of€other€provisions€of€the€EAR.Ð € Ð ÐÌà  à(2)€òòPolicy€Regarding€Settlementóó.€€Because€many€administrative€enforcement€cases€are€resolvedÐ h¸  Ðthrough€settlement,€the€process€of€settling€such€cases€is€integral€to€the€enforcement€program.€€OACÐ \¬  Ðcarefully€considers€each€settlement€offer€in€light€of€the€facts€and€circumstances€of€the€case,€relevantÐ P  Ðprecedent,€and€OACððs€objective€to€achieve€in€each€case€an€appropriate€level€of€penalty€and€deterrentÐ D” Ðeffect.€€In€settlement€negotiations,€OAC€encourages€parties€to€provide,€and€will€give€seriousÐ 8ˆ Ðconsideration€to,€information€and€evidence€that€the€parties€believe€is€relevant€to€the€application€of€thisÐ ,| Ðguidance€to€their€cases,€to€whether€a€violation€has€in€fact€occurred,€and€to€whether€they€have€a€defenseÐ  p Ðto€potential€charges.€€Ð d ÐÌà  à(3)€òòLimitationóó.€€OACððs€policy€and€practice€is€to€treat€similarly€situated€cases€similarly,€takingÐ ü!L Ðinto€consideration€that€the€facts€and€combination€of€mitigating€and€aggravating€factors€are€different€inÐ ð#@  Ðeach€case.€€However,€this€guidance€does€not€confer€any€right€or€impose€any€obligation€regarding€whatÐ ä%4!" Ðpenalties€BIS€may€seek€in€litigating€a€case€or€what€posture€OAC€may€take€toward€settling€a€case.€Ð Ø'(#$ ÐParties€do€not€have€a€right€to€a€settlement€offer,€or€particular€settlement€terms,€from€OAC,€regardless€ofÐ Ì)%& Ðsettlement€postures€OAC€has€taken€in€other€cases.Ð À+'( Ї(b)€òòResponding€to€Violationsóó.€OAC€within€BIS€investigates€possible€violations€of€Section€8€of€theÐ ° ÐExport€Administration€Act€of€1979,€as€amended€(Ôf  ÔÔg Ôð ðForeign€BoycottsððÔg Ô)Ôf  ÔÔg Ô,€the€antiboycott€provisions€ofÐ ¤ô ÐEAR,€or€any€order€or€authorization€related€thereto.€€When€OAC€has€reason€to€believe€that€such€aÐ ˜è Ðviolation€has€occurred,€OAC€may€issue€a€warning€letter€or€initiate€an€administrative€enforcementÐ Œ Ü Ðproceeding.€€A€violation€may€also€be€referred€to€the€Department€of€Justice€for€criminal€prosecution.€Ð € Ð ÐÌà  à(1)€€òòIssuing€a€warning€letteróó.€€Warning€letters€represent€OACððs€belief€that€a€violation€hasÐ h¸  Ðoccurred.€€In€the€exercise€of€its€discretion,€OAC€may€determine€in€certain€instances€that€issuing€aÐ \¬  Ðwarning€letter,€instead€of€bringing€an€administrative€enforcement€proceeding,€will€fulfill€the€appropriateÐ P  Ðenforcement€objective.€€A€warning€letter€will€fully€explain€the€violation.€Ôg ÔÐ D” ÐÌà  àà ` à(i)€OAC€often€issues€warning€letters€where:Ð ,| ÐÌà  àà ` àà ¸ à(A)€the€investigation€commenced€as€a€result€of€a€voluntary€self„disclosureÐ d Ðsatisfying€the€requirements€of€ðð€764.8€of€the€EAR;€orÐ  X ÐÌà  àà ` àà ¸ à(B)€the€party€has€not€previously€committed€violations€of€the€antiboycottÐ ð#@  Ðprovisions.€€€Ð ä%4!" ÐÌà  àà ` à(ii)€€€OAC€may€also€consider€the€category€of€violation€as€discussed€in€paragraph€(d)(2)Ð Ì)%& Ðof€this€supplement€in€determining€whether€to€issue€a€warning€letter€or€initiate€an€enforcementÐ À+'( Ðproceeding.€€A€violation€covered€by€Category€Ôg ÔCÔf  ÔÔg Ô€(failure€to€report€or€late€reporting€of€receipt€of€boycottÐ ° Ðrequests)€might€warrant€a€warning€letter€rather€than€initiation€of€an€enforcement€proceeding.Ôg ÔÐ ¤ô Ðà  àÌà  àà ` à(iii)€OAC€will€not€issue€a€warning€letter€if€it€concludes,€based€on€available€information,Ð Œ Ü Ðthat€a€violation€did€not€occur.€Ð € Ð ÐÌà  àà ` à(iv)€€OAC€may€reopen€its€investigation€of€this€matter€should€it€receive€additionalÐ h¸  Ðevidence€or€if€it€appears€that€information€previously€provided€to€OAC€during€the€course€of€itsÐ \¬  Ðinvestigation€was€incorrect.Ð P  ÐÌà  à(2)€€òòPursuing€an€administrative€enforcement€caseóó.€€The€issuance€of€a€charging€letter€under€ððÐ 8ˆ Ð766.3€of€this€part€initiates€an€administrative€proceeding.€€Ð ,| ÐÌà  àà ` à(i)€€Charging€letters€may€be€issued€when€there€is€reason€to€believe€that€a€violation€hasÐ d Ðoccurred.€€Cases€may€be€settled€before€or€after€the€issuance€of€a€charging€letter.€€òòSeeóó€ðð€766.18€of€thisÐ  X Ðpart.Ð ü!L Ðà  àà ` à(ii)€Although€not€required€to€do€so€by€law,€OAC€may€send€a€proposed€charging€letterÐ ð#@  Ðto€a€party€to€inform€the€party€of€the€violations€that€BIS€has€reason€to€believe€occurred€and€how€OACÐ ä%4!" Ðexpects€that€those€violations€would€be€charged.€€Issuance€of€the€proposed€charging€letter€provides€anÐ Ø'(#$ Ðopportunity€for€the€party€and€OAC€to€consider€settlement€of€the€case€prior€to€the€initiation€of€formalÐ Ì)%& Ðenforcement€proceedings.Ð À+'( Їà  à(3)€€€òòReferring€for€criminal€prosecutionóó.€€In€appropriate€cases,€OAC€may€refer€a€case€to€theÐ ° ÐDepartment€of€Justice€for€criminal€prosecution,€in€addition€to€pursuing€an€administrative€enforcementÐ ¤ô Ðaction.Ð ˜è ÐÌ(c)€€òòTypes€of€administrative€sanctionsóó.€€Administrative€enforcement€cases€generally€are€settled€on€termsÐ € Ð Ðthat€include€one€or€more€of€three€administrative€sanctionsÔg Ô:Ôf  ÔÔg ÔÐ tÄ  ÐÌà  à(1)€A€monetary€penalty€may€be€assessed€for€each€violation.€€The€maximum€such€penalty€isÐ \¬  Ðstated€in€ðð€764.3(a)(1)€of€the€EAR,€and€is€subject€to€adjustments€under€the€Federal€Civil€PenaltiesÐ P  ÐAdjustment€Act€of€1990€(28€USC€2461,€note€(2000)),€which€are€codified€at€15€CFR€ðð€6.4;Ð D” ÐÌà  à(2)€An€order€denying€a€partyððs€export€privileges€may€be€issued,€under€ðð€764.3(a)(2)€of€theÐ ,| ÐEAR;€or€Ð  p ÐÌà  à(3)€Exclusion€from€practice€under€ðð€764.3(a)(3)€of€the€EAR.Ð  X ÐÌ(d)€€òòHow€BIS€determines€what€sanctions€are€appropriate€in€a€settlementóó.€€Ð ð#@  ÐÌà  à(1)€€òòGeneral€Factorsóó.€€OAC€looks€to€the€following€general€factors€in€determining€whatÐ Ø'(#$ Ðadministrative€sanctions€are€appropriate€in€each€settlement.Ð Ì)%& ÐÐ À+'( Ðà  àà ` à(i)€€òòDegree€of€seriousnessóó.€€In€order€to€violate€the€antiboycott€provisions€of€the€EAR,€aÐ ° ÐU.S.€person€does€not€need€to€have€actual€ð ðknowledgeðð€or€a€reason€to€know,€as€that€term€is€defined€inÐ ¤ô Ððð772.1€of€the€EAR,€of€relevant€U.S.€laws€and€€regulations.€€Typically,€in€cases€that€do€not€involveÐ ˜è Ðknowing€violations,€OAC€will€seek€a€settlement€for€payment€of€a€civil€penalty€(unless€the€matter€isÐ Œ Ü Ðresolved€with€a€warning€letter).€€However,€in€cases€involving€knowing€violations,€conscious€disregard€ofÐ € Ð Ðthe€antiboycott€provisions,€or€other€such€serious€violations€(òòe.góó.,€furnishing€prohibited€information€inÐ tÄ  Ðresponse€to€a€boycott€questionnaire€with€knowledge€that€such€furnishing€is€in€violation€of€the€EAR),Ð h¸  ÐOAC€is€more€likely€to€seek€a€denial€of€export€privileges€or€an€exclusion€from€practice,€and/or€a€greaterÐ \¬  Ðmonetary€penalty€as€OAC€considers€such€violations€particularly€egregious.Ð P  ÐÌà  àà ` à(ii)€€òòCategory€of€violationsóó.€€In€connection€with€its€activities€described€in€paragraphÐ 8ˆ Ð(a)(1)€of€this€supplement,€BIS€recognizes€three€categories€of€violations€under€the€antiboycott€provisionsÐ ,| Ðof€the€EAR.€€(òòSeeóó€ðð€760.2€,€ðð€760.4€and€ðð€760.5€of€the€EAR€for€examples€of€each€type€of€violationÐ  p Ðother€than€recordkeeping).€€These€categories€reflect€the€relative€seriousness€of€a€violation,€withÐ d ÐCategory€A€violations€typically€warranting€the€most€stringent€penalties,€including€up€to€the€maximumÐ  X Ðmonetary€penalty,€and/or€a€denial€order€and€exclusion€order.€€Through€providing€these€categories€in€thisÐ ü!L Ðpenalty€guidelines€notice,€BIS€hopes€to€give€parties€a€general€sense€of€how€it€views€the€seriousness€ofÐ ð#@  Ðvarious€violations.€€This€guidance,€however,€does€not€confer€any€right€or€impose€any€obligation€as€toÐ ä%4!" Ðwhat€penalties€BIS€may€impose€based€on€its€review€of€the€specific€facts€of€a€case.Ð Ø'(#$ ÐÌà  àà ` à(A)€The€category€A€violations€and€the€sections€of€the€EAR€that€set€forth€their€elementsÐ À+'( Ðare:Ð ° ÐÌà  àà ` àà ¸ à(òò1óó)€€Discriminating€against€U.S.€persons€on€the€basis€of€race,€religion,€sex,€orÐ ˜è Ðnational€origin€ð!ð€ðð€760.2(b);Ð Œ Ü Ðà  àà ` àà ¸ à(òò2óó)€€Refusing€to€do€business€or€agreeing€to€refuse€to€do€business€ð!ð€ðð€760.2(a);Ð € Ð Ðà  àà ` àà ¸ à(òò3óó)€€Furnishing€information€about€race,€religion,€sex,€or€national€origin€of€U.S.Ð tÄ  Ðpersons€including,€but€not€limited€to,€providing€information€in€connection€with€a€boycott€questionnaireÐ h¸  Ðabout€the€religion€of€employees€ð!ð€ðð€760.2(c);Ð \¬  ÐÓ€ (/Õy3Óà  àà ` àà ¸ à(òò4óó)€€Evading€the€provisions€of€part€760€ð!ð€ðð€760.4;Ð P  Ðà  àà ` àà ¸ à(òò5óó)€€Furnishing€information€about€business€relationships€with€boycottedÐ D” Ðcountries€or€blacklisted€persons€ð!ð€ðð€760.2(d);€and€Ð 8ˆ Ðà  àà ` àà ¸ à(òò6óó)€€Implementing€letters€of€credit€ð!ð€ðð€760.2(f)€Ð ,| ÐÌÌà  àà ` à(B)€The€category€B€violations€and€the€provisions€of€the€EAR€that€set€forth€theirÐ  X Ðelements€are:Ð ü!L Ðà  àÌà  àà ` àà ¸ à(òò1óó)€€Furnishing€information€about€associations€with€charitable€or€fraternalÐ ä%4!" Ðorganizations€which€support€a€boycotted€country€ð!ð€ðð€760.2(e)ò òó ó;€and€Ð Ø'(#$ Ðà  àà ` àà ¸ à(òò2óó)€€Making€recordkeeping€violations€ð!ð€part€762.€Ð Ì)%& ÐÐ À+'( Ðà  àà ` à(C)€€€The€category€C€violation€and€the€section€of€the€EAR€that€sets€forth€its€elements€is€Ð ° Ðð!ð€Failing€to€report€timely€receipt€of€boycott€requests€ð!ð€ðð€760.5à p àò òÐ ¤ô ÐÔf  Ôó óÔg ÔÌà  àà ` à(iii)€€òòViolations€arising€out€of€related€transactionsóó.€€Frequently,€a€single€transaction€canÐ Œ Ü Ðgive€rise€to€multiple€violations.€€Depending€on€the€facts€and€circumstances,€OAC€may€choose€to€imposeÐ € Ð Ða€smaller€or€greater€penalty€per€violation.€€In€exercising€its€discretion,€OAC€typically€looks€to€factorsÐ tÄ  Ðsuch€as€whether€the€violations€resulted€from€conscious€disregard€Ôf  ÔÔg ÔofÔf  ÔÔg Ô€the€requirements€of€the€antiboycottÐ h¸  Ðprovisions;€whether€they€stemmed€from€the€same€underlying€error€or€omission;€and€whether€theyÐ \¬  Ðresulted€in€distinguishable€or€separate€harm.€€The€three€scenarios€set€forth€below€are€illustrative€of€howÐ P  ÐOAC€might€view€transactions€that€lead€to€multiple€violations.€€Ð D” ÐÌà  àà ` àà ¸ à(A)€òòFirst€scenarioóó.€€An€exporter€enters€into€a€sales€agreement€with€a€companyÐ ,| Ðin€a€boycotting€country.€€In€the€course€of€the€negotiations,€the€company€sends€the€exporter€a€request€forÐ  p Ða€signed€statement€certifying€that€the€goods€to€be€supplied€do€not€originate€in€a€boycotted€country.€€TheÐ d Ðexporter€provides€the€signed€certification.€€Subsequently,€the€supplier€fails€to€report€the€receipt€of€theÐ  X Ðrequest.€€The€supplier€has€committed€two€violations€of€the€antiboycott€provisions,€first,€a€violation€of€ððÐ ü!L Ð760.2(d)€for€furnishing€information€concerning€the€past€or€present€business€relationships€with€or€in€aÐ ð#@  Ðboycotted€country,€and€second,€a€violation€of€ðð€760.5€for€failure€to€report€the€receipt€of€a€request€toÐ ä%4!" Ðengage€in€a€restrictive€trade€practice€or€boycott.€€Although€the€supplier€has€committed€two€violations,Ð Ø'(#$ ÐOAC€may€impose€a€smaller€mitigated€penalty€on€a€per€violation€basis€than€if€the€violations€had€stemmedÐ Ì)%& Ðfrom€two€separate€transactions.€€Ð À+'( Їà  àà ` àà ¸ à(B)€òòSecond€scenarioóó.€€An€exporter€receives€a€boycott€request€to€provide€aÐ ° Ðstatement€that€the€goods€at€issue€in€a€sales€transaction€do€not€contain€raw€materials€from€a€boycottedÐ ¤ô Ðcountry€and€to€include€the€signed€statement€along€with€the€invoice.€€The€goods€are€shipped€in€tenÐ ˜è Ðseparate€shipments.€€Each€shipment€includes€a€copy€of€the€invoice€and€a€copy€of€the€signed€boycott„Ð Œ Ü Ðrelated€statement.€€Each€signed€statement€is€a€certification€that€has€been€furnished€in€violation€of€ððÐ € Ð Ð760.2(d)ððs€bar€on€the€furnishing€of€prohibited€business€information.€€Technically,€the€exporter€hasÐ tÄ  Ðcommitted€ten€separate€violations€of€ðð€760.2(d)€and€one€violation€of€ðð€760.5€for€failure€to€reportÐ h¸  Ðreceipt€of€the€boycott€request.€€Given€that€the€violations€arose€from€a€single€boycott€request,€however,Ð \¬  ÐOAC€may€treat€the€violations€as€related€and€impose€a€smaller€penalty€than€it€would€if€the€furnishing€hadÐ P  Ðstemmed€from€ten€separate€requests.€€Ð D” ÐÌà  àà ` àà ¸ à(C)€€òòThird€scenarioóó.€€An€exporter€has€an€ongoing€relationship€with€a€company€inÐ ,| Ða€boycotting€country.€€The€company€places€three€separate€orders€for€goods€on€different€dates€with€theÐ  p Ðexporter.€€In€connection€with€each€order,€the€company€requests€the€exporter€to€provide€a€signedÐ d Ðstatement€certifying€that€the€goods€to€be€supplied€do€not€originate€in€a€boycotted€country.€€The€exporterÐ  X Ðprovides€a€signed€certification€with€each€order€of€goods€that€it€ships€to€the€company.€€OAC€has€theÐ ü!L Ðdiscretion€to€penalize€the€furnishing€of€each€of€these€three€items€of€information€as€a€separate€violation€ofÐ ð#@  Ððð€760.2(d)€of€the€EAR€for€furnishing€information€concerning€past€or€present€business€relationships€withÐ ä%4!" Ðor€in€a€boycotted€country.ò òó óÐ Ø'(#$ ЀÌà  àà ` à(iv)€€òòMultiple€violations€from€unrelated€transactionsóó.€€In€cases€involving€multipleÐ À+'( Ðunrelated€violations,€OAC€is€more€likely€to€seek€a€denial€of€export€privileges,€an€exclusion€fromÐ ° Ðpractice,€and/or€a€greater€monetary€penalty€than€in€cases€involving€isolated€incidents.€€For€example,€theÐ ¤ô Ðrepeated€furnishing€of€prohibited€boycottð!ðrelated€information€about€business€relationships€with€or€inÐ ˜è Ðboycotted€countries€during€a€long€period€of€time€could€warrant€a€denial€order,€even€if€a€single€instanceÐ Œ Ü Ðof€furnishing€such€information€might€warrant€only€a€monetary€penalty.€€OAC€takes€this€approachÐ € Ð Ðbecause€multiple€violations€may€indicate€serious€compliance€problems€and€a€resulting€risk€of€futureÐ tÄ  Ðviolations.€€OAC€may€consider€whether€a€party€has€taken€effective€steps€to€address€complianceÐ h¸  Ðconcerns€in€determining€whether€multiple€violations€warrant€a€denial€or€exclusion€order€in€a€particularÐ \¬  Ðcase.Ð P  ÐÌà  àà ` à(v)€€òòTiming€of€settlementóó.€€Under€ðð€766.18€of€this€part,€settlement€can€occur€before€aÐ 8ˆ Ðcharging€letter€is€served,€while€a€case€is€before€an€administrative€law€judge,€or€while€a€case€is€before€theÐ ,| ÐUnder€Secretary€for€Industry€and€Security€under€ðð€766.22€of€this€part.€€However,€early€settlementð!ðforÐ  p Ðexample,€before€a€charging€letter€has€been€servedð!ðhas€the€benefit€of€freeing€resources€for€OAC€toÐ d Ðdeploy€in€other€matters.€€In€contrast,€for€example,€the€OAC€resources€saved€by€settlement€on€the€eveÐ  X Ðof€an€adversary€hearing€under€ðð€766.13€of€this€part€are€fewer,€insofar€as€OAC€has€already€expendedÐ ü!L Ðsignificant€resources€on€discovery,€motions€practice,€and€trial€preparation.€€Given€the€importance€ofÐ ð#@  Ðallocating€OAC€resources€to€maximize€enforcement€of€the€EAR,€OAC€has€an€interest€in€encouragingÐ ä%4!" Ðearly€settlement€and€will€take€this€interest€into€account€in€determining€settlement€terms.Ð Ø'(#$ ÐÌà  àà ` à(vi)€€òòRelated€criminal€or€civil€violationsóó.€€Where€an€administrative€enforcement€matterÐ À+'( Ðunder€the€antiboycott€provisions€involves€conduct€giving€rise€to€related€criminal€charges,€OAC€may€takeÐ ° Ðinto€account€the€related€violations,€and€their€resolution,€in€determining€what€administrative€sanctions€areÐ ¤ô Ðappropriate€under€part€766€of€the€EAR.€€A€criminal€conviction€indicates€serious,€willful€misconduct€andÐ ˜è Ðan€accordingly€high€risk€of€future€violations,€absent€effective€administrative€sanctions.€€However,€entryÐ Œ Ü Ðof€a€guilty€plea€can€be€a€sign€that€a€party€accepts€responsibility€for€complying€with€the€antiboycottÐ € Ð Ðprovisions€and€will€take€greater€care€to€do€so€in€the€future.€€In€appropriate€cases€where€a€party€isÐ tÄ  Ðreceiving€substantial€criminal€penalties,€OAC€may€find€that€sufficient€deterrence€may€be€achieved€byÐ h¸  Ðlesser€administrative€sanctions€than€would€be€appropriate€in€the€absence€of€criminal€penalties.€Ð \¬  ÐConversely,€OAC€might€seek€greater€administrative€sanctions€in€an€otherwise€similar€case€where€aÐ P  Ðparty€is€not€subjected€to€criminal€penalties.€€The€presence€of€a€related€criminal€or€civil€disposition€mayÐ D” Ðdistinguish€settlements€among€civil€penalty€cases€that€appear€to€be€otherwise€similar.€€As€a€result,€theÐ 8ˆ Ðfactors€set€forth€for€consideration€in€civil€penalty€settlements€will€often€be€applied€differently€in€theÐ ,| Ðcontext€of€a€ð ðglobal€settlementðð€of€both€civil€and€criminal€cases,€or€multiple€civil€cases€involving€otherÐ  p Ðagencies,€and€may€therefore€be€of€limited€utility€as€precedent€for€future€cases,€particularly€those€notÐ d Ðinvolving€a€global€settlement.Ð  X ÐÌà  àà ` à(vi)€€òòFamiliarity€with€the€Antiboycott€Provisionsóó.€€Given€the€scope€and€detailed€nature€ofÐ ð#@  Ðthe€antiboycott€provisions,€OAC€will€consider€whether€a€party€is€an€experienced€participant€in€theÐ ä%4!" Ðinternational€business€arena€who€may€possess€(or€ought€to€possess)€familiarity€with€the€antiboycottÐ Ø'(#$ Ðlaws.€€In€this€respect,€the€size€of€the€partyððs€business,€the€presence€or€absence€of€a€legal€division€orÐ Ì)%& Ðcorporate€compliance€program,€and€the€extent€of€prior€involvement€in€business€with€or€in€boycotted€Ôf  ÔÔg ÔorÔf  ÔÔg ÔÐ À+'( Ðboycotting€countries,€may€be€significant.Ð ° ÐÌà  à(2)€€òòSpecific€mitigating€and€aggravating€factorsóó.€€€In€addition€to€the€general€factors€described€inÐ ˜è Ðparagraph€(d)(1)€of€this€supplement,€OAC€also€generally€looks€to€the€presence€or€absence€of€theÐ Œ Ü Ðspecific€mitigating€and€aggravating€factors€in€this€paragraph€in€determining€what€sanctions€should€applyÐ € Ð Ðin€a€given€settlement.€€These€factors€describe€circumstances€that,€in€BISððs€experience,€are€commonlyÐ tÄ  Ðrelevant€to€penalty€determinations€in€settled€cases.€€However,€this€listing€of€factors€is€not€exhaustive€and,Ð h¸  Ðin€particular€cases,€OAC€may€consider€other€factors€that€may€further€indicate€the€blameworthiness€of€aÐ \¬  Ðpartyððs€conduct,€the€actual€or€potential€harm€associated€with€a€violation,€the€likelihood€of€futureÐ P  Ðviolations,€and/or€other€considerations€relevant€to€determining€what€sanctions€are€appropriate.ò òó ó€€TheÐ D” Ðassignment€of€mitigating€or€aggravating€factors€will€depend€upon€the€attendant€circumstances€of€theÐ 8ˆ Ðpartyððs€conduct.€€Thus,€for€example,€one€prior€violation€should€be€given€less€weight€than€a€history€ofÐ ,| Ðmultiple€violations,€and€a€previous€violation€reported€in€a€voluntary€self„disclosure€by€a€party€whoseÐ  p Ðoverall€compliance€efforts€are€of€high€quality€should€be€given€less€weight€than€previous€violation(s)€notÐ d Ðinvolving€such€mitigating€factors.€€Some€of€the€mitigating€factors€listed€in€this€paragraph€are€designatedÐ  X Ðas€having€ð ðgreat€weight.ðð€€When€present,€such€a€factor€should€ordinarily€be€given€considerably€moreÐ ü!L Ðweight€than€a€factor€that€is€not€so€designated.€€Ð ð#@  ÐÌà  àà ` à(i)€òòMitigating€factorsóó.€€Ð Ø'(#$ ÐÌà  àà ` à(A)€€òòVoluntary€self„disclosureóó.€(GREAT€WEIGHT)€The€party€has€made€a€voluntaryÐ À+'( Ðself„disclosure€of€the€violation,€satisfying€the€requirements€of€ðð€764.8€of€the€EAR.€òòÐ ° ÐóóÌà  àà ` à(B)€€òòEffective€compliance€programóó€(GREAT€WEIGHT)Ð ˜è ÐÌà  àà ` àà ¸ à(1)€òòGeneral€policy€or€program€pertaining€to€Antiboycott€Provisionsóó.€€In€the€caseÐ € Ð Ðof€a€party€that€has€done€previous€business€with€or€in€boycotted€countries€or€boycotting€countries,€theÐ tÄ  Ðparty€has€an€effective€antiboycott€compliance€program€and€its€overall€antiboycott€compliance€effortsÐ h¸  Ðhave€been€of€high€quality.€€The€focus€is€on€the€partyððs€demonstrated€compliance€with€the€antiboycottÐ \¬  ÐprovisionsÔf  ÔÔg Ô.€€WÔf  ÔÔg Ôhether€a€party€has€an€effective€export€compliance€program€covering€other€provisions€ofÐ P  Ðthe€EAR€is€not€relevant€as€a€mitigating€factor.€€OAC€may€deem€it€appropriate€to€review€the€partyððsÐ D” Ðinternal€business€documents€relating€to€antiboycott€compliance€(òòe.góó.,€corporate€compliance€manuals,Ð 8ˆ Ðemployee€training€materials).€€In€this€context,€OAC€will€also€consider€whether€a€partyððs€antiboycottÐ ,| Ðcompliance€program€uncovered€a€problem,€thereby€preventing€further€violationsÔf  ÔÔg Ô,€and€whether€the€partyÐ  p Ðhas€taken€steps€to€address€compliance€concerns€raised€by€the€violation,€including€steps€to€preventÐ d Ðrecurrence€of€the€violation,€that€are€reasonably€calculated€to€be€effectiveÔf  ÔÔg Ô.€€Ð  X ÐÌà  àà ` àà ¸ à(2)€òòCompliance€with€reporting€and€recordkeeping€requirementsóó.€€In€the€case€ofÐ ð#@  Ða€party€that€has€received€reportable€boycott€requests€in€the€past,€OAC€may€examine€whether€the€partyÐ ä%4!" Ðcomplied€with€the€reporting€and€recordkeeping€requirements€of€the€antiboycott€provisions.€With€respectÐ Ø'(#$ Ðto€recordkeeping,€Ôf  ÔÔg Ôwhether€records€were€destroyed€deliberately€or€intentionally€Ôg ÔmayÔf  ÔÔg Ô€be€an€issue.Ð Ì)%& Ðò òó óÐ À+'( Ðà  àà ` à(C)€òòLimited€business€with€or€in€boycotted€or€boycotting€countriesóó.€€The€party€has€hadÐ ° Ðlittle€to€no€previous€experience€in€conducting€business€with€or€in€boycotted€Ôg ÔorÔf  ÔÔg Ô€boycotting€countries.€Ð ¤ô ÐPrior€to€the€current€enforcement€proceeding,€the€party€had€not€engaged€in€business€with€or€in€suchÐ ˜è Ðcountries,€or€had€only€transacted€such€business€on€isolated€occasions.€€OAC€may€examine€the€volumeÐ Œ Ü Ðof€business€that€the€party€has€conducted€with€or€in€boycotted€Ôg ÔorÔf  ÔÔg Ô€boycotting€countries€as€demonstratedÐ € Ð Ðby€the€size€and€dollar€amount€of€transactions€or€the€percentage€of€a€partyððs€overall€business€that€suchÐ tÄ  Ðbusiness€constitutes.€€€Ð h¸  ÐÌà  àà ` à(D)€€òòHistory€of€compliance€with€the€Antiboycott€Provisions€of€the€EAR€and€export„Ð P  Ðrelated€laws€and€regulationsóó.€€Ð D” ÐÌà  àà ` à(òò1óó)€OAC€will€consider€it€to€be€a€mitigating€factor€if:€€€Ð ,| ÐÌà  àà ` à(òòióó)€The€party€has€never€been€convicted€of€a€criminal€violation€of€the€antiboycottÐ d Ðprovisions;Ð  X Ðà  àà ` à(òòiióó)€in€the€past€5€years,€the€party€has€never€entered€into€a€settlement€or€been€found€liableÐ ü!L Ðin€a€boycott„related€administrative€enforcement€case€with€BIS€or€another€U.S.€government€agency;Ð ð#@  Ðà  àà ` à(òòiiióó)€in€the€past€3€years,€the€party€has€not€received€a€warning€letter€from€BIS;€orÐ ä%4!" Ðà  àà ` à(òòivóó)€in€the€past€5€years,€the€party€has€never€otherwise€violated€the€antiboycottÐ Ø'(#$ Ðprovisions.à ` àÐ Ì)%& Ðò òó óÐ À+'( Їà  àà ` à(òò2óó)€€Where€necessary€to€ensure€effective€enforcement,€the€prior€involvement€inÐ ° Ðviolations€of€the€antiboycott€provisions€of€a€partyððs€owners,€directors,€officers,€partners,€or€other€relatedÐ ¤ô Ðpersons€may€be€imputed€to€a€party€in€determining€whether€these€criteria€are€satisfied.€€òòóóÐ ˜è ÐÌà  àà ` à(òò3óó)€€When€an€acquiring€firm€takes€reasonable€steps€to€òòuncoveróó,€òòcorrectóó,€and€òòdiscloseóó€toÐ € Ð ÐOAC€conduct€that€gave€rise€to€violations€that€the€acquired€business€committed€òòbeforeóó€the€acquisition,Ð tÄ  ÐOAC€typically€will€not€take€such€violations€into€account€in€applying€this€factor€in€settling€other€violationsÐ h¸  Ðby€the€acquiring€firm.Ð \¬  ÐÌà  à(E)€€òòExceptional€cooperation€with€the€investigationóó.€€The€party€has€provided€exceptionalÐ D” Ðcooperation€to€OAC€during€the€course€of€the€investigation.€€Ð 8ˆ ÐÌà  à(F)€€òòClarity€of€request€to€furnish€prohibited€information€or€take€prohibited€actionóó.€€The€partyÐ  p Ðresponded€to€a€request€to€furnish€information€or€take€action€that€was€ambiguously€worded€or€vague.ò òó óÐ d ÐÌà  à(G)€òòViolations€arising€out€of€a€partyððs€ð ðpassiveðð€refusal€to€do€business€in€connection€with€anÐ ü!L ÐagreementóóÐ ð#@  ÐThe€party€has€acquiesced€in€or€abided€by€terms€or€conditions€that€constitute€a€prohibited€refusal€to€doÐ ä%4!" Ðbusiness€(òòe.góó.,€responded€to€a€tender€document€that€contains€prohibited€language€by€sending€a€bid).€Ð Ø'(#$ ÐòòSeeóó€€ð ðactiveðð€agreements€to€refuse€to€do€business€in€paragraph€(d)(2)(ii)(I)€of€this€supplement.Ð Ì)%& ÐÐ À+'( Ðà  à(H)€òòIsolated€occurrence€of€violationóó.€€The€violation€was€an€isolated€occurrence.€€(Compare€toÐ ° Ðlong€duration€or€high€frequency€of€violations€as€an€aggravating€factor€in€paragraph€(d)(2)(ii)(F)€of€thisÐ ¤ô Ðsupplement.)Ð ˜è ÐÌ(ii)€òòSpecific€Aggravating€Factorsóó.€€Ð € Ð ÐÌà  à(A)€€òòConcealment€or€obstructionóó.€€The€party€made€a€deliberate€effort€to€hide€or€conceal€theÐ h¸  Ðviolation.€[GREAT€WEIGHT]Ð \¬  ÐÌà  à(B)€€òòSerious€disregard€for€compliance€responsibilitiesóó.€€[GREAT€WEIGHT]€€There€is€evidenceÐ D” Ðthat€the€partyððs€conduct€demonstrated€a€serious€disregard€for€responsibilities€associated€withÐ 8ˆ Ðcompliance€with€the€antiboycott€provisions€(òòe.góó.:€knowing€violation€of€partyððs€own€compliance€policy€orÐ ,| Ðevidence€that€a€party€chose€to€treat€potential€penalties€as€a€cost€of€doing€business€rather€than€develop€aÐ  p Ðcompliance€policy).ò òÐ d Ðó óÌà  à(C)€€òòHistory€of€compliance€with€the€Antiboycott€Regulations€and€export„related€laws€andÐ ü!L Ðregulationsóó.€€Ð ð#@  ÐÌà  à(òò1óó)€OAC€will€consider€it€to€be€an€aggravating€factor€if:€€€Ð Ø'(#$ ÐÌà  àà ` à(òòióó)€The€party€has€been€convicted€of€a€criminal€violation€of€the€antiboycott€provisions;€Ð À+'( Ðà  àà ` à(òòiióó)€in€the€past€5€years,€the€party€has€entered€into€a€settlement€or€been€found€liable€in€aÐ ° Ðboycott„related€administrative€enforcement€case€with€BIS€or€another€U.S.€government€agency;€Ð ¤ô Ðà  àà ` à(iii)€in€the€past€3€years,€the€party€has€received€a€warning€letter€from€OAC;€orÐ ˜è Ðà  àà ` à(òòvóó)€in€the€past€5€years,€the€party€has€otherwise€violated€the€antiboycott€provisions.€€Ð Œ Ü ÐÌà  à(òò2óó)€€Where€necessary€to€ensure€effective€enforcement,€the€prior€involvement€in€violations€of€theÐ tÄ  Ðantiboycott€provisions€of€a€partyððs€owners,€directors,€officers,€partners,€or€other€related€persons€mayÐ h¸  Ðbe€imputed€to€a€party€in€determining€whether€these€criteria€are€satisfied.€€Ð \¬  ÐÌà  à(òò3óó)€€When€an€acquiring€firm€takes€reasonable€steps€to€òòuncoveróó,€òòcorrectóó,€and€òòdiscloseóó€to€OACÐ D” Ðconduct€that€gave€rise€to€violations€that€the€acquired€business€committed€òòbeforeóó€the€acquisition,€OACÐ 8ˆ Ðtypically€will€not€take€such€violations€into€account€in€applying€this€factor€in€settling€other€violations€by€theÐ ,| Ðacquiring€firm.Ð  p ÐÌà  à(D)€€òòFamiliarity€with€the€type€of€transaction€at€issue€in€the€violationóó.€€For€example,€in€the€case€ofÐ  X Ða€violation€involving€a€letter€of€credit€or€related€financial€document,€the€party€routinely€pays,€negotiates,Ð ü!L Ðconfirms,€or€otherwise€implements€letters€of€credits€or€related€financial€documents€in€the€course€of€itsÐ ð#@  Ðstandard€business€practices.ò òó óÐ ä%4!" ÐÌà  à(E)€òòPrior€history€of€business€with€or€in€boycotted€countries€or€boycotting€countriesóó.€€The€partyÐ Ì)%& Ðhas€a€prior€history€of€conducting€business€with€or€in€boycotted€and€boycotting€countries.€€OAC€mayÐ À+'( Ðexamine€the€volume€of€business€that€the€party€has€conducted€with€or€in€boycotted€and€boycottingÐ ° Ðcountries€as€reflected€by€the€size€and€dollar€amount€of€transactions€or€the€percentage€of€a€partyððsÐ ¤ô Ðoverall€business€that€such€business€constitutes.€Ð ˜è ÐÌà  à(F)€òòLong€duration/€high€frequency€of€violationsóó.€€Violations€that€occur€at€frequent€intervals€orÐ € Ð Ðrepeated€violations€occurring€over€an€extended€period€of€time€may€be€treated€more€seriously€than€aÐ tÄ  Ðsingle€isolated€violation€that€is€committed€within€a€brief€period€of€time,€particularly€if€the€violations€areÐ h¸  Ðcommitted€by€a€party€with€a€history€of€business€with€or€in€boycotted€and€boycotting€countries.Ð \¬  Ð(Compare€to€isolated€occurrence€of€violation€or€good„faith€misinterpretation€in€paragraph€€(d)(2)(i)(H)Ð P  Ðof€this€supplement.)Ð D” ÐÌà  à(G)€€òòClarity€of€request€to€furnish€prohibited€information€or€take€prohibited€actionóó.€€The€requestÐ ,| Ðto€furnish€information€or€take€other€prohibited€action€(òòe.góó.,€enter€into€agreement€to€refuse€to€do€businessÐ  p Ðwith€a€boycotted€country€or€entity€blacklisted€by€a€boycotting€country)€is€facially€clear€as€to€its€intendedÐ d Ðpurpose.Ð  X ÐÌà  à(H)€€òòViolation€relating€to€specific€information€concerning€an€individual€entity€or€individualóó.€€TheÐ ð#@  Ðparty€has€furnished€prohibited€information€about€business€relationships€with€specific€companies€orÐ ä%4!" Ðindividuals.Ð Ø'(#$ ÐÌà  à(I)€€òòViolations€relating€to€ð ðactiveðð€conduct€concerning€an€agreement€to€refuse€to€do€businessóó.€Ð À+'( ÐThe€party€has€taken€action€that€involves€altering,€editing,€or€enhancing€prohibited€terms€or€language€inÐ ° Ðan€agreement€to€refuse€to€do€business,€including€a€letter€of€credit,€or€drafting€a€clause€or€provisionÐ ¤ô Ðincluding€prohibited€terms€or€language€in€the€course€of€negotiating€an€agreement€to€refuse€to€doÐ ˜è Ðbusiness,€including€a€letter€of€credit.€€òòSeeóó€ð ðpassiveðð€agreements€to€refuse€to€do€business€in€paragraphÐ Œ Ü Ð(d)(2)(ii)(G)€of€this€supplement.Ð € Ð ÐÌ(e)€€€òòDetermination€of€Scope€of€Denial€or€Exclusion€Orderóó.€€In€deciding€whether€and€what€scope€ofÐ h¸  Ðdenial€or€exclusion€order€is€appropriate,€the€following€factors€are€particularly€relevant:€the€presence€ofÐ \¬  Ðmitigating€or€aggravating€factors€of€great€weight;€the€degree€of€seriousness€involved;€in€a€businessÐ P  Ðcontext,€the€extent€to€which€senior€management€participated€in€or€was€aware€of€the€conduct€in€question;Ð D” Ðthe€number€of€violations;€the€existence€and€seriousness€of€prior€violations;€the€likelihood€of€futureÐ 8ˆ Ðviolations€(taking€into€account€relevant€efforts€to€comply€with€the€antiboycott€provisions);€and€whether€aÐ ,| Ðmonetary€penalty€can€be€expected€to€have€a€sufficient€deterrent€effect.Ð  p ÐÌ(f)€€òòHow€OAC€Makes€Suspension€and€Deferral€Decisionsóó.Ð  X ÐÌà  à(1)€òòCivil€Penaltiesóó.€€In€appropriate€cases,€payment€of€a€civil€monetary€penalty€may€be€deferredÐ ð#@  Ðor€suspended.€€òòSeeóó€ðð€764.3(a)(1)(iii)€of€the€EAR.€€In€determining€whether€suspension€or€deferral€isÐ ä%4!" Ðappropriate,€OAC€may€consider,€for€example,€whether€the€party€has€demonstrated€a€limited€ability€toÐ Ø'(#$ Ðpay€a€penalty€that€would€be€appropriate€for€such€violations,€so€that€suspended€or€deferred€payment€canÐ Ì)%& Ðbe€expected€to€have€sufficient€deterrent€value,€and€whether,€in€light€of€all€the€circumstances,€suchÐ À+'( Ðsuspension€or€deferral€is€necessary€to€make€the€impact€of€the€penalty€consistent€with€the€impact€ofÐ ° ÐOAC€penalties€on€other€parties€who€committed€similar€violations.€€Ð ¤ô ÐÌà  à(2)€òòDenial€of€Export€Privileges€and€Exclusion€from€Practiceóó.€€In€deciding€whether€a€denial€orÐ Œ Ü Ðexclusion€order€should€be€suspended,€OAC€may€consider,€for€example,€the€adverse€economicÐ € Ð Ðconsequences€of€the€order€on€the€party,€its€employees,€and€other€persons,€as€well€as€on€the€nationalÐ tÄ  Ðinterest€in€the€competitiveness€of€U.S.€businesses.€€An€otherwise€appropriate€denial€or€exclusion€orderÐ h¸  Ðwill€be€suspended€on€the€basis€of€adverse€economic€consequences€only€if€it€is€found€that€futureÐ \¬  Ðviolations€of€the€antiboycott€provisions€are€unlikely€and€if€there€are€adequate€measures€(usually€aÐ P  Ðsubstantial€civil€penalty)€to€achieve€the€necessary€deterrent€effect.€€Ð D” ÐÌÌÌDatedÐ d ÐÌÌÌÔf  ÔMatthew€SÔg ÔÔg Ô.€BormanÔf  ÔÔg ÔÐ ä%4!" ÐDeputy€Assistant€Secretary€Ôf  ÔÐ Ø'(#$ Ѐ€For€Export€AdministrationÔf  ÔÔg Ô