EAR Archives | Customs & International Trade Law Blog

Bosch Agrees to Pay $36 Million Penalty to BIS for Unauthorized Shipments to Huawei

Robert Bosch GmbH (Bosch), the German multinational engineering and technology company, has agreed to pay a $36,184,680 penalty to the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) for exporting controlled items to Huawei Technologies Co. and its affiliates without the required U.S. government authorization.

What Happened

Between September 2020 and September 2024, Bosch exported approximately $72.4 million worth of Micro-Electro-Mechanical Systems (MEMS) sensor products and automotive software from abroad to Huawei and its affiliates. The exported items were subject to the Export Administration Regulations (EAR) under the Foreign Direct Product Rule, a rule that extends U.S. export controls to certain foreign-produced items that incorporate U.S. technology or are manufactured using U.S. equipment. Because Huawei and its affiliates are listed on BIS’s Entity List, any shipment of items subject to the EAR requires a license from BIS. No such license or authorization was obtained.

The MEMS sensors at issue are widely used in consumer products, including smartphones, wearable technology, and automobiles.

The Penalty

In addition to the $36 million BIS civil penalty, Bosch separately agreed with the Department of Justice to disgorge profits from the transactions, with an actual payment of approximately $3.6 million. BIS suspended approximately $3.6 million of its penalty as credit for the disgorgement, bringing Bosch’s total financial exposure to roughly $39.8 million.

Bosch filed a Voluntary Self-Disclosure with […]

By Jennifer Diaz|2026-06-18T12:00:24-04:00June 18, 2026|EAR, Enforcement, Export, International Trade, U.S. Bureau of Industry and Security (BIS)|Comments Off

Reporting, Requestor List, Penalties: Antiboycott Laws Explained

The United States enforces antiboycott laws designed to address foreign government’s economic boycotts of countries friendly to the U.S. Antiboycott laws have been on the books since the 1970s and are primarily enforced by the U.S. Department of Commerce’s Bureau of Industry and Security.

What Are the U.S. Antiboycott Laws?

“Anti-boycott” refers to U.S. laws and regulations that discourage and, in certain cases, prohibit U.S. persons from participating in unsanctioned foreign boycotts, particularly those targeting countries friendly to the United States.

BIS is charged with administering and enforcing this policy under the Anti-Boycott Act of 2018, the Export Control Reform Act of 2018, and the Export Administration Regulations.

The antiboycott laws aim to prevent U.S. persons from advancing foreign policies of other nations that run counter to U.S. policy.

Prohibited Antiboycott Activities Under the EAR

Part 760 of the EAR specifies prohibited antiboycott activities including:

Refusals or agreements to refuse to do business with or in a boycotted country or with blacklisted companies.
Discrimination or agreements to discriminate against a U.S. person based on race, religion, sex, or national origin.
Furnishing information or agreements to furnish information about business relationships with or in a boycotted country or with blacklisted companies.
Furnishing information or agreements to furnish information about the race, religion, sex, or national origin of a U.S. person.
Implementation of letters of credit containing prohibited boycott terms or conditions.
Taking actions with the intent to evade Part 760 of the EAR.

Required Reporting

Section 760.5 of the EAR requires […]

By Jennifer Diaz|2025-04-07T18:47:13-04:00April 7, 2025|U.S. Department of Commerce (DOC)|Comments Off

BIS Releases New Edition of “Don’t Let This Happen to You”

The Department of Commerce’s Bureau of Industry and Security (BIS) published an updated version of Don’t Let This Happen to You!, a list of case examples highlighting BIS enforcement efforts including criminal cases.

Case highlights:

The publication highlights over 100 cases covering various violations of export control laws.

Military Controls

The owner of BQ Tree Consulting in Jacksonville, Florida, along with the President and Manager of the company were indicted for conspiring to illegally export military-grade combat rubber raiding craft (CCRC) to China.

The scheme involved providing a U.S. company with false end-use and end-user information for a front company in Hong Kong, which was used to complete the transaction ultimately destined for China. The intention was to reverse engineer the CRRC and engines to mass produce them for the Chinese People’s Liberation Army (PLA) Navy.

The company owner was sentenced to 16 months in prison, two years of supervised release, mandatory mental health screening, and a $200 special assessment. The company President was sentenced to 42 months confinement, three years of probation, a $50,000 criminal fine, and a $200 special assessment. The company manager was sentenced to 17 months in prison, one year of supervised release pending deportation, a prohibition on employment with any company that deals with the military, and a $100 special assessment.

National Security Controls

GlobalFoundries U.S. Inc., a semiconductor wafer manufacturing company headquartered in Malta New York violated the Export Administration Regulations (EAR) by sending 74 shipments of semiconductor wafers, valued at approximately $17.1 million, to SJ Semiconductor (SJS), a company […]

By Jennifer Diaz|2024-11-22T07:18:29-05:00November 22, 2024|EAR, Export, U.S. Bureau of Industry and Security (BIS), U.S. Department of Commerce (DOC)|Comments Off

BIS Issues Guidance to Financial Institutions on Best Practices for Compliance with the Export Administration Regulations

The Department of Commerce’s Bureau of Industry and Security (BIS) recently published guidance for financial institutions containing several recommendations for complying with the Export Administration Regulations (EAR).

The guidance provides recommendations on steps financial institutions can take to minimize the likelihood of EAR violations. The recommendations focus on three key areas: due diligence best practices, reviewing transactions for red flags, and real-time screening.

Due Diligence Best Practices

The guidance recommends that financial institutions incorporate EAR related due diligence into their compliance and risk management and compliance processes. Due diligence should be conducted both before onboarding a new customer and as part of regular due diligence thereafter.

Specifically, BIS recommends that financial institutions:

Review customers against lists of persons subject to BIS’s end-user restrictions
Review customers – and, where appropriate, customers’ customers – against lists of entities that have shipped Common High Priority List (CHPL) items to Russia since 2023
Ask a customer to certify that it has controls in place to comply with the EAR if the customer is engaged in the export, reexport or transfer of items subject to the EAR and is on a restricted-party list

Review Transactions for Red Flags

The guidance recommends that financial institutions review transactions on an ongoing basis for red flags:

Purchases under a letter of credit that are consigned to the issuing bank, not to the actual end user.
Transactions involving entities with little to no web presence, such as a website or a domain based email account.
A customer lacks or refuses to […]

By Jennifer Diaz|2024-10-11T15:13:06-04:00October 11, 2024|Export, U.S. Bureau of Industry and Security (BIS)|Comments Off

BIS Issues Final Rule on VSD Policies and Penalty Guidelines

BIS recently issued a final rule to amend the Export Administration Regulations (EAR), making several changes to their Voluntary Self Disclosure (VSD) policies, as well as updates to guidance on penalty determinations.

The rule codifies previously announced policy changes through several Policy Memoranda including an April 2023 memorandum on voluntary-self disclosures, and a June 2022 memorandum on strengthening administrative enforcement.

Revisions to Voluntary Self-Disclosures

The rule makes both substantive and procedural changes to the VSD policies:

Addition of non-disclosure as an aggravating factor – the new rule makes clear that BIS will consider a deliberate decision to not disclose a violation as an aggravated factor when determining what administrative sanctions will be imposed.
New dual track for processing VSDs – one track for minor or technical violations, the other for significant violations.
Authorizes any person (not just the party submitting a VSD) to notify the Director of BIS’s Office of Export Enforcement (OEE) that a violation has occurred and to request permission to engage in corrective activities.

Revisions to Penalty Guidelines

This rule makes several changes to the BIS Penalty Guidelines, including:

Changes the base penalty caps:
1. Non-egregious VSD cases: was $125,000, now one-half of the transaction value.
2. Non-egregious cases that are not initiated by a VSD: was $250,000, now the full transaction value.
Permits BIS to use non-monetary penalties to resolve cases that are not egregious and have not resulted in national security harm, but rise above the level of cases warranting a warning letter.
Removes from the BIS […]

By Jennifer Diaz|2024-09-26T15:59:58-04:00September 26, 2024|EAR, Export, U.S. Bureau of Industry and Security (BIS)|Comments Off

Significant Updates to BIS Enforcement Policies in 2022

Diaz Trade Law’s President, Jennifer Diaz, Associate Attorney Sharath Patil, are enthusiastic to announce Bloomberg Law published another one of our articles, “Significant Updates to BIS Enforcement Policies in 2022“! Below is the article reproduced with permission for your reading pleasure. You can read the article here (where you’ll have the ability to access all of the great hyperlinks). Please note you cannot click on the hyperlinks below.

We’d love to hear your feedback!

[…]

By Jennifer Diaz|2022-11-08T14:42:31-05:00November 8, 2022|Bloomberg, Bloomberg Export, China, Cuba, EAR, Export, International Trade, IRAN, People's Republic of China, Russia, Russian Harmful Foreign Activities Sanctions Regulations, U.S. Bureau of Industry and Security (BIS)|Comments Off

Building & Maintaining an Export Compliance Plan

Diaz Trade Law’s President, Jennifer Diaz, Associate Attorney Sharath Patil, are enthusiastic to announce Bloomberg Law published another one of our articles, “Building & Maintaining an Export Compliance Plan”! We also thank our law clerk, Gabi Perez, for her support with research for this article. Below is the article reproduced with permission for your reading pleasure. You can read the article here (where you’ll have the ability to access all of the great hyperlinks). Please note you cannot click on the hyperlinks below.

We’d love to hear your feedback!

[…]

By Jennifer Diaz|2022-11-10T15:44:12-05:00October 18, 2022|Bloomberg, Bloomberg Export, International Law, U.S. Bureau of Industry and Security (BIS), Uncategorized|Comments Off

Encryption Controls under the Export Administration Regulations

Encryption is generally defined as the process of converting information or data into a code, especially to prevent unauthorized access. Put simply, encryption makes a wide range of technologies more secure. Since 1996, most encrypted technology is controlled by the EAR. Some encrypted technology, which has military-related functionalities, is controlled by the International Traffic in Arms Regulations (“ITAR”). This article provides an overview of encryption controls under the EAR, outlines license exceptions for certain encrypted technologies, and provides best practices for export compliance.

Background on Export Administration Regulations

Over 95% of the world’s population is outside of the United States. Opportunities abound for U.S. companies that export. However, exporting is a privilege and not a right. U.S. exporters have an important responsibility to adhere to U.S. export control laws, including the Export Administration Regulations (“EAR”).

Administered by the U.S. Commerce Department, the EAR is a set of regulations which governs whether U.S. persons may export or transfer goods, software, and technology outside of the United States or to non-U.S. citizens. U.S. exporters have an important responsibility to adhere to the EAR. Violations of the EAR carry hefty civil and criminal penalties. Exporters can pay hundreds of thousands of dollars in penalties, lose export privileges, and even be imprisoned.

Encryption Controls

According to 15 CFR 742.15:

“Encryption items can be used to maintain the secrecy of information, and thereby may be used by persons abroad to harm U.S. national security, foreign policy and law enforcement interests. The United States has a critical interest in ensuring that […]

By Jennifer Diaz|2022-09-09T08:08:45-04:00August 24, 2022|EAR, EEI, Export, ITAR, U.S. Bureau of Industry and Security (BIS), U.S. Census Bureau, U.S. Department of Commerce (DOC), U.S. Department of State (DOS)|1 Comment

Customs and Trade Law Weekly Snapshot

Here is a recap of the latest customs and international trade law news:

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By Jennifer Diaz|2022-07-01T11:10:44-04:00March 4, 2022|Countries, EAR, Export, Import, International Law, International Trade, Snapshot, U.S. Bureau of Industry and Security (BIS), U.S. Customs and Border Protection (CBP), U.S. Office of Foreign Assets Control (OFAC), Uncategorized|Comments Off

Export Licensing Under EAR

Diaz Trade Law’s President, Jennifer Diaz, and Associate Attorney, Sharath Patil, are enthusiastic to announce Bloomberg Law published another one of our articles, “Export Licensing Under EAR“! Below is the article reproduced with permission for your reading pleasure. You can read the article here (where you’ll have the ability to access all of the great hyperlinks). Please note you cannot click on the hyperlinks below.