Responding to an Export Control Civil Investigative Demand (Administrative Subpoena)

Responding to an Export Control Civil Investigative Demand (Administrative Subpoena)

So your probably holding this administrative subpoena from DDTC or BIS about export violations and your entire defense business is about to be destroyed. Maybe you exported technical data without a license. Maybe someone accessed ITAR-controlled information who shouldn’t have. Or maybe your just caught up in there latest enforcement sweep. Look, we get it. Your ABSOLUTELY PETRIFIED. And you should be! Because export violations carry 20 YEARS in federal prison and $1 MILLION fines – PER VIOLATION!

What Makes Export Control Investigations So Terrifying?

Let me explain the national security nightmare your facing. BIS’s Office of Export Enforcement has FEDERAL AGENTS with guns, badges, and arrest authority! There the only federal law enforcement dedicated exclusively to export control!

DDTC and BIS don’t need warrants – they issue administrative subpoenas demanding everything! Your servers, emails, visitor logs, technical data, export records – ALL OF IT! Refuse to comply? Federal marshals arrest you for obstruction! We’ve seen executives handcuffed at there desks for not producing documents fast enough!

Here’s what’s really scary – civil violations don’t require intent! Didn’t know that email to a foreign national was an “export”? TOO BAD! Thought the fundamental research exception applied? WRONG! One accidental disclosure can trigger millions in penalties plus criminal prosecution!

How Devastating Are Export Control Penalties?

Sit down and prepare for numbers that will destroy everything you’ve built!

ITAR violations carry civil penalties up to $1.2 MILLION per violation or twice the transaction value – whichever is GREATER! Exported $10 million in defense articles? That’s $20 MILLION in penalties! Plus criminal fines up to $1 million! Plus 20 years prison!

EAR violations are equally crushing – $300,000 per violation or twice the value! But here’s the killer – EACH EXPORT is a separate violation! Sent 100 emails with technical data? That’s 100 violations = $30 MILLION in potential penalties! We’ve seen small manufacturers bankrupted by penalties for routine communications!

What About Criminal Prosecution for Export Violations?

ABSOLUTELY! And its happening MORE frequently! In 2017 alone, BIS got 31 criminal convictions with $287 million in fines and 576 months imprisonment!

The Arms Export Control Act makes willful violations FELONIES! Each unauthorized export, each false statement, each missing record is a separate count! Stack them up and executives face DECADES in prison! We’ve seen engineers imprisoned for sharing technical data at conferences!

Recent prosecutions are terrifying – executives debarred for LIFE from defense industry! Unable to work in there field ever again! One client’s son couldn’t get security clearance because dad had export violation 20 years earlier!

What Triggers Export Control Investigations?

Your probably wondering “How did they find out?” Let me tell you what destroys exporters:

Whistleblowers and competitors routinely report violations! That fired employee who knows about your exports? They’re calling DDTC! Competitor who lost a contract? Claiming you violated ITAR! Even routine customs inspections trigger investigations!

“Directed disclosures” are the worst – DDTC already knows about violations and demands you confess! Not truly voluntary so no mitigation credit! But if you don’t respond completely, they assume your hiding worse violations! We’ve seen companies forced to admit violations they didn’t even know existed!

What’s the Difference Between ITAR and EAR Violations?

Both can destroy you but in different ways! ITAR covers military items while EAR covers dual-use!

ITAR is STATE DEPARTMENT – stricter controls, higher penalties, automatic debarment for violations! ANY defense article, technical data, or defense service needs license! Even showing foreign person a blueprint in your own office is illegal export!

EAR is COMMERCE DEPARTMENT – broader scope, covers almost everything not ITAR! Laptops, software, chemicals – all controlled! “Deemed exports” to foreign nationals in US are violations! We had client prosecuted for letting Chinese engineer see source code on his own computer!

Can Export Violations Lead to Debarment?

YES! And its often PERMANENT! DDTC routinely debars violators from export privileges!

Statutory debarment is AUTOMATIC upon conviction – no exports, no imports, no defense contracts! Can’t even work for companies with export licenses! Your entire career in defense/aerospace DESTROYED! We’ve seen engineers become Uber drivers because they can’t work in there field!

Administrative debarment happens even without conviction! DDTC decides your “not responsible” and bars you for years! Affiliates get debarred too – your company, subsidiaries, even family businesses! One violation destroys everyone connected to you!

What Does an Export Control Subpoena Demand?

The scope is absolutely crushing! Agencies demand impossible amounts of information:

Every export transaction for past 5 years, all technology control plans and procedures, visitor logs and foreign national employees, emails containing technical discussions, server access logs and IP addresses, contracts with foreign entities, even personal devices used for work!

The worst part? They demand you identify violations THEY DON’T KNOW ABOUT! “Provide all instances of non-compliance” means confessing to crimes! Can’t identify every violation? That’s obstruction! We’ve seen companies prosecuted for not reporting violations they didn’t know were violations!

Should We File a Voluntary Self-Disclosure?

This is the CRUELEST trap in export control! VSDs only help if filed BEFORE investigation starts!

Got subpoena? Too late for VSD credit! “Directed disclosure” from DDTC? Not voluntary! Even if you discovered violations independently, once government knows, your disclosure isn’t voluntary! We’ve seen companies spend millions on VSDs only to learn investigations already started!

But here’s the trap – NOT disclosing known violations is worse! Failure to disclose becomes aggravating factor! Penalties INCREASE! Criminal prosecution more likely! Your damned if you do, damned if you don’t!

How Long Do Export Investigations Last?

Prepare for YEARS of paralysis while your business dies slowly! Export investigations are incredibly complex:

Initial subpoena response (60-90 days of document production), agency review and technical analysis (6-12 months), follow-up subpoenas and interviews (6-12 months), coordination between BIS/DDTC/DOJ (ongoing), settlement negotiations or prosecution (12-24 months)!

Your looking at 3-5 years MINIMUM! During this time, export licenses suspended or denied, customers flee to competitors, employees with clearances leave, and investors abandon ship! Legal fees? Expect $1-3 MILLION! We’ve seen profitable exporters become insolvent before investigations conclude!

What About Deemed Exports to Foreign Nationals?

This is where companies get DESTROYED without knowing! Showing controlled technology to foreign employees IN THE US is illegal export!

That H-1B engineer accessing ITAR data? Export violation! Green card holder seeing EAR99 source code? Could be violation! Even CITIZENS of other countries working legally in US! We had client face $10 million penalty because Indian engineer saw missile defense presentation in Michigan office!

Universities get hammered for this – foreign graduate students doing research? Export violation if controlled technology involved! One university paid millions because Chinese PhD student accessed controlled software! Professor went to prison!

Can This Destroy Our Government Contracts?

Export violations AUTOMATICALLY trigger contract consequences! Suspension from federal contracts accompanies export investigations!

Contracting officers get notified of investigations – contracts terminated for convenience, option years not exercised, new awards suspended! Security clearances revoked for involved personnel! Facility clearance suspended! Can’t perform classified work!

The cascade effect is devastating – prime contractors drop you as subcontractor, team members exclude you from bids, competitors advertise your violations to customers! We’ve seen companies lose 90% of revenue during investigations!

Why Export Control Defense Requires National Security Lawyers

Look, we’re not your typical compliance lawyers who just file export licenses. We’re criminal defense attorneys who specialize in keeping executives out of federal prison when export violations become criminal prosecutions!

We understand the intersection of ITAR, EAR, and AECA criminal provisions. We know how “deemed exports” and “fundamental research” exceptions actually work. We can challenge technical determinations by government engineers. Most importantly, we prevent civil violations from becoming criminal cases!

Other firms tell you to cooperate and implement compliance programs. That’s EXACTLY how executives end up in federal prison! The government doesn’t care about your remediation – they want massive penalties and criminal convictions. We fight strategically, protecting your freedom while preserving your ability to export!

Call us RIGHT NOW at 212-300-5196
Export violations destroy careers overnight!
Former DDTC prosecutors – Security clearance experts – Available 24/7!

Don’t wait another second! Export investigations accelerate rapidly. Federal agents are reviewing your technology, analyzing your communications, interviewing your foreign nationals. Criminal prosecutors are building indictments. Your competitors are already planning to take your contracts!

Remember – export violations aren’t just regulatory matters, there NATIONAL SECURITY CRIMES! One email, one meeting, one foreign visitor seeing the wrong technology can trigger decades in prison. You need someone who understands both export control complexity AND federal criminal defense. Call us NOW before that subpoena becomes handcuffs!