February 12, 2021

This is the third and final update regarding the valuable information obtained from the NSSF’s January 11-14 firearms import-export webinars.  As explained in our January 21 and January 26 updates, jurisdiction over the export of the majority of firearms and ammunition was formally transferred from the Department of State to the Department of Commerce on March 9, 2020.  Although there is less red tape associated with obtaining an export license from the Department of Commerce, it is much more active in enforcing licensing requirements and issuing sanctions for violations than the Department of State. 
The Department of Commerce Office of Export Enforcement has forty analysts who look for export violations based on analyzing computer data, in addition to Special Agents in dozens of cities throughout the United States.  Every year, the Office of Export Enforcement conducts more than one thousand in-person visits to U.S. exporters, as well as about one thousand end-user checks to companies in foreign countries to whom products were exported.
Criminal penalties for willful violations of the Export Control Reform Act (“ECRA”), the statute pursuant to which the Export Administration Regulations (“EAR”) were enacted, can result in imprisonment of up to twenty years and fines up to $1 million.  Administrative penalties include fines of $300k or twice the value of the shipment, as well as the loss of the privilege to export products.  In addition, to violations of the ECRA, export violation cases usually also involve charges related to conspiracy, money-laundering and smuggling laws.
Based on the resources that the Department of Commerce devotes to investigating violations of export laws, there is a high chance that it will discover violations.  This, coupled with the substantial penalties, requires that companies exporting products develop proper policies and procedures to prevent any potential violations.  If a company discovers that it has violated an export law, the Department of Commerce offers a voluntary self-disclosure program that can substantially reduce potential penalties for the violation.  A voluntary self-disclosure usually results in the company only receiving a warning letter.  A voluntary self-disclosure must be made before the Department of Commerce becomes aware of the violation.  Because it involves disclosure of a potential violation of federal criminal law, a company should always consult with a qualified attorney before making a voluntary self-disclosure.
Renzulli Law Firm regularly advises industry members concerning requirements for the export of firearms pursuant to both the international Traffic in arms Regulations (“ITAR”) administered by the Department of State and the EAR administered by the Department of Commerce.  We can assist you in obtaining licenses to export products pursuant to the requirements of either ITAR or EAR as applicable to the product at issue, as well as with a voluntary self-disclosure in the event of a violation of the EAR.
For additional information on the import and export of firearms, please contact John F. Renzulli or Christopher Renzulli.