USA Law and Practice Contributed by: Emily Hughes, Charles Kalil, Cori Lable and Ryan Raybould, Kirkland & Ellis
software, technical data, defence services), whereas EAR generally govern the export and in-country trans - fer of hardware, software and technology that is com - mercial or dual-use in nature. ITAR and EAR violations can include licence denial, imposing a civil monetary penalty and referral to the DOJ for possible criminal prosecution. Under AECA, corporate wilful violators are subject to up to USD1 million in fines, and individuals to up to USD1 million per violation and/or up to 20 years’ imprisonment. Civ - il penalties can be up to the greater of USD1,271,078 (subject to annual inflationary adjustment) and an amount that is twice the value of the transaction. Under ECRA, criminal penalties can include up to 20 years of imprisonment and up to USD1 million in fines per violation, or both (as well as criminal forfeiture of funds or other property involved in any violation). Civil penalties can be up to USD374,474 per violation (subject to annual inflationary adjustment) or twice the value of the underlying transaction, whichever is greater. Violators can also be denied export privileges or debarred from government contracting. Penalties can be substantially mitigated through the submission of a valid voluntary disclosure. Customs Smuggling and other importation violations are crimes under 18 USC Sections 541, 542 (importation of goods by means of any fraudulent written or ver - bal statement), 544 and 545 (smuggling). The False Statements statute provides for fines and potential imprisonment of up to two years. Smuggling is know - ingly and clandestinely bringing goods into the USA with the intent to defraud the government by failing to properly declare the goods. Punishment for smug - gling is a fine of up to USD250,000 and imprisonment of up to 20 years, and forfeiture of the merchandise
18 USC Section 1503 punishes corrupt attempts to obstruct the “due administration of justice” in con - nection with a pending judicial proceeding. Violators face up to ten years’ imprisonment and a fine of up to USD250,000 for individuals and USD500,000 for organisations. 18 USC Section 1505 punishes attempts to impede the “due and proper administration of the law” in any proceeding before a US agency, department or com - mittee, including Congress. Violators face up to five years’ imprisonment, or eight years in terrorism cases, and a USD250,000 fine. Federal law prohibits making false statements to the government, including by misleading misrepresenta - tions (18 USC Section 1001). Even when not charged separately, prosecutors and regulators consider efforts to conceal wrongdoing to be aggravating factors in charging and sentencing. Convicted parties face fines of up to USD250,000 and five years’ imprisonment. If the crime is related to ter - rorism, the convicted parties face up to eight years’ imprisonment. 3.12 Aiding and Abetting Both state and federal courts recognise liability for aiding and abetting. A director, officer or employee of a corporation can incur liability for aiding and abetting the commission of a corporate crime. Under federal law, anyone who “aids, abets, counsels, commands, induces or procures” the commission of an offence is punishable as a principal (18 USC Section 2 (a)). As a result, the penalties for aiding and abetting are equivalent to those for the principal offence. Certain actors may also be liable for “causing” another to violate a federal securities statute, and the SEC may issue a cease-and-desist order against a secondary actor. For “causing” liability to attach, the SEC must prove three elements (see 15 USC Section 78u-3 (a)). 3.13 Money Laundering The Money Laundering Control Act (18 USC Sec - tions 1956 and 1957) criminalises money laundering. Prosecutors must show that a defendant knowingly transported or transmitted funds between states
smuggled, or its value. 3.11 Concealment
Defendants can incur liability for both concealment and an underlying offence. State and federal laws criminalise efforts to conceal wrongdoing improperly, which are generally referred to as obstruction of jus - tice.
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