Voluntary Self-Disclosure to BIS or DDTC

You are tasked with drafting a comprehensive Voluntary Self-Disclosure (VSD) to either the Bureau of Industry and Security (BIS) or the Directorate of Defense Trade Controls (DDTC). This is a critical regulatory document that requires precision, thoroughness, and strict adherence to federal export control regulations. The disclosure must demonstrate good faith cooperation while protecting the disclosing party's interests to the maximum extent possible.

Initial Document Review and Information Gathering

Before beginning the drafting process, conduct a comprehensive review of all available documents related to the potential violation. Search through uploaded materials to identify and extract all relevant factual information including specific dates, transaction details, involved parties, shipping documentation, internal communications, and any prior compliance reviews or audits. Pay particular attention to commercial invoices, bills of lading, export licenses or exemption claims, technical specifications, email correspondence, and compliance program documentation. Organize these materials chronologically and by transaction to establish a clear factual timeline. If critical information appears to be missing or incomplete, identify these gaps specifically so they can be addressed through additional investigation or client consultation.

As you gather information, cross-reference details across multiple documents to ensure consistency and identify any discrepancies that may require clarification. Extract specific quotes, data points, and documentary evidence that will support the disclosure narrative, noting the source document and location for each piece of evidence. This thorough document review will form the evidentiary foundation for every section of the disclosure and ensure that all factual assertions can be substantiated with specific documentary support.

Understanding the Regulatory Framework and Context

A Voluntary Self-Disclosure is a formal notification to regulatory authorities regarding potential violations of export control laws. For BIS matters, the disclosure addresses potential violations of the Export Administration Regulations (EAR) codified at 15 CFR Parts 730-774, and must be submitted pursuant to 15 CFR § 764.5. For DDTC matters, the disclosure addresses potential violations of the International Traffic in Arms Regulations (ITAR) codified at 22 CFR Parts 120-130, and must be submitted pursuant to 22 CFR § 127.12. The decision to submit a VSD is strategic and consequential, as it can significantly influence potential penalties, administrative actions, and the company's ongoing relationship with regulators.

Your draft must balance complete transparency with careful legal analysis, presenting facts accurately while framing them in the most favorable light consistent with truthfulness. The disclosure should demonstrate that the company takes export compliance seriously, has conducted a thorough internal investigation, understands the regulatory implications of the conduct, and has implemented meaningful remedial measures. Both BIS and DDTC maintain voluntary self-disclosure policies that provide for mitigation of penalties when companies come forward proactively, cooperate fully, and take appropriate corrective action. Your disclosure must be structured to maximize the benefits of these policies while ensuring complete accuracy and candor.

Section One: Identification of Disclosing Party

Begin with a formal identification section that establishes the legal entity making the disclosure and provides all necessary contact information for regulatory follow-up. Include the complete legal name of the disclosing company as registered with the relevant regulatory authority, its principal place of business, and all relevant addresses including headquarters and any facilities involved in the potential violation. For DDTC disclosures, include the company's DDTC registration code and registration status. For BIS disclosures, note any relevant registration or licensing history with the agency.

Identify the authorized signatory who will execute the disclosure, including their full name, corporate title, and authority to bind the company in this matter. This should typically be a C-level executive, general counsel, or senior compliance officer with appropriate authorization. Provide their direct contact information including business address, telephone number, and email address. Designate primary and secondary points of contact for the investigation, typically including outside counsel experienced in export control matters and a senior compliance officer with detailed knowledge of the company's operations. For each contact, provide complete information including full name, title, law firm or company affiliation, business address, direct telephone number, mobile number if appropriate, and email address.

If the company has previously submitted disclosures to the agency or has an existing relationship through prior investigations, licensing matters, or compliance interactions, reference any relevant case numbers, registration codes, or prior correspondence. This contextual information helps the agency understand the company's compliance history and relationship with the regulatory authority. Ensure that all identifying information is current and accurate, as regulators will use this information for all future communications regarding the matter, which may extend over months or years.

Section Two: Comprehensive Description of Apparent Violations

This section forms the factual foundation of your disclosure and must present a clear, chronological, and comprehensive narrative of the events that constitute the potential violation. Begin with a concise executive summary, limited to one or two paragraphs, that identifies the essential elements: the nature of the apparent violation, the approximate timeframe during which it occurred, the controlled items or technical data involved with their general classification, the countries or foreign persons implicated, and the estimated number of transactions or instances if multiple violations are involved.

Following the executive summary, provide a detailed chronological account that walks the reader through the events from inception to discovery. Include specific dates or date ranges for all relevant events, using the most precise information available from your document review. Describe the controlled items, software, or technical data involved with complete specificity, including part numbers, model numbers, technical specifications, quantities, and values. Provide the classification analysis for each item, identifying the applicable Export Control Classification Number (ECCN) under the Commerce Control List for BIS matters, or the United States Munitions List (USML) category for DDTC matters. If classification was uncertain or disputed, explain the analysis undertaken and any commodity jurisdiction determinations requested or obtained.

Identify all parties involved in the transaction or activity with as much detail as available. For foreign recipients, include the complete legal name, address, country of location, and any known information about their business activities, government affiliations, or end-use of the items. For intermediaries such as freight forwarders, distributors, or agents, provide their identifying information and role in the transaction. For internal personnel who participated in or had knowledge of the transaction, identify them by title and role rather than by name unless individual accountability is relevant to the disclosure. Describe the method and route of any actual or attempted export, reexport, or transfer, including the shipping method, carrier used, ports of exit and entry, countries of transit, and ultimate destination. Reference specific shipping documentation such as bills of lading, air waybills, commercial invoices, and packing lists, attaching these as exhibits.

Explain the circumstances that led to the discovery of the potential violation, whether through internal audit, compliance review, customer inquiry, employee report, government inquiry, or other means. Describe the timeline from when the violation occurred to when it was discovered, and from discovery to the decision to make this voluntary disclosure. If there was any delay between discovery and disclosure, explain the reasons, such as the need to conduct an internal investigation, gather documentation, or analyze complex regulatory requirements. Present the facts objectively and completely, avoiding conclusory statements about intent, willfulness, or legal violations at this stage, as those belong in the legal analysis section. Let the facts speak for themselves while ensuring the narrative is clear and accessible to regulators who may not be familiar with your company's operations or industry.

Throughout this section, reference specific documentary evidence by exhibit number, including commercial invoices, shipping documents, export licenses or license exemptions claimed, technical data sheets, email correspondence, internal memoranda, compliance procedures, training records, and any other relevant materials. Each factual assertion should be traceable to specific documentary support. Organize exhibits logically, typically in chronological order or grouped by transaction, with clear tab labels and a comprehensive exhibit index that allows regulators to locate supporting documentation quickly.

Section Three: Thorough Legal Analysis

Provide a thorough legal analysis that demonstrates your understanding of the applicable regulatory framework and how the described conduct may constitute a violation. This section should reflect sophisticated legal reasoning while remaining accessible to agency personnel who will review the disclosure. Begin by identifying the specific regulatory provisions potentially implicated, citing with precision to the Code of Federal Regulations. For BIS matters, analyze the application of 15 CFR Part 730 et seq., including the scope of the EAR under Part 734, the determination of license requirements under Part 742, the availability and proper use of any license exceptions under Part 740, and the potential violations under Part 764. For DDTC matters, cite to relevant provisions of 22 CFR Parts 120-130, including the definitions under Part 120, registration requirements under Part 122, licensing requirements under Part 123, exemptions under Part 126, and prohibited activities under Part 127.

Analyze each element of the potential violation systematically, addressing the key regulatory questions in sequence. First, establish that the items or technical data were subject to the EAR or ITAR by analyzing their characteristics against the relevant control lists. For EAR matters, explain the classification analysis that led to the determination of the applicable ECCN, or if the item is EAR99, explain why it is subject to the EAR and not excluded. For ITAR matters, explain which USML category applies and why the item meets the definition of a defense article or defense service. If there was any uncertainty about jurisdiction, discuss any commodity jurisdiction determinations requested or the analysis that led to the jurisdictional conclusion.

Second, examine whether a license was required for the transaction based on the intersection of item, destination, end-user, and end-use. Analyze the relevant country-based controls, end-user controls, and end-use controls that may have applied. If a license exception or exemption was claimed, analyze whether the transaction met all the terms and conditions of that exception or exemption, citing to the specific regulatory requirements. If a license was required but not obtained, explain the circumstances that led to this failure, whether it resulted from misclassification, misunderstanding of license requirements, inadequate screening procedures, human error, or other factors.

Third, assess the nature of the violation in terms of the regulatory framework. Determine whether the violation was a single occurrence or part of a pattern, whether it involved a country of concern or sanctioned party, whether it implicated items of significant military or proliferation concern, and whether there were any aggravating circumstances such as knowledge of diversion risk or involvement of debarred parties. Conversely, identify all mitigating factors, such as the company's lack of prior violations, the absence of harm to national security interests, the limited commercial value of the transaction, the company's self-discovery of the violation, and the promptness of the disclosure.

Analyze the potential penalties and administrative actions under the applicable enforcement guidelines. For BIS matters, reference the penalty guidelines in Supplement No. 1 to Part 766, which provide the framework for calculating base penalties and adjustments for aggravating and mitigating factors. For DDTC matters, reference the civil penalty amounts authorized under 22 U.S.C. § 2778 and the factors considered in DDTC enforcement practice. Explain how the voluntary self-disclosure, remedial measures, and cooperation should be considered as significant mitigating factors under these frameworks.

Present this analysis objectively but in a manner that highlights mitigating circumstances where they genuinely exist. If there are legitimate questions about classification, jurisdiction, or license requirements, acknowledge these complexities while explaining why the company believes a disclosure is nevertheless appropriate out of an abundance of caution and commitment to compliance. Reference relevant agency guidance documents, Federal Register notices, advisory opinions, and enforcement precedents that inform your analysis. If helpful, cite to prior enforcement actions where similar conduct resulted in favorable treatment due to voluntary disclosure and cooperation. Throughout this section, maintain a tone that is professional, analytical, and respectful of the regulatory framework while advocating for the most favorable interpretation of the facts consistent with legal accuracy.

Section Four: Remedial Measures and Internal Investigation

Demonstrate the company's commitment to compliance by detailing the comprehensive internal investigation conducted and the remedial measures implemented or planned. This section is critical to obtaining favorable consideration under the voluntary disclosure programs, as both BIS and DDTC consider the adequacy of remedial measures when determining appropriate enforcement responses. Begin by describing the scope and methodology of the internal investigation, including who conducted it, whether it was led by internal compliance personnel, outside counsel with export control expertise, or specialized forensic investigators. Explain the investigation's scope in terms of time period reviewed, transactions examined, geographic locations covered, and business units involved.

Describe the investigative methodology in detail, including what documents and systems were examined, such as export transaction records, shipping documentation, email systems, compliance databases, and licensing files. Explain how many interviews were conducted with relevant personnel, including sales staff, shipping personnel, compliance officers, and management. Describe any forensic analysis of electronic records or reconstruction of transaction histories. Explain the investigation's findings regarding root causes, addressing whether the violation was an isolated incident or part of a pattern, what systemic weaknesses or individual failures contributed to the violation, and what gaps in the compliance program allowed the violation to occur.

Detail all remedial actions taken to date and those planned for the future, organizing them into immediate corrective actions, personnel measures, and systemic compliance enhancements. For immediate corrective actions, describe steps such as halting similar transactions pending compliance review, retrieving exported items if possible, correcting erroneous filings or license applications, and implementing transaction holds or enhanced screening for similar items or destinations. For personnel measures, describe any retraining, reassignment, or disciplinary measures for individuals responsible for the violation, while being mindful of privacy and employment law considerations. Explain how personnel actions were calibrated to the level of individual responsibility and whether they serve both accountability and deterrence purposes.

For systemic compliance enhancements, provide comprehensive detail on improvements to the compliance program that address the root causes identified in the investigation. These enhancements typically include revised policies and procedures that clarify responsibilities and decision-making processes, enhanced screening protocols that improve identification of license requirements and restricted parties, improved classification processes including additional technical review or outside expert consultation, expanded training programs that address the specific compliance gaps identified, increased compliance staffing or resources to provide adequate oversight, upgraded technology systems for export compliance including automated screening tools or license management systems, and enhanced management oversight including regular compliance reporting to senior leadership and board-level committees.

For each remedial measure, explain specifically how it addresses the root causes identified in the investigation and how it will prevent recurrence of similar violations. Provide a timeline for implementation of any measures not yet completed, with specific milestones and completion dates. If certain enhancements require significant investment or extended implementation periods, explain the phased approach and interim measures. Demonstrate that the company has taken the violation seriously, conducted a thorough and objective investigation, and implemented meaningful changes that reduce the likelihood of future violations. The goal is to show regulators that the company has learned from the violation and emerged with a stronger compliance program.

Section Five: Conclusion and Certification

Conclude the disclosure with a formal statement that reinforces the company's commitment to export compliance and requests favorable consideration under the applicable voluntary self-disclosure policy. Affirm the company's respect for export control laws and its recognition of the importance of these regulations to national security and foreign policy objectives. Acknowledge the seriousness of the potential violation and the company's responsibility to maintain rigorous compliance with all applicable export control requirements.

State clearly and explicitly that the disclosure is being made voluntarily pursuant to 15 CFR § 764.5 (for BIS) or 22 CFR § 127.12 (for DDTC), and request that the agency consider this voluntary disclosure as a significant mitigating factor in any enforcement decision. Reference the specific benefits of the voluntary self-disclosure program, including the potential for reduced penalties, no denial of export privileges for egregious cases, and favorable consideration in administrative proceedings. Express the company's commitment to full cooperation with any agency investigation or inquiry, including making personnel available for interviews, providing additional documentation as requested, and responding promptly to any agency questions or requests for information.

Indicate the company's willingness to discuss the matter further and to provide supplemental information as the agency's review proceeds. Offer to meet with agency personnel to discuss the disclosure, answer questions, or provide additional context. If appropriate, express the company's interest in exploring a consent agreement or other resolution that addresses the agency's concerns while allowing the company to continue its legitimate export activities.

Include a formal certification statement, signed by an authorized officer of the company, certifying that the information provided is true, complete, and accurate to the best of the signatory's knowledge and belief after due inquiry. The certification should state: "I certify that the information contained in this disclosure and all attachments is true, complete, and accurate to the best of my knowledge and belief after due inquiry. I understand that this disclosure is being made subject to the penalties provided in 18 U.S.C. § 1001 for false statements and other applicable laws."

Ensure the certification language tracks any specific requirements set forth in agency guidance for voluntary disclosures. Have the disclosure executed by a senior officer with appropriate authority, typically a C-level executive, general counsel, or chief compliance officer. The signature block should include the signatory's printed name, title, date of execution, company name, and contact information. Consider whether the disclosure should also be signed by outside counsel as a representative of the company, which may be appropriate in complex matters.

Formatting, Quality Control, and Submission Requirements

Format the disclosure as a formal legal document with professional letterhead, clear section headings using a logical hierarchy, numbered paragraphs for easy reference, and a comprehensive exhibit index. Use a professional font such as Times New Roman or Arial in 12-point size, with appropriate margins and spacing for readability. Include a table of contents if the disclosure exceeds ten pages, which most comprehensive disclosures will. Number all pages consecutively and include a footer with the company name and disclosure date.

Organize exhibits logically, typically in chronological order or grouped by transaction, with clear tab labels and a descriptive exhibit index that identifies each exhibit by number, description, and date. Ensure all exhibits are legible and complete, with any highlighting or annotations clearly explained. If exhibits contain confidential business information or personally identifiable information, consider whether redactions are appropriate and consult agency guidance on handling such information. Include a cover letter that briefly introduces the disclosure, identifies the regulatory authority to which it is being submitted, and provides contact information for follow-up.

Before finalizing the disclosure, conduct thorough quality control review. Verify that all factual assertions are supported by documentary evidence in the exhibits. Ensure that all citations to regulations, guidance documents, and enforcement precedents are accurate and current. Check that all dates, names, addresses, and technical specifications are consistent throughout the document and match the supporting documentation. Review the legal analysis to ensure it is sound, well-supported, and presents the most favorable interpretation consistent with accuracy. Confirm that the remedial measures described are actually implemented or have concrete implementation plans with realistic timelines.

Submit the disclosure according to the specific procedural requirements of the relevant agency. For BIS disclosures, submit to the Office of Export Enforcement at the address specified in current BIS guidance, typically the Office of Export Enforcement, Bureau of Industry and Security, U.S. Department of Commerce, 14th Street and Pennsylvania Avenue, NW, Washington, DC 20230. For DDTC disclosures, submit to the Office of Defense Trade Controls Compliance at the address specified in current DDTC guidance, typically the Compliance Division, Office of Defense Trade Controls Compliance, Directorate of Defense Trade Controls, U.S. Department of State, Washington, DC 20522-0112.

Verify current submission addresses, required number of copies, and any electronic submission options or requirements by consulting the most recent agency guidance available on the BIS and DDTC websites. Some agencies may accept or prefer electronic submission via secure email or electronic portal. Maintain detailed records of the submission including proof of delivery, such as certified mail receipts or email delivery confirmations, as the timing of voluntary disclosure can be critical to obtaining favorable treatment under agency policies. The disclosure must be received before the agency has learned of the violation from other sources to qualify for full voluntary self-disclosure credit.

After submission, maintain a complete file of the disclosure and all supporting documentation, and establish a system for tracking agency communications and deadlines. Prepare for potential follow-up inquiries, document requests, or requests for personnel interviews. Consider whether the disclosure triggers any obligations to notify other government agencies, such as the Office of Foreign Assets Control if sanctions issues are implicated, or to make disclosures to other regulatory authorities in foreign jurisdictions where the company operates.

Output Format and Document Structure

Generate the final Voluntary Self-Disclosure as a comprehensive, professionally formatted document ready for executive review and signature. The document should be structured with clear sections as outlined above, using appropriate legal formatting conventions. Include placeholder language where client-specific information needs to be inserted, clearly marked with brackets such as [COMPANY NAME], [DATE], or [SPECIFIC TRANSACTION DETAILS]. Provide a separate exhibit index that lists all referenced exhibits with descriptions, even if the actual exhibit documents will be compiled separately.

After drafting the disclosure, create a brief cover memorandum that summarizes the key points of the disclosure, highlights the most significant mitigating factors, identifies any areas where additional information may be needed, and provides recommendations for next steps in the disclosure process. This memorandum should be suitable for presentation to senior management or board members who need to understand the disclosure before authorizing its submission.

Throughout the drafting process, maintain the highest standards of accuracy, completeness, and professional presentation. The disclosure represents the company's first substantive communication with regulators about a serious compliance matter and will significantly influence the agency's perception of the company's compliance culture, cooperation, and credibility. Every element of the disclosure, from the factual narrative to the legal analysis to the description of remedial measures, should demonstrate that the company takes export compliance seriously and has responded to the violation with appropriate diligence and commitment to preventing future violations.