Kennedy, Kim introduce bipartisan bill to strengthen penalties for illegal exports of sensitive U.S. technology

WASHINGTON - Sen. John Kennedy (R-La.), a member of the Senate Banking Committee, joined Sen. Andy Kim (D-N.J.) in introducing the Export Control Reform Act of 2018 (ECRA) Penalty Increase Act, bipartisan legislation to strengthen penalties for individuals and companies that violate U.S. export control laws.

The bill would increase civil penalties for unlawfully exporting, re-exporting or transferring sensitive American technology to foreign adversaries and other bad actors. The legislation would help ensure that penalties are strong enough to deter violations involving technology that could threaten U.S. national security.

"America's enemies are not stealing our technology so they can build better toasters. They want our chips, software and sensitive technology to strengthen their militaries, spy on Americans and undercut our national security. If a company or individual illegally hands over American technology to our adversaries, a slap on the wrist will not cut it. This bill ensures the punishment fits the threat," said Kennedy.

"To successfully deter export control violations, we need penalties that truly recognize the gravity of their threat to our national security. The legislation would take a long-overdue step to modernize enforcement authorities and put us in a much stronger position to stop the transfer of sensitive technologies to America's adversaries," said Kim.

Background:

The Export Control Reform Act of 2018 gave the federal government important tools to control the export, re-export and transfer of sensitive U.S. technologies. These controls help prevent American technology from falling into the hands of America's enemies, hostile regimes and other entities that could threaten our national security.

As the strategic importance and the commercial value of American technology have grown, ECRA's civil penalty structure has not kept pace. The ECRA Penalty Increase Act would modernize those penalties so violations carry real consequences.

The ECRA Penalty Increase Act would:

• Increase the statutory maximum civil penalty from $300,000 to $1.2 million per violation.

• Increase the transaction-based penalty from twice the value of the unlawful transaction to four times the value.
• Ensure individuals and companies that illegally transfer sensitive American technology face consequences that match the seriousness of the violation.

• Strengthen enforcement tools to deter unlawful transfers of critical technologies to foreign adversaries and bad actors.

Full text of the ECRA Penalty Increase Act is available here.