DOJ National Security Division issues first declination under new Corporate Enforcement Policy

The decision to decline prosecution of a German technology company offers insight into the rewards and limitations of the new policy.

On June 17, 2026, the US Department of Justice (DOJ), National Security Division (NSD) announced that it had declined to prosecute an international technology and services company (the Company), thus resolving its investigation into alleged unauthorized exports to the Chinese telecommunications company Huawei Technologies Co., Ltd. and its affiliates (collectively, Huawei). The case represents NSD’s first declination issued under Part I of the DOJ’s new, Department-wide Corporate Enforcement Policy (CEP), which asserts that the DOJ “will decline to prosecute” a company that voluntarily self-discloses misconduct, fully cooperates, and timely remediates, absent aggravating circumstances.¹ In a coordinated resolution, the US Department of Commerce’s Bureau of Industry and Security (BIS) fined the Company $36,184,680 for the same conduct after applying its own administrative enforcement guidance.²

These resolutions demonstrate the clear benefits for companies that voluntarily self-disclose misconduct, fully cooperate, and timely remediate. They also provide useful insight into the interplay of the CEP and its limitations in the context of a parallel civil enforcement action. 

Background

According to the declination letter, the Company, acting through two of its non-US subsidiaries, engaged in a series of violations of US export control laws between 2020 and 2024.³ NSD stated it found evidence that the Company exported from outside the United States approximately $72.4 million in certain foreign-produced sensors and automotive software to Huawei, a BIS-listed entity, without the licenses or authorizations required under the Export Administration Regulations (EAR). The violations reportedly stemmed from a compliance breakdown caused by inadequate compliance resources and insufficient compliance personnel expertise, rather than intentional misconduct.

Parallel Resolutions & Application of Enforcement Policies

After identifying the issue, the Company halted the relevant transactions, retained outside counsel, and initiated an internal investigation. According to the declination letter, the Company’s conduct after discovering the violations satisfied the requirements of Part I of the CEP:

• The Company made a qualifying voluntary self-disclosure (VSD). The CEP requires disclosure to the appropriate DOJ component, made before any imminent threat of disclosure or government investigation and within a reasonably prompt time after the company becomes aware of the misconduct. The Company met this standard by disclosing to NSD, and not just BIS, while its internal investigation was still ongoing. 
• The Company fully cooperated. The CEP requires companies to proactively disclose all relevant, non-privileged facts. The declination letter credited the Company’s proactive preservation, collection, and production of relevant documents and its prompt responses to NSD’s requests.
• The Company timely and appropriately remediated. The declination letter cited the Company’s organizational changes, expansion of its trade compliance function (adding 66 employees), strengthening of US-based compliance resources, and revisions to internal policies as examples of its substantial remediation efforts.
• No aggravating circumstances were present. NSD found no aggravating circumstances despite the Company’s 109 allegedly violative transactions over a four-year period in the face of several third-party warnings, demonstrating the DOJ’s broad discretion in its application of the CEP in practice. The declination letter noted that although the Company’s internal investigation uncovered “numerous mistakes,” the Company “does not believe those mistakes rose to the level of acting willfully, as required for criminal violations.”⁴

For its part, BIS required the Company to admit to 109 EAR violations and imposed an approximately $36 million civil penalty, which represents a noteworthy discount from the civil statutory amount that could have been imposed. The civil settlement agreement also highlighted the Company’s timely voluntary self-disclosure to BIS, its full cooperation, the Company’s senior management’s commitment of resources and attention to the matter, and its remediation efforts. These factors reflect BIS’s application of its own administrative enforcement guidelines and VSD policy, which are set out in the EAR. 

Insights & Implications

These parallel resolutions offer a few takeaways for corporate compliance:

• The DOJ-wide CEP offers extremely favorable benefits to companies that meet its terms. A company that promptly discloses its misconduct to the relevant DOJ criminal component, cooperates fully, and remediates can avoid criminal prosecution entirely, even for serious, long-running misconduct. By qualifying for a CEP declination, the Company avoided criminal prosecution and the attendant risks of conviction, criminal fines, and lasting collateral consequences.
• A declination, however, does not dispose of financial consequences. The CEP expressly conditions a declination on the company’s payment of all applicable disgorgement, forfeiture, and restitution. Here, the declination required the Company to disgorge profits earned from the alleged violations, which totaled in the millions. NSD’s declination also did not preclude BIS from imposing a substantial civil penalty, which likewise totaled in the millions. 
• Interagency cooperation played—and is likely to continue to play—a significant role in future corporate resolutions. The federal agencies responsible for sanctions and export control enforcement have issued Joint Tri-Seal and Quint-Seal compliance notes in recent years,⁵ underscoring the importance of multi-agency coordination across criminal, civil, and administrative enforcement tracks. Notably, the NSD declination letter and the BIS settlement agreement each referenced the other agency’s enforcement action in their respective resolutions. For the Company, this resulted in some benefit: NSD specifically cited the adequacy of BIS’s civil penalty as a factor in its decision to decline prosecution, and NSD credited approximately $7.8 million paid by the Company to BIS against the amount of disgorgement owed. 
• Agency disclosure policies differ. Companies facing a disclosure decision may wish to consider the variations between the voluntary self-disclosure policies of BIS (or another relevant civil agency) and the CEP, as the eligibility requirements and potential benefits of disclosure differ across agencies. 

In view of these enforcement actions, companies may wish to revisit their internal policies and procedures for conducting internal investigations and responding to internal reports to ensure potential issues are escalated and assessed quickly enough to preserve the option of a qualifying disclosure. 

For more information on the Corporate Enforcement Policy or the implications of this declination for your business, please contact Clyde & Co’s Regulatory & Investigations team.

¹US Dep’t of Justice, Corporate Enforcement and Voluntary Self-Disclosure Policy, Background & Part I (Mar. 10, 2026), https://www.justice.gov/dag/media/1430731/dl?inline; US Dep’t of Justice, Office of Public Affairs, 26-230, Department of Justice Releases First-Ever Corporate Enforcement Policy for All Criminal Cases (Mar. 10, 2026), https://www.justice.gov/opa/pr/department-justice-releases-first-ever-corporate-enforcement-policy-all-criminal-cases; US Dep’t of Justice, Office of Public Affairs, 26-666, National Security Division Announces First Declination Under the Department-wide Corporate Enforcement Policy (Jun. 17, 2026), https://www.justice.gov/opa/pr/national-security-division-announces-first-declination-under-department-wide-corporate.

²US Dep’t of Com., Bureau of Indus. & Sec., Robert Bosch GmbH (Bosch) to Pay $36 Million Penalty to BIS for Violations Pertaining to Shipments to Huawei (Jun. 17, 2026), https://media.bis.gov/sites/default/files/documents/Bosch%20Press%20Release.pdf; see 15 C.F.R. § 764.5; 15 C.F.R. pt. 766, supp. No. 1.

³US Dep’t of Justice, Nat’l Sec. Div., Letter to Christopher Steskal, Esq., Melissa Duffy, Esq., Robert Slack, Esq., of Fenwick & West LLP, re: Robert Bosch GmbH at 1-2 (Jun. 15, 2026), https://www.justice.gov/d9/2026-06/bosch_-_executed_declination.pdf [hereinafter Declination Letter].

⁴Declination Letter at 2.

⁵US Dep’t of Com., US Dep’t of the Treasury & US Dep’t of Justice, Tri-Seal Compliance Note: Obligations of Foreign-Based Persons to Comply with U.S. Sanctions and Export Control Laws 2, 5–9 (Mar. 6, 2024), https://ofac.treasury.gov/media/932746/download?inline=; US Dep’t of Com., US Dep’t of the Treasury, US Dep’t of Justice, US Dep’t of State & US Dep’t of Homeland Sec., Quint-Seal Compliance Note: Know Your Cargo: Reinforcing Best Practices to Ensure the Safe and Compliant Transport of Goods in Maritime and Other Forms of Transportation 5–6 (Dec. 11, 2023), https://ofac.treasury.gov/media/932391/download?inline=.