DOJ’s National Security Division Announces First Declination Under the Department-Wide Corporate Enforcement Policy

On June 17, 2026, the US Department of Justice’s (“DOJ”) National Security Division (“NSD”) announced its first-ever declination under the new Department of Justice Corporate Enforcement and Voluntary Self-Disclosure Policy (the “CEP”). Specifically, NSD declined to prosecute a Germany-based engineering and technology company (the “Company”), resolving an investigation into an alleged scheme to export products and software to an Entity-listed company in the People’s Republic of China.

Background: The Department-Wide CEP

As we previously discussed, the DOJ released the CEP on March 10, 2026, adopting for the first time a unified framework governing corporate criminal enforcement across multiple components and superseding component-specific policies, including NSD’s prior Enforcement Policy for Business Organizations. Under Part I of the CEP, the DOJ will decline to prosecute a company that voluntarily self-discloses misconduct, fully cooperates, and timely and appropriately remediates, absent aggravating circumstances, with the company required to pay all disgorgement, forfeiture, and victim restitution. On March 30, 2026, NSD confirmed that the CEP applies to matters within its purview and directed that voluntary self-disclosures of potential criminal national security violations be submitted to NSD. This declination is the first concrete application of that approach to an export control matter.

The Underlying Conduct

According to the DOJ, between September 2020 and September 2024, the Company, through two non-US subsidiaries, exported more than $70 million worth of foreign-produced Micro-Electro-Mechanical Systems sensor products and software to a technology company and its affiliates on the Entity List without the license or authorization required from the Department of Commerce’s Bureau of Industry and Security (“BIS”). The items were subject to the Export Administration Regulations (“EAR”), 15 C.F.R. Parts 730-744, pursuant to an Entity List Foreign Direct Product Rule (“FDPR”) for certain specifically-designated entities, such as the PRC technology company at issue here. In its declination announcement, the DOJ noted that the Company’s trade compliance personnel were ill-equipped to provide accurate guidance on the FDPR, leading to several years of violations and approximately $11,430,098 in pre-tax profits.

Why the Company Qualified for a Declination

In declining prosecution, NSD emphasized the three pillars of CEP credit. First, the Company voluntarily self-disclosed the misconduct to NSD. Second, it fully cooperated, including by preserving and producing documents, proactively disclosing relevant facts, and promptly responding to follow-up requests. Third, it timely and appropriately remediated, making organizational changes, imposing disciplinary action, expanding its US trade compliance organization, and updating internal policies and procedures. Given the absence of aggravating circumstances, the DOJ declined prosecution, and the Company agreed to disgorge the $11,430,098 in profits it earned from the transactions.

The Parallel BIS Resolution

The declination was parallel to a civil resolution with BIS, in which the Company paid a $36,184,680 fine. A portion of the disgorgement will be credited toward that civil penalty. Assistant Attorney General for National Security John A. Eisenberg said the resolution “reflects the clear benefits for companies that promptly disclose potential violations and fully assist in our investigations,” while BIS framed the outcome as underscoring its commitment to strong enforcement and to incentivizing voluntary disclosures.

Takeaways

This first NSD declination under DOJ’s current CEP rubric signals that the benefits described in the CEP are real and attainable in the national security context. It also reinforces a consistent trend toward transparency and predictability in corporate resolutions that we have tracked across the Department, from the 2023 revisions to the Criminal Division’s CEP to the 2025 white-collar enforcement priorities to the SDNY’s own voluntary self-disclosure program. For companies with global supply chains, the matter is a pointed reminder of the extraterritorial reach of the FDPR to foreign-produced goods—including software—and that under-resourced trade compliance functions can generate years of exposure. As the DOJ and the BIS continue to emphasize the value of voluntary disclosure, companies that identify potential export control or sanctions violations should weigh prompt self-reporting, cooperation, and remediation in light of this declination.