By Jeffrey Newman Esq.
Congressman Keith Self, who is the U.S. representative for Texas’ 3rd Congressional District, a military veteran and former judge, has introduced the ECRA Penalty Increase Act which is designed to enhance the enforcement under the Export Control Enforcement Act of 3018 by raising financial penalties for the illegal export of sensitive U.S. technology. The Act proposes increasing the maximum civil penalty from $300,000 to $1.2 million per violation and adjusting transaction-based penalties. Congressman Self emphasized that these changes reflect the seriousness of export control violations, which he characterized as significant threats to national security. By modernizing penalty levels, the legislation aims to deter unlawful exports, ensuring that penalties serve as effective deterrents against violations.
“Export control violations are not minor paperwork errors, they are national security breaches,” said Congressman Self. “When companies or individuals illegally transfer American technology to adversarial nations, they undermine our defense, our economy, and our credibility. This bill ensures the penalties reflect the seriousness of that offense. “This bill is about restoring deterrence and accountability. If you break U.S. export control laws, you should pay a price that actually hurts.” Self served in the United States Army from 1975 to 1999. He was a member of the Army Special Forces and Army Rangers. He was deployed to Qatar, Egypt, Germany, Afghanistan, and Belgium.
The US Commerce Department brough 15 criminal cases in 2024 charging sanctions and export control vioolations, smuggling conspiracies and other offences related to the transfer of sensitive technology to CHina, russi and Iran. In June of 2024 a drone attacked a US military base in the Jordan desert near the Syrian border. Three American service members died and 40 were wounded. An analysius let to a Natick engineer who allegedly plotted to send highly sophisticated and sensitive Us technology to an Iranian company that makes the drone navigation systems. Mahdi Mohammad Sadeghi, 42, was taken into custody last Monday. Prosecutors say he works at a Massachusetts-based semiconductor company. The same day, 38-year-old Mohammad Abedini was arrested in Milan, Italy, where he lives. Federal authorities said the two arrests were related to the deadly Jan. 28 strike on the American military Tower 22, located near the northeast corner of Jordan on the Syrian border. He was indicted on one count of conspiracy to violate and three counts of violating the International Emergency Economic Powers Act and the Iranian Transactions and Sanctions Regulations.
Over the past five years, civil penalties for illegal violations of U.S. export controls involving the export of sensitive technology have reached record levels, especially in cases involving transfers to adversary nations like China and Russia. Recent enforcement actions by the Bureau of Industry and Security (BIS), the Department of Justice (DOJ), and the Office of Foreign Assets Control (OFAC) highlight a marked increase in aggressive penalties for such violations.
Notable Civil Penalties and Cases
- In 2025, Cadence Design Systems resolved enforcement actions involving illegal transfers of semiconductor design hardware and software to a restricted Chinese university. Cadence agreed to pay civil penalties of approximately $95 million to BIS, as part of a larger $140 million combined criminal and civil settlement. The violations included unlicensed exports to Chinese entities linked to military modernization programs and system compliance failures that allowed downloads of sensitive software by parties on the Entity List.
- Haas Automation paid over $2.5 million in combined civil penalties in 2025 for shipping advanced CNC machine parts to parties linked to the military sectors of China and Russia. The BIS penalty was accompanied by an OFAC settlement and additional compliance program requirements.
- Seagate US, a hard drive manufacturer, was penalized in April 2023 with the largest standalone administrative penalty in BIS history for unauthorized shipments to a restricted entity. The exact civil penalty amount was unprecedented at the time.
- In 2025, Luminultra (Canadian company with U.S. operations) settled with BIS for exporting sensitive items to Iran, agreeing to pay $685,051 in civil penalties and comply with ongoing audits and training.
- Hallewell Ventures Ltd. (British Virgin Islands) was fined $374,474 by BIS in 2025 for reexporting a Bombardier Global 7500 aircraft to Russia without the required license for U.S.-origin components.
Penalty Amounts and Regulatory Framework
- BIS administrative civil penalties have steadily increased. As of 2025, the maximum administrative monetary penalty is $374,474 per violation or twice the value of the transaction, whichever is greater. This is adjusted annually for inflation.
- OFAC civil penalties for export violations can reach up to $65,000 per violation, and in some enforcement cases, the total settlements have exceeded millions of dollars for large corporations.
- Certain legislative proposals as of late 2025 suggest fines may be increased in the future to up to $1.2 million or four times the transaction value, whichever is greater.
Enforcement Trends and Compliance Consequences
- Enforcement has focused on highly sensitive sectors such as semiconductors, defense technology, advanced software, and aerospace. Multi-million dollar penalties, export privilege suspensions, compliance audits, and mandatory employee training have become standard elements of settlement agreements.
- These actions signal a concerted effort by U.S. agencies to deter companies from exporting sensitive technology to adversary nations, with steep penalties and ongoing monitoring requirements
Jeffrey Newman is a whistleblower lawyer, whose law firm represents whistleblowers revealing violations of export controls, tariff evasions, money laundering, healthcare fraud and other kinds of WB cases. The firm represents individuals both in the United States and other countries. Mr. Newman and his firm also represent physicians and other healthcare providers who become whistleblowers in healthcare fraud cases. Whistleblower laws in the U.S. allow individuals anywhere with information about export control violations or tariff fraud to reveal the information under The False Claims act or through the Securities and Exchange Commission’s Whistleblower Program. The Firm’s website is at www.JeffNewmanLaw.com and attorney Newman can be reached at Jeff@Jeffnewmanlaw.com or at 978-880-4758
