H.R. 5853, a bill to amend the Export Control Reform Act of 2018 to increase the civil penalties that may be imposed under such Act

H.R. 5853 would increase the maximum civil monetary penalties the Bureau of Industry and Security (BIS) could impose for violations of the Export Control Reform Act of 2018. Under current law, civil monetary penalties for export control violations are capped at the greater of $374,474 or the amount that is twice the value of the transaction that is the basis of the violation. H.R. 5853 would increase those caps to $1.2 million or the amount that is four times the value of the transaction.

The vast majority of civil penalties that BIS imposes are nonmonetary, such as the temporary denial of export privileges. Over the 2019-2025 period, BIS reported that it had assessed 40 civil monetary penalties on entities that had violated export license requirements. The bureau collected an annual average of about $70 million in revenues from civil penalties over that time period. Of those cases, there were two instances in which BIS imposed the maximum civil penalty allowed under current law. On the basis of the amount of the transactions that caused the violations and the penalties imposed under the limits in current law, CBO estimates that increasing the cap on civil penalties that could be imposed on export law violators would increase revenues by $55 million over the 2026‑2036 period.

The estimated budgetary effects of the legislation are shown in Table 1.

CBO’s estimate of the budgetary effects of H.R. 5853 is subject to uncertainty regarding the amount that BIS would assess under the increased caps for civil monetary penalties. Revenues could be more or less depending on how the number of violations and their associated penalties differ from CBO’s estimate.

The CBO staff contact for this estimate is Aldo Prosperi. The estimate was reviewed by Christina Hawley Anthony, Deputy Director of Budget Analysis.