Justice Department declines prosecution of Bosch in China export control case

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Bosch China export case

Highlights

U.S. Department of Justice declines prosecution of Robert Bosch GmbH under its Corporate Enforcement and Voluntary Self-Disclosure Policy, marking the National Security Division's first such declination.
Bosch agrees to disgorge $11,430,098 in profits from unauthorized China exports, partially offset against a $36,184,680 parallel civil fine by the Department of Commerce.
From September 2020 to September 2024, Bosch subsidiaries exported over $70 million in sensor products and software to Entity-listed Huawei without required U.S. authorization, prompting compliance reforms.

Enforcement decision under corporate policy

As announced by the U.S. Department of Justice, the department declines to prosecute Robert Bosch GmbH under its Corporate Enforcement and Voluntary Self-Disclosure Policy, resolving an investigation into shipments of products and software to an Entity-listed company in China. The department says the matter marks the first time the National Security Division has issued a declination under that policy.

The decision follows Bosch's prompt disclosure of the conduct to the National Security Division, full cooperation with investigators and remediation steps that the department says are timely and appropriate. Bosch agrees to disgorge $11,430,098 in profits from the transactions, with part of that amount credited toward a $36,184,680 fine paid in a parallel civil action by the Department of Commerce.

Assistant Attorney General for National Security John A. Eisenberg says the outcome shows the benefits for companies that quickly disclose potential violations and assist investigations. Assistant Secretary of Commerce for Export Enforcement David Peters says the settlement also reflects the Bureau of Industry and Security's effort to pair strong enforcement with incentives for voluntary disclosures of past violations.

Sales to Huawei and compliance shortcomings

Between September 2020 and September 2024, Bosch, through two non-U.S. subsidiaries, exports more than $70 million of foreign-produced sensor products and software to Huawei Technologies Co., Ltd. and affiliates on the Entity List, including Huawei Tech. Investment Co. Ltd. Hong Kong, without the required U.S. authorization, according to the department. The subsidiaries identified are Bosch Sensortec GmbH and ETAS GmbH, and the items are subject to the Export Administration Regulations under the Entity List Foreign Direct Product Rule for entities designated with Footnote 1.

The investigation finds Bosch's trade compliance personnel are not adequately equipped to give accurate guidance on the foreign direct product rule, contributing to several years of violations. The department also says sales continue despite missed opportunities when third parties flag potential applications of the rule to products or equipment used in related services.

To remediate the misconduct, Bosch makes organizational changes, imposes disciplinary measures, adds staff to its trade compliance organization, expands its U.S. trade compliance resources and updates internal policies and procedures. The case is prosecuted by Trial Attorney Maria Fedor of the National Security Division's Counterintelligence and Export Control Section, with investigative assistance from the Department of Commerce's Bureau of Industry and Security.

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