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Export/Import Controls and Sanctions

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This year, we have witnessed an extraordinary set of coordinated economic sanctions and export control regulatory actions against Russia after its invasion of Ukraine. In contrast to the fast and furious pace of regulatory action, enforcement actions did not keep pace.

This year’s enforcement actions by the US Treasury Department’s Office of Foreign Assets Control (OFAC) are notable for their jurisdictional reach and expansion of liability theories that aren’t necessarily supported by the plain language of their regulatory authority. The Commerce Department’s Bureau of Industry & Security (BIS) enforcement actions have targeted the aerospace industry, especially in relation to Russia and Belarus. The Department of Justice (DOJ) expended much of its resources on seizing and forfeiting assets linked to Russian oligarchs, galvanizing its multilateral networks.

Interestingly, OFAC continued to target the Iranian petroleum and petrochemical sector despite news reports of intensive negotiations to revive the Joint Comprehensive Plan of Action (JCPOA).

Below we discuss some representative enforcement actions to date.…

Continue Reading What to Expect Next? US Economic Sanctions and Export Controls Enforcement Actions Thus Far in 2022

Following a wait of almost five years and expedited due to the UK sanctions announced against Russia, on March 1, 2022, the Economic Crime (Transparency and Enforcement) Bill (the Economic Crime Bill) was laid before the UK Parliament.

The provisions of the Economic Crime Bill will need to be debated in Parliament but, if passed into law, will amongst other things:

  • enhance existing powers in relation to unexplained wealth orders (UWOs);
  • increase the transparency over ownership of companies and property in the UK by introducing a Register of Overseas Entities (ROE) to require foreign owners of UK property to reveal their full identities;
  • impose a strict civil liability test for monetary penalties, meaning the UK Office for Financial Sanctions Implementation (OFSI) would no longer be required to evidence that organizations had knowledge or a “reasonable cause to suspect” sanctions are being breached before being liable for fines; and
  • give new powers to OFSI to publicly identify organizations that breach financial sanctions irrespective of whether or not they are the subject of a penalty.

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Continue Reading A New ‘Economic Crime Bill’ in the United Kingdom to Strengthen Existing Economic Crime Laws

In its 2019-2020 Annual Report (the Report), the UK’s sanctions office (the UK Office of Financial Sanctions Implementation (OFSI)) revealed that, between April 2019 and March 2020, it had received 140 voluntary disclosures of potential sanctions violations related to transactions worth a total of £982 million.  This represents a record number of reports, and an…

The US Department of Homeland Security’s Customs and Border Protection agency (CBP) announced on September 14 the issuance of five new withhold release orders (WROs) on entities allegedly using forced labor in or from China’s western Xinjiang Uyghur Autonomous Region (XUAR). The WROs bar the import into the United States of various goods alleged to…

The Trump administration is considering a ban on US imports of Xinjiang-origin cotton and other products due to allegations of widespread forced labor. The scope of the possible restrictions has not been made public but credible reporting suggests that it could include cotton and tomato products from the Xinjiang Uyghur Autonomous Region (XUAR) or wider…

Global settlements, Part 5 of this series, require careful attention by counsel and parties in parallel proceedings. A global settlement may include just one settlement agreement, but is more likely to include multiple settlement agreements with different government agencies (including foreign ones) that are coordinated. The goal is to ensure that the overall impact of the settlement terms or penalties imposed is fair to each agency’s interests based on the specific circumstances of the enforcement action, but not ruinous to the company.

To ensure a good foundation for pursuing a global settlement, it is crucial to understand the topics covered in Parts 1-4 of this series:

  1. We identified the potentially relevant US government agencies (and the possibility of non-US government agency involvement) in Part 1;
  2. In Part 2, we discussed how the investigation may be impacted by the involvement of multiple agencies;
  3. We provided guidance on voluntary self-disclosures (VSDs) to those agencies in Part 3; and
  4. In Part 4, we covered the management of interagency communication.

As we previously noted, each agency has different authorities, powers, priorities, and timing; and all of these should be factored into the global settlement discussions. Continuous communication during the investigation can help identify each agency’s interests and priorities.…

Continue Reading US Export Controls and Economic Sanctions Investigations: The Perils of Parallel Proceedings (Part 5 of 5, Global Settlements)

Once multiple agencies are engaged in a US export control or sanctions enforcement action, or you’ve determined they should be, counsel should consider how to communicate with these agencies, both individually and together. Not only will such discussions provide valuable insight to guide the conduct of the internal investigation, it could provide information about the government investigation, and could also facilitate a global resolution. Part 4 of our series on parallel proceedings discusses why counsel might seek the role of communication coordinator amongst the agencies, and how and when to do so.

Which agencies might be involved in this communication were identified in Part 1 of our series on parallel proceedings. We discussed how the involvement of multiple agencies might impact the investigation in Part 2, and we provided guidance on voluntary self-disclosures (VSDs) to those agencies in Part 3. There are opportunities to engage with the relevant agencies at various points in the investigation, all of which should be considered and carefully structured.…

Continue Reading US Export Controls and Economic Sanctions Investigations: The Perils of Parallel Proceedings (Part 4, Managing Interagency Communication)

This third post in our parallel proceedings series discusses how to reconcile the conflicting requirements of making voluntary self-disclosures (VSDs) to multiple agencies. We listed the relevant agencies in our first post, all of whom may be interested in a VSD, depending on the potential violations. In our second post, we discussed how to structure an investigation that involves those agencies. While none of these agencies imposes an absolute requirement to voluntarily disclose a violation (with limited exceptions where disclosure is required), they all offer significant benefits for doing so.

Where more than one agency is involved, disclosure of violations to each of the relevant agencies should be done simultaneously, including the Department of Justice (DOJ) if there is or appears to be potential willfulness or intent. When making the decision to disclose, the company should also consider any potential violations in related subject areas (i.e., anti-money laundering, customs, or anti-bribery and corruption laws).…

Continue Reading US Export Controls and Economic Sanctions Investigations: The Perils of Parallel Proceedings (Part 3, Voluntary Disclosures)

In our first post in this series, we described the different agencies that could be involved in an investigation of export controls and sanctions violations, noting that the agencies have overlapping jurisdiction but different enforcement priorities, authority, requirements, and penalties.

In this post, we focus on how the potential involvement of multiple agencies in an investigation of export controls and/or economic sanctions will impact the way the investigation proceeds, its scope, and its underlying strategy. Ultimately, the goal should be a unified internal investigation that is appropriately scoped and undertaken to satisfy all the interested agencies, i.e., one and done.…

Continue Reading US Export Controls and Economic Sanctions Investigations: The Perils of Parallel Proceedings (Part 2: Investigation Strategy)

Institutions of Higher Education are increasingly finding themselves in the crosshairs of high-profile criminal enforcement efforts. Recent headlines have highlighted a number of investigations and prosecutions that have achieved literal celebrity status:

  • The indictments and convictions of wealthy parents of college applicants in the Varsity Blues investigation, who are alleged to have paid bribes in

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