Compliance With an Expanded FDP Rule to Target Russia Would Be 'Challenging,' Lawyer Says
Companies could face a variety of compliance challenges if the U.S. expands its foreign direct product rule to capture exports to Russia, Cooley's Annie Froehlich, an export control lawyer, said in a Feb. 3 Atlantic Council blog post. The U.S. has reportedly considered using the rule if Russia further invades Ukraine, which could limit Russia’s ability to import certain foreign-produced chips, integrated circuits and microprocessors, the post said. “If regulatory actions are imposed, assessing exposure and implementing appropriate compliance responses will be challenging.”
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Companies would need to assess all their supply chain activities for “possible U.S. touchpoints,” the post said, “ensure that their products, technologies, and software are properly export-classified, and determine if their activities directly or indirectly involve targeted parties.” She specifically said export classification can be “technically complex.”
The Biden administration said it’s preparing a wide range of export controls with allies in response to a potential invasion, including restrictions on both U.S. and foreign-produced technology inputs (see 2201250042). But the administration also said the restrictions won’t amount to an embargo against “everyday” Russian consumers, and will instead target Russia's industrial capabilities and production capacity (see 2201270049).