The Treasury Department could use more resources and needs to better recruit and retain employees to implement and enforce its sanctions programs, said Brian Nelson, the agency’s undersecretary for terrorism and financial intelligence. Nelson, speaking during a law conference in Washington last week, said the agency is specifically looking to hire more officials to help it grapple with how best to apply sanctions in the virtual assets space and other emerging industries, including around artificial intelligence.
DOJ and Commerce Department are increasingly looking to impose large penalties for significant export control and sanctions violations as part of a mission to incentivize more voluntary disclosures, said Matthew Olsen, DOJ’s assistant attorney general for national security. Olsen, whose agency and Commerce co-lead the new Disruptive Technology Strike Force, said he recently “made a couple of trips to companies directly” to speak with them about their compliance programs, and is hoping to “encourage” them to submit disclosures.
The U.S. announced a host of new Russia-related sanctions and export controls last week, including more than 300 sanctions designations by the Treasury and State departments and an expansion of Commerce Department export controls on items destined to Russia and entities supporting the country’s military. The measures, some of which were coordinated with allies as part of the Group of 7 summit in Japan, aim to “further undermine Russia’s capacity to wage its illegal aggression” in Ukraine, the G-7 countries said in a May 19 joint statement.
The Bureau of Industry and Security fined a United Arab Emirates company $283,500 for failing to report boycott requests in violation of BIS’ antiboycott regulations. Dubai-based Regal Beloit FZE, a subsidiary of U.S. manufacturer Regal Beloit America, didn’t report 84 requests from a Saudi Arabian customer to stop importing Israeli goods “in fulfillment” of the customer’s purchase order, BIS said.
The Office of Foreign Assets Control reached a $3.3 million settlement this week with a California-based skincare company and a $175,000 settlement with its former unnamed senior executive for illegal exports to Iran in violation of U.S. sanctions. Murad, owned by multinational company Unilever, worked with distributors in Iran and the United Arab Emirates to ship goods to Iran, leading to at least 62 exports worth more than $11 million, OFAC said.
The U.S. is preparing to roll out a “substantial package” of new sanctions and export controls against Russia for its war in Ukraine, including by adding about 70 new entities to the Commerce Department’s Entity List and introducing more than 300 new financial sanctions against people, entities, vessels and aircraft, a senior administration official said. The measures, which will be coordinated alongside allies as part of the Group of 7 summit in Japan May 19-21, are aimed at closing “loopholes” used by Russia to evade sanctions and “extensively restricting categories of goods key to the battlefield,” the official said during a May 18 call with reporters.
The Committee on Foreign Investment in the U.S. is mitigating more investment deals and is hiring more staff to manage its increasing workload, said Paul Rosen, head of CFIUS. Rosen also said the committee is assessing more violations for breaches of mitigation agreements and is “for the first time” beginning to receive voluntary self-disclosures.
Both outbound and a new approach for the Committee for Foreign Investment in the U.S. drew attention at a recent hearing of the House Select Committee on the Chinese Communist Party, and the chairman of the committee suggested that limiting investment screening to active investors, such as venture capital firms, is not enough.
The European Commission this week proposed to reform its customs system, including by creating a single interface called the EU Customs Data Hub that will allow for the submission of all customs information on imports. Under the plan, the EU also would create an EU Customs Authority, which it said would boost cooperation between customs surveillance and law enforcement authorities at the EU and member state level, and would eliminate the de minimis threshold for imports under $162.
A series of export control indictments announced this week, including several for illegal shipments to China and Russia, only scratched the surface of prosecutions expected to be brought as part of the new Disruptive Technology Strike Force, said Matthew Axelrod, the Bureau of Industry and Security's top export enforcement official. “It’s just the beginning,” Axelrod said during a May 17 law conference hosted by the American Bar Association, Mayer Brown and American University. “I think you can expect to continue to see actions come out from the strike force as this work continues.”