Category Archives: Ukraine Conflict

A Whole New National Security Ballgame: Key Practical Takeaways for Export Control Compliance from the 2024 BIS Update Conference

by Brent Carlson and Michael Huneke

Photos of the authors.

From left to right: Brent Carlson and Michael Huneke (Photos courtesy of authors)

On March 27–29, 2024, the U.S. Department of Commerce’s Bureau of Industry & Security (“BIS”) hosted an Update Conference on Export Controls & Policy. The event was a major outreach effort by the U.S. government. Nearly 100 BIS and other U.S. agency officials engaged with 1,200 attendees over three days.

As was appropriate for an event coinciding with Opening Day of the U.S. Major League Baseball season, BIS officials emphasized that they—and those they regulate—are playing a whole new national security ballgame. This theme ran through every topic. It also drives the key practical takeaways that we highlight below for in-house compliance professionals assessing evasion and diversion risks and responding to reports of the same—particularly reports that some U.S. companies recently received directly from the U.S. government. Continue reading →

Monitoring What Matters: A Fresh Look Proposal to Government and Industry for How Post-Resolution Oversight Can Best Deny Hostile Actors the Means to Cause Deadly Harm

by Brent Carlson and Michael Huneke

Photos of the authors.

From left to right: Brent Carlson and Michael Huneke (Photos courtesy of authors)

U.S. economic sanctions and export controls serve a wide range of national security interests. When hostile actors rely on U.S.-designed or -manufactured components in weapons used in fatal attacks on U.S. and coalition military personnel and civilian populations, there is an acute need to quickly identify the illicit trade flows and stop those components from reaching the battlefield. Continue reading →

“Expect Some Illumination”: A Fresh Look at U.S. Congressional Hearings in the Era of Sanctions and Export Controls as the New FCPA

by Brent Carlson and Michael Huneke

Photos of the authors.

From left to right: Brent Carlson and Michael Huneke (Photos courtesy of authors)

The 118th U.S. Congress has taken an active and bipartisan interest in U.S. sanctions and export controls. With reports that U.S. executives have been asked to testify before the U.S. House Select Committee on the Chinese Communist Party[1] and recent hearings before a U.S. Senate subcommittee previewing further questions for both companies and regulators,[2] U.S. companies whose products might require a license for export to China or that might be found in Russian or Iranian weapons should prepare for congressional scrutiny—and congressional pressure on the U.S. Executive Branch departments to deliver enforcement results. Continue reading →

How Not to Stand Out Like a Sore Thumb (Part 2): A Fresh Look at the “High Probability” Definition of Knowledge Applied to Export Controls and Sanctions Enforcement

by Brent Carlson and Michael Huneke

Photos of the authors.

From left to right: Brent Carlson and Michael Huneke (Photos courtesy of authors)

Media coverage concerning the widespread use of U.S. or Western microelectronics in recovered Russian- or Iranian-manufactured missiles and drones is putting pressure on governments, manufacturers, and exporters to consider ways to reduce more effectively the flows of such items to prohibited end-users. Even considering that many of the items are ubiquitous consumer electronics, the discovery of such items after mass-casualty events—including fatalities—on the front lines puts manufacturers and exporters on the front pages and in the crosshairs of U.S. regulators, prosecutors, media, and congressional committees. However the items arrived on the battlefield, their presence begs the questions of how and through whom they arrived. Continue reading →

How Not to Stand Out Like a Sore Thumb (Part 1): A Fresh Look at the “Willful” Intent Standard for Criminal Liability in Export Controls and Sanctions Corporate Enforcement

by Brent Carlson and Michael Huneke

Photos of the authors.

From left to right: Brent Carlson and Michael Huneke (Photos courtesy of authors)

“The ‘willfulness’ standard for criminal prosecutions appears nearly insurmountable to reach.”

So concluded a “90-Day Review Report” issued January 2, 2024 by the Chairman of the Foreign Affairs Committee of the U.S. House of Representatives, following congressional hearings in May and December 2023.[1] The report further contended that “the statutory requirement to prove ‘willfulness’” for there to be a criminal violation of U.S. export controls (and sanctions) is a “high bar” that “often results in [the Department of Commerce’s Bureau of Industry & Security (“BIS”)] export enforcement personnel pursuing administrative enforcement actions with lower penalties,” compared to the alternative (unstated but implied by the report) of U.S. Department of Justice (“DOJ”) personnel pursuing criminal penalties.[2]

This conclusion is not accurate. BIS is not itself responsible for criminal enforcement, yet it has partnered closely with the DOJ’s National Security Division—including by co-leading the inter-agency Disruptive Technology Strike Force launched on February 16, 2023—to bring several high-profile convictions or resolutions. Nor is the requirement to prove willfulness “insurmountable” for U.S. federal prosecutors, whose cases achieve the standard regularly and can do so not only with direct evidence of intent but also indirect evidence, i.e., the relevant facts and circumstances. Such facts and circumstances often—especially in the eyes of jurors—make the willful nature of criminal evasion schemes stand out like a sore thumb. Continue reading →

Russia Sanctions After One Year: United States Imposes New Round of Restrictions

by Mark Chalmers, Billy Hicks, Kendall Howell, Paul D. Marquardt, Will Schisa, Daniel P. Stipano, and Charles Marshall Wilson

Photos of the authors

Top row from left to right: Mark Chalmers, Billy Hicks, and Kendall Howell. Bottom row from left to right: Paul D. Marquardt, Will Schisa, Daniel P. Stipano, and Charles Marshall Wilson. (Photos courtesy of Davis Polk & Wardwell LLP)

One year after Russia’s invasion of Ukraine, the United States and its allies imposed a new round of sanctions targeting Russia’s metal, mining, and banking sectors and signaled an increased focus on enforcement.

On February 24, 2023, the United States and its allies marked the one-year anniversary of Russia’s invasion of Ukraine with a new round of sanctions and export control restrictions targeting Russia’s economy and financial system. Consistent with the U.S. sanctions response from the outbreak of the conflict, the latest round of sanctions focused on Russia’s banking sector and export-oriented industries –adding several major Russian financial institutions to the SDN List and targeting Russia’s metal and mining sector. On the same day, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) released new rules significantly expanding and modifying the export control restrictions applicable to Russia and Belarus, which may require exporters to re-examine their processes for product classification.

Continue reading →