Tag Archives: Adam M. Smith

BIS Final Rule on Voluntary Self-Disclosure Process and Penalty Guidelines Highlights Significant Export Control Violations and Higher Penalties

by Christopher Timura, David Burns, Adam M. Smith, Stephenie Gosnell Handler, Samantha Sewall, Cody Poplin, Chris Mullen, and Audi Syarief

Top left to right: Christopher Timura, David Burns, Adam M. Smith, and Stephenie Gosnell Handler.
Bottom left to right: Samantha Sewall, Cody Poplin, Chris Mullen, and Audi Syarief. Photos courtesy of the authors.

In a final rule effective September 16, 2024, the Department of Commerce’s Bureau of Industry and Security (“BIS”) updated its process for handling voluntary self-disclosures from industry and expanded its discretion to impose higher monetary penalties for violations of export control laws. Whether to submit a voluntary self-disclosure remains a fact-dependent decision and requires careful weighing of factual, legal, practical and policy considerations.

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United States Expands Sanctions Authorization of Internet-Based Activities in Wake of Protests in Iran

by Judith Alison Lee, Adam M. Smith, Stephenie Gosnell Handler, Audi Syarief, and Samantha Sewall.

On September 23, 2022, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued General License D-2 (“GL D-2”), expanding a prior authorization to further facilitate the free flow of information over the internet to, from, and among residents of Iran. GL D-2 authorizes the exportation to Iran of certain services, software, and hardware incident to the exchange of internet-based communications. GL D-2 supersedes and replaces an existing license, General License D-1 (“GL D-1”), that had been in place without update for over eight years. According to the Treasury Department, the updated license is designed to bring the scope of the license in line with modern technology and ultimately to expand internet access for Iranians, providing them with “more options of secure, outside platforms and services.” As noted below, even though GL D-2 certainly expands upon the types of software and services allowed to be exported, one of its principal effects will likely be the enhanced comfort parties may have in providing such technology to Iran. GL D-1 was often not fully leveraged by the exporting community that was concerned about the extent of coverage. GL D-2 is an evident attempt to right this balance, making sure that exporters remain aware of limitations while also providing more certainty to those who wish to leverage the exemption. Continue reading →

China Constricts Sharing of In-Country Corporate and Personal Data Through New Legislation

by Patrick F. Stokes, Oliver Welch, Nicole Lee, Ning Ning, Kelly S. Austin, Judith Alison Lee, Adam M. Smith, John D.W. Partridge, F. Joseph Warin, Joel M. Cohen, Ryan T. Bergsieker, Stephanie Brooker, John W.F. Chesley, Connell O’Neill, Richard Roeder, Michael Scanlon, Benno Schwarz, Alexander H. Southwell, and Michael Walther

The People’s Republic of China is clamping down on the extraction of litigation- and investigation-related corporate and personal data from China—and this may squeeze litigants and investigation subjects in the future.  Under a new data security law enacted late last week and an impending personal information protection law, China is set to constrict sharing broad swaths of personal and corporate data outside its borders.  Both statutes would require companies to obtain the approval of a yet-to-be-identified branch of the Chinese government before providing data to non-Chinese judicial or law enforcement entities.  As detailed below, these laws could have far-reaching implications for companies and individuals seeking to provide data to foreign courts or enforcement agencies in the context of government investigations or litigation, and appear to expand the data transfer restrictions set forth in other recent Chinese laws.[1]

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To Disclose or Not to Disclose: Analyzing the Consequences of Voluntary Self-Disclosure for Financial Institutions

by F. Joseph Warin, M. Kendall Day, Stephanie L. Brooker, Adam M. Smith, Linda Noonan, Elissa N. Baur, Stephanie L. Connor, Alexander R. Moss, and Jaclyn M. Neely.

One of the most frequently discussed white collar issues of late has been the benefits of voluntarily self-disclosing to the U.S. Department of Justice (“DOJ”) allegations of misconduct involving a corporation.  This is the beginning of periodic analyses of white collar issues unique to financial institutions, and in this issue we examine whether and to what extent a financial institution can expect a benefit from DOJ for a voluntary self-disclosure (“VSD”), especially with regard to money laundering or Bank Secrecy Act violations.  Although the public discourse regarding VSDs tends to suggest that there are benefits to be gained, a close examination of the issue specifically with respect to financial institutions shows that the benefits that will confer in this area, if any, are neither easy to anticipate nor to quantify.  A full consideration of whether to make a VSD to DOJ should include a host of factors beyond the quantifiable benefit, ranging from the likelihood of independent enforcer discovery; to the severity, duration, and evidentiary support for a potential violation; and to the expectations of prudential regulators and any associated licensing or regulatory consequences, as well as other factors.  Continue reading →