The Criminal Division’s Fraud Section of the Department of Justice (“DOJ”) published  an “Evaluation of Corporate Compliance Programs” (the “Compliance Manual”) which offers guidance on the common questions contemplated by the agency when making  determinations of corporate liability. My primary take away is that the Compliance Manual puts management on notice that the company will now be held to a higher standard regarding the details of its compliance program. (more…)

A D.C. Circuit Court of Appeal’s panel recently issued a key opinion affirming the U.S. Treasury Department’s broad ability to enforce sanctions regulations through its Office of Foreign Assets Control (“OFAC”).  While the court ultimately set aside a $4.07 million penalty, the decision established critical precedent for export compliance and future OFAC enforcement actions.  Significantly, the court ruled that OFAC does not have to prove that a company’s exports actually reached a sanctioned destination in order to impose penalties for sanctions violations. Rather, OFAC simply has to show that a company knew or had reason to know that through its third-party distributor, the company’s exported goods would ultimately end up in a sanctioned country.  (more…)

The Trump Administration has implemented regulatory changes to continue its predecessors’ decade-long efforts to streamline requirements for exporters and importers. One such project, dubbed the International Trade Data System or ITDS, seeks to modernize and streamline procedures and required government paperwork for exporters and importers while eliminating redundant requirements. This process began in 2006 under George W. Bush when legislation was passed calling for the creation of a single electronic system that would serve as a one stop shop for the government agencies and businesses involved in international trade to exchange necessary documentation. (more…)

We are 100 days into the Trump Administration and  the question is not what did President Trump promise and what did he do, the question is how should business prepare for the future?    Let’s begin with a “State of the Union” so we can evaluate our next steps. On some policy issues President Trump did follow the lead of the last Administration.  The Trump Administration has implemented regulatory changes to continue its predecessors’ decade-long efforts to streamline regulatory requirements for exporters and importers.   One such project will modernize and streamline procedures and paperwork that must be filed with government agencies and eliminate redundant requirements for exporters and importers. His willingness to stay the course on this practical initiative as well as on more controversial issues like relations with Cuba, Iran, and China, suggests that President Trump may develop into a more cautious chief executive. (more…)

You may not have heard of the Office of Export Enforcement (OEE), but if you or your subsidiary are doing business abroad, you should take note. Last month, the OEE, which is part of the Department of Commerce’s Bureau for Industry and Security (BIS), raided the U.S. headquarters of a company whose European subsidiary is suspected of violating U.S. export control and sanctions laws. (more…)

On March 7, we learned that Zhongxing Telecommunications Equipment Corporation (ZTE) concluded 3 settlement agreements that could result in penalties as high as $1.2 billion for its violations of U.S. sanctions and export controls laws. Although the amount of the fines results from particularly egregious conduct on the part of ZTE to conceal its violations even during the period of investigation,  the case highlights three valuable lessons for all exporters. This is especially true given Secretary of Commerce Wilbur Ross’s pronouncement that the case signals the new Administration will be “aggressively enforcing strong trade policies with the dual purpose of protecting American national security and protecting American workers.” (more…)

I was fortunate enough to be on a panel last week with four foreign government representatives to discuss trade. The meeting was informative and I thought I would share my take-aways. My conclusion is that Trump’s trade policy is headed towards a more balanced trade agenda. Although there are some anti-free traders in the inner circle, there are also proven free traders who are simply looking to make trade more fair. (more…)