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.”
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The Bureau of Industry and Security issued a temporary denial order this week against two Russian nationals, their Florida company, a Maldives business and a Russian airline for a scheme to illegally supply aviation parts to Russia. Oleg Sergeyevich Patsulya and Vasilii Sergeyevich Besedin used their Florida-based company MIC P&I to try to export to Russia more than $2 million worth of U.S. aircraft components, including Goodrich brake assemblies, in a procurement network that went through Intermodal Maldives and eventually to Russia’s JSC Smartavia Airlines.
The Bureau of Industry and Security extended by 30 days its public comment period for an information collection relating to technology letters of explanation (see 2303070026). The letters provide the agency with a description of a technology in a license application, allowing BIS technical staff to "evaluate the impact of licensing the export on United States national security and foreign policy.”
The Bureau of Industry and Security again renewed the temporary denial order for Russia's Rossiya Airlines, saying the company has continued to illegally operate planes in violation of U.S. export controls, including on flights into and out of Russia going to and from Egypt and Turkey. The agency renewed the denial order for another 180 days from May 12. BIS first suspended the export privileges of the airline in May 2022 (see 2205200008) and renewed the TDO in November (see 2211170050).
The House Foreign Affairs Committee could soon consider legislation that would harmonize various U.S. sanctions lists in a bid to help agencies better reach consensus when reviewing export license applications. Rep. Michael Waltz, R-Fla., said the Commerce Department has an outsized vote in adjudicating applications of sensitive exports and should be required to more carefully weigh input from other agencies, including the Defense and State departments.
The Bureau of Industry and Security this week suspended the export privileges of five people, including four for illegal exports of guns or ammunition and one person for illegally exporting services to North Korea.
The Bureau of Industry and Security needs much more funding to carry out its export control work, lawmakers and former officials said during a House hearing this week. Kevin Wolf, a former senior official at BIS, said Congress should consider doubling -- perhaps quadrupling -- the agency’s resources.
A former Pentagon official expected to testify before Congress May 11 said U.S. officials for years have “refused” to fix failures in its export control system that allow China to acquire sensitive technologies. Stephen Coonen, who spent nearly 14 years in the Defense Technology Security Administration, including as its senior foreign affairs adviser for China, said he resigned from the agency in 2021 to protest the Bureau of Industry and Security’s “willful blindness” surrounding its export policies.
Although the U.S. continues to impose new sanctions and export controls against Russia, the Commerce Department’s $300 million penalty assigned to Seagate Technologies last month signals that the U.S. is increasingly prioritizing enforcement, particularly against China, law firms said this month. They also said the fine shows that Commerce is looking to strictly enforce its foreign direct product rule restrictions, even for violations of the rule that may not be obvious.