The Bureau of Industry and Security is considering several major changes to its administrative enforcement authorities, including publicizing its charging letters before cases are resolved and increasing penalty amounts for export violations. The agency may also limit its use of no admit/no deny settlements, which allow companies to avoid admitting explicit wrongdoing.
The Bureau of Industry and Security on May 13 opened registration for its annual export controls conference, with this year's theme of "Building a Network of Global Cooperation." The agency released information on the agenda, including what topics will be discussed. The conference will be held June 29 - July 1 in-person at the Marriott Marquis in Washington, D.C. Some portions of it also will be available virtually.
Companies need to stay on top of their compliance because significant escalation of Russia-related sanctions is possible, KPMG experts said. The "dramatic increase in the use of sanctions and other controls" over the past two months will likely continue to expand in complexity, said Jason Rhoades, KPMG senior manager-trade and customs services, during a May 11 webinar. Because Russian behavior toward Ukraine has not changed, "we expect [the use of sanctions] to continue to grow," Rhoades said. "There is significant room still out there for [sanctions] escalation."
The U.S. should take steps to address a range of loopholes in its export control regimes, including its inability to conduct end-use checks in China and unregulated technology transfers resulting from outbound investments, said Nazak Nikakhtar, former acting head of the Bureau of Industry and Security. “We have a lot of gaping holes in our export control system,” Nikakhtar told the Senate Intelligence Committee May 11. “I think we really need to tighten those up.”
Companies should expect the Commerce Department to add more entities to the Entity List for aiding Russia amid its war in Ukraine, said Thea Kendler, the agency’s assistant secretary for export administration. Commerce has so far added more than 100 entities to the list for supporting the Russian and Belarusian militaries (see 2204040006). Kendler, speaking during a May 12 Materials and Equipment Technical Advisory Committee meeting, said the agency is looking at entities in both Russia and Belarus "that may be contributing to the military industrial complex."
The Bureau of Industry and Security this week extended by a month a public comment period to allow more time for feedback on the U.S.-EU Trade and Technology Council's Secure Supply Chains Working Group. BIS said it wants to allow commenters to “take into account any developments or announcements that may occur” during the TTC’s upcoming meeting in France May 15-16. Comments, originally due May 23 (see 2204050012), are now due by June 23.
The Transportation and Related Equipment Technical Advisory Committee is considering asking the Bureau of Industry and Security for more Russian export control guidance and is hoping to help address the agency's backlog of military end-user license applications, said committee Chair Ari Novis, chief global trade officer for Pratt & Whitney.
The Commerce Department is working with allies to create a new multilateral export control enforcement coordination mechanism to better tighten gaps in global export control regimes, said Matthew Axelrod, the agency’s lead export enforcement official. Axelrod said more enforcement cooperation can strengthen the effectiveness of the controls, particularly for Russia-related restrictions.
The U.S., the EU and the other G-7 members on May 9 announced a series of new sanctions and restrictions on Russia, including a ban on providing certain business management services to the country and a commitment to phase out imports of Russian oil. New U.S. restrictions include broader export controls and sanctions targeting Russian banking executives, a weapons manufacturer and state-owned media.
The University of Pennsylvania posted presentation materials from the first and second day of its annual University Export Control Conference last week. The materials include agency update presentations from the Bureau of Industry and Security, the Directorate of Defense Trade Controls, the Office of Science and Technology Policy and other government agencies. Among the presentation materials are ones on foreign influence investigations, implementing a research security program and how to construct an export control program in a university setting.