BIS: Expect more Trophy Cases

The primary focus of Commerce's export enforcement activities this year will be high-profile cases coordinated with other agencies, both in the US and in league with allied counterparts.

In a discussion sponsored by Baker McKenzie January 30, Assistant Secretary for Export Enforcement Matt Axelrod shared his thoughts on the evolving state of Export Control, and his expectations for the coming year.

Disclosure of Violations

Mr. Axelrod discussed the development of enforcement resources and collaborations, and noted the importance of motivating compliance and self-disclosure.  "If we find out about it, when we're figuring out what the right penalty is, we're going to consider it an aggravating factor that you chose not to come tell us," he cautioned, noting also the establishment of rewards for third-party reporting.  "if you ever get in trouble with us for something, you know, even completely unrelated down the line, we will remember that you were extremely cooperative in this instance."

"Since we put these policies in place, we've gotten. 80% more voluntary self disclosures for potentially significant violations and we've gotten a third more tips than we had for the same time period the prior year. Those are really interesting stats and and gives us some insight."

More High Profile Cases

"The first priority is to bring enforcement cases through the Disruptive Technology Strike Force.  You can expect to see more Strike Force cases, and you can expect to see some additional 'significant' cororate resolutions in 2024. 

"It's a cost benefit decision for companies whether to spend the money on compliance. And sometimes having some big corporate resolutions, where companies see what the consequences are when our rules are violated, maybe when folks haven't fully invested in compliance. I think that can be useful too."

Anti Boycott & Freight Forwarder Policy Changes

"We're going to continue to strengthen our enforcement policies...additional policy rollout when it comes to our anti boycott enforcement. And then I we're also anticipating putting out some guidance for freight forwarders in the not too distant future. 

Multilateral Partnerships

"The third thing I think you can expect is a continued strengthening of our partnerships, particularly the the multilateral ones. The G7, the E5, the the disruptive technology protection network with Japan and South Korea, with the European Commission. I think all of those are  going to continue to press forward, full steam ahead."

Two Tips

"I have two tips and then three specific resources. So the two tips are,

• One, because the world is changing, you need to make sure you have a strong export compliance program. And for, you know, major multinationals, that may seem obvious, but. Even what you had in place before, I think you're going to want to review to make sure it is fit for purpose given the way the world is now and for those that don't, you want to make sure for smaller companies you want to make sure that that you that you put one in place.
• The second thing I would say and it's related is  to the extent companies felt that, hey, compliance, that's a fairly, you know, technical regulatory area and I'm in the C-Suite. I don't really know much about it, but I know we have a person who does that. I think this is now enough of a risk area. The stakes are high enough, both the enforcement risk and reputational risk. That it demands more C-Suite attention than in the past.

Three Resources

Three resources I would point people to, to help you.

• Up there first are our agents.   Even if we're not where your company is located, we have someone who will come visit with you and talk to you and and help you sort of understand you know what the rules are and talk to you about your compliance.  If you're overseas. We have export compliance officers, not everywhere geographically, but in a lot of places where definitely in Asia and Europe where they can come and do the do the same.
• Resource two is our website, there's lots of guidance on there, lots of the policies we've been talking about here. We have a a specific compliance guidelines. I think it's like nearly a 60 page manual that talks about how to set up an export compliance program and what it should contain.
• The third thing I would flag is our Office of Exporter Services. has a program where they will review your compliance program for you and sort of talk to you about it and match it against those existing guidelines.