DOJ is helping to oversee more cases before the Committee on Foreign Investment in the U.S., particularly those involving sensitive U.S. personal data, said Matthew Olsen, the agency’s assistant attorney general for national security. He said DOJ is now “co-leading” with the Treasury Department about one-fourth of CFIUS reviews, “if not more,” a significant increase from previous years.
Ian Cohen
Ian Cohen, Deputy Managing Editor, is a reporter with Export Compliance Daily and its sister publications International Trade Today and Trade Law Daily, where he covers export controls, sanctions and international trade issues. He previously worked as a local government reporter in South Florida. Ian graduated with a journalism degree from the University of Florida in 2017 and lives in Washington, D.C. He joined the staff of Warren Communications News in 2019.
The Committee on Foreign Investment in the U.S. is mitigating more investment deals and is hiring more staff to manage its increasing workload, said Paul Rosen, head of CFIUS. Rosen also said the committee is assessing more violations for breaches of mitigation agreements and is “for the first time” beginning to receive voluntary self-disclosures.
The Bureau of Industry and Security fined a United Arab Emirates company $283,500 for failing to report boycott requests in violation of BIS’ antiboycott regulations. Dubai-based Regal Beloit FZE, a subsidiary of U.S. manufacturer Regal Beloit America, didn’t report 84 requests from a Saudi Arabian customer to stop importing Israeli goods “in fulfillment” of the customer’s purchase order, BIS said.
The Office of Foreign Assets Control reached a $3.3 million settlement this week with a California-based skincare company and a $175,000 settlement with its former unnamed senior executive for illegal exports to Iran in violation of U.S. sanctions. Murad, owned by multinational company Unilever, worked with distributors in Iran and the United Arab Emirates to ship goods to Iran, leading to at least 62 exports worth more than $11 million, OFAC said.
The U.S. is preparing to roll out a “substantial package” of new sanctions and export controls against Russia for its war in Ukraine, including by adding about 70 new entities to the Commerce Department’s Entity List and introducing more than 300 new financial sanctions against people, entities, vessels and aircraft, a senior administration official said. The measures, which will be coordinated alongside allies as part of the Group of 7 summit in Japan May 19-21, are aimed at closing “loopholes” used by Russia to evade sanctions and “extensively restricting categories of goods key to the battlefield,” the official said during a May 18 call with reporters.
The U.S. should avoid placing export controls on cloud computing services to try to prevent Chinese companies from using a loophole that allows them to access controlled semiconductors, researchers said. Georgetown’s Center for Security and Emerging Technology and the Center for a New American Security explored this strategy in a new report released this week but said export controls don't “appear feasible and may have adverse consequences.”
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.”
The Group of 7 countries likely will discuss sanctions, trade and a host of other issues at the upcoming summit in Japan, but the most consequential topic may surround the group’s emerging “de-risking” policy toward China, experts said this week. Several said they expect the G-7 countries to end the summit by releasing more information on the approach, although they also noted that not all Europeans yet agree with the strategy.
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.
DOJ this week unsealed indictments of six people for trying to illegally ship sensitive items from the U.S., including shipments of dual-use technologies and aircraft parts to Russia, isostatic graphite to Iran and trade secrets to China. The charges are the first enforcement actions brought by the Disruptive Technology Strike Force, a group launched by DOJ and the Commerce Department in February to investigate and prosecute criminal export violations (see 2302160019).