Canada, Germany and the Netherlands released a joint advisory this week to give their companies guidance on how they can identify and report suspected Russian sanctions and export control evasion. The advisory, issued by the financial intelligence units of each country, includes a list of red flags, suggestions for customer due diligence and various case examples of Russian companies trying to evade sanctions.
The EU and the U.S. should try to reach a more “concrete” set of outcomes before the next Trade and Technology Council meeting in April and may discuss making the body permanent, said Valdis Dombrovskis, the EU’s top trade official. He said the two sides are “fleshing out new ideas” on supply chain, export controls and investment screening issues, and they want to make progress before the current European Commission term ends in October and before the upcoming U.S. presidential election.
The U.S. will announce "major" new sanctions against Russia this week, President Joe Biden told reporters Feb. 20 before leaving on a campaign trip. He said his administration will be releasing new sanctions on Russia as part of a package that will be announced Feb. 23.
Industry lawyers and advisers see the Bureau of Industry and Security's revamped voluntary disclosure policies as a positive set of moves that could reduce compliance burdens on exporters and encourage more companies to come forward with tips about their competitors. But at least one former government official said corporations should remain skeptical about the changes until BIS offers more clarity about how it will implement them in practice.
A new proposed rule from the Treasury Department could make investment advisers subject to certain anti-money laundering and counter-terrorism financing requirements under the Bank Secrecy Act. The agency said the measures could close a loophole that allows sanctioned companies, including in China, to invest in U.S. companies and access sensitive technology.
Policy experts and former government officials speaking on a panel this week mostly agreed that the U.S. should impose sectoral-based outbound investment restrictions on China rather than individual investment sanctions on specific entities, saying a sector approach would be much simpler and more effective. And although some companies say it will be too challenging to comply with a broad investment ban on sensitive Chinese technology sectors, one expert said it will be easier than the financial industry is letting on.
A New York freight forwarder agreed to complete export compliance training, but won’t face a fine, after admitting to the Bureau of Industry and Security that it illegally shipped enterprise servers and switches to Iran on behalf of an Iran-based exporter.
Exporters and industry groups warned the Bureau of Industry and Security this month about placing new eligibility restrictions on License Exception Strategic Trade Authorization (STA) for several technologies critical to their businesses, saying that could disrupt their supply chains and saddle the agency with an influx of license requests. At least one company urged BIS to launch what it said is a much-needed review of its space-related export controls, which could benefit from the license exception but that haven’t been overhauled since 2017.
U.S. enforcement officials last week continued to warn about upcoming export control penalties, saying they hope those cases encourage companies to devote more resources to their compliance programs.
The Treasury Department is likely to release its draft outbound investment regulations in the next several months, setting them up to potentially take effect before year's end, said foreign investment lawyer Jonathan Gafni of Linklaters.