International Trade, Enforcement & Compliance Recent Developments Update (May 24, 2023)
Welcome to Foley’s International Trade, Enforcement & Compliance Recent Developments Update
Recent developments include significant antitrust penalties, the issuance of CBP compliance guidance regarding the Uyghur Forced Labor Prevention Act, increasing emphasis on economic sanctions, “the new FCPA,” and the creation of an interagency Disruptive Technology Strike Force. The Strike Force already has announced five indictments, underscoring the risks of non-compliance with export controls and economic sanctions requirements.
FCPA Enforcement Up Significantly
FCPA enforcement rebounded significantly in 2022, with significant increases in the number of corporate resolutions, total penalty amounts, and investigations under review. With this post-pandemic return to aggressive enforcement, has your organization reevaluated its anti-bribery and anti-corruption compliance programs or performed any audits regarding the proper operation of its internal controls?
Forced Labor Import Compliance
Customs and Border Protection (CBP) recently announced that importers “have a responsibility to proactively monitor their supply chains to mitigate the risk of forced labor.” At the same time, CBP also issued “Best Practices for Applicability Reviews: Importer Responsibilities,” which details the types of documentation importers can submit to satisfy the Uyghur Forced Labor Prevention Act’s (UFLPA) rebuttable presumption that imported goods from the Xinjiang Uyghur Autonomous Region are a product of forced labor. (Click to read CBP publication.) CBP also has issued FAQs to aid importers in forced labor and UFLPA compliance. (Click to read CBP FAQs.) Does your organization maintain appropriate supply chain compliance and due diligence to ensure it is meeting forced-labor import requirements?
The Court of International Trade recently ruled that aluminum sourced from a country under an antidumping and countervailing duty orders was subject to substantial extra duties even though the product was re-rolled in a third country. (Click to read opinion.) Does your organization maintain procedures to identify all products potentially subject to antidumping or countervailing duty orders, including whether the product meets the relevant substantial transformation principles that might apply where there is multi-country processing?
Export Controls & Economic Sanctions Enforcement and Compliance
According to Deputy Attorney General Lisa Monaco, “sanctions are the new FCPA,” which is why the DOJ is directing that its National Security Division focus on “the increasing intersection of corporate crime and national security,” including through the addition of 25 new prosecutors “who will investigate and prosecute sanctions evasion, export control violations and similar economic crimes.” (Click to read AG Monaco’s remarks.) Does your organization maintain worldwide export controls and economic sanctions compliance measures, including comprehensive economic sanctions screening protocols?
Disruptive Technology Strike Force
The DOJ’s National Security Division and the Department of Commerce’s Bureau of Industry and Security have teamed up to create an interagency Disruptive Technology Strike Force that will operate out of 12 major metropolitan areas (Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York City, San Jose, Phoenix, Portland, and Washington, D.C.). The Strike Force is using intelligence and data analytics to identify and prosecute export control evasions, an especially large concern given Chinese and Russian attempts to gain access to export-controlled goods and technology, and also already has unsealed five indictments. Has your organization conducted an export controls classification review within the last two years to determine if any of its goods or technologies are controlled for export and put in place a comprehensive export controls and economic sanctions compliance policy? (Click to see DOJ announcement of criminal charges.)