Jennifer Diaz, President, Diaz Trade Law

Amber Pirson, Attorney, Diaz Trade Law

FinCEN’s March 30, 2026, Notice of Proposed Rulemaking (NPRM) marks a major step toward fully operationalizing the agency’s whistleblower program, designed to incentivize reporting of Bank Secrecy Act (BSA), sanctions, IEEPA, and other illicit finance violations. The proposal outlines how whistleblowers can securely submit information, how awards will be determined, and what protections will be available.  

This development reflects the Treasury Department’s broader strategy to strengthen financial system integrity and encourage actionable tips that support enforcement efforts. For financial institutions, compliance professionals, and potential whistleblowers, the NPRM provides long‑awaited clarity on program structure and expectations. 

Overview of the Proposed Rule 

FinCEN’s NPRM proposes a comprehensive framework for administering whistleblower submissions and awards. Key elements include: 

• Secure submission procedures for individuals reporting suspected violations of the BSA, OFAC sanctions, and related laws. 
• Eligibility criteria for whistleblower awards, including documentation requirements and timelines. 
• Award ranges of 10–30% of monetary penalties collected when a whistleblower’s information leads to a successful enforcement action. 
• Robust protections for individuals who provide information, including confidentiality and anti‑retaliation safeguards. 

These provisions aim to encourage early, detailed reporting while ensuring whistleblowers are shielded from adverse consequences. 

Why FinCEN Is Prioritizing Whistleblower Incentives 

The NPRM aligns with Treasury’s broader efforts to combat fraud, sanctions evasion, and illicit finance. On the same day, FinCEN issued an advisory highlighting how transnational criminal organizations exploit federal and state health care programs—underscoring the need for timely, credible tips from insiders. Treasury Secretary Scott Bessent emphasized that whistleblowers play a critical role in protecting U.S. national security and ensuring taxpayer funds are not diverted to criminal activity. 

By formalizing award structures and protections, FinCEN seeks to increase the volume and quality of reports that can lead to enforcement actions. 

What Financial Institutions Should Know 

Financial institutions should closely review the NPRM and consider how it may affect internal compliance programs. Key considerations include… 

• Enhanced reporting expectations: Institutions may see increased whistleblower activity and should ensure internal reporting channels are well‑defined. 
• Documentation and recordkeeping: Detailed records may become even more important as whistleblower tips could trigger investigations. 
• Training and awareness: Employees should understand both internal reporting options and the existence of FinCEN’s external whistleblower portal. 

FinCEN encourages public comments within 60 days of the NPRM’s publication in the Federal Register. The official notice is available here. 

Whistleblowing and IEEPA 

While the proposed rule offers rewards for reporting fraud-related violations of IEEPA, it is unclear whether FinCEN will consider reports of unpaid IEEPA duties to be valid claims of fraud. Given the U.S. Supreme Court’s ruling, which determined that President Trump’s use of IEEPA to impose tariffs was unlawful, companies subject to such whistleblowing reports may have a strong claim of defense.   

Final Thoughts: Take Action Today! 

FinCEN’s proposed whistleblower framework represents a significant shift in how illicit finance violations may come to light. Financial institutions, compliance officers, and legal practitioners should proactively assess the NPRM’s implications and prepare for increased scrutiny and reporting activity. If your organization needs guidance navigating BSA/AML obligations, whistleblower‑related risks, or comment submission strategies, Diaz Trade Law is ready to assist with FinCEN compliance. 

Learn more: 

• DOJ Targets Trade Fraud: Importers Now on Notice as Criminal Division Ramps Up Enforcement 
• Bloomberg Law: Voluntary Self-Disclosures: Recent Guidance From BIS, OFAC & DOJ 
• BIS Issues Guidance to Financial Institutions on Best Practices for Compliance with the Export Administration Regulations 

When Customs Issues Cross the Line

Most customs violations start as a civil enforcement matter. Errors involving classification, valuation, country of origin, or admissibility are often addressed through a request for information (CBP 28), notice of action (CBP 29), protest, prior disclosure, or penalty proceeding. However, when patterns emerge or when agencies believe false statements or deliberate schemes are involved, the enforcement posture can change dramatically.

Federal agencies, including U.S. Customs and Border Protection (CBP), Homeland Security Investigations (HSI), and the Department of Justice (DOJ), routinely collaborate to investigate potential criminal violations tied to import activity. These investigations may focus on:

• Undervaluation or misclassification to avoid duties
• False statements or omissions in entry documentation
• Evasion of import restrictions or regulatory requirements
• Coordinated schemes involving suppliers, brokers, or intermediaries

Once criminal intent is suspected, importers may face subpoenas, search warrants, asset seizures, or even criminal charges.

Increased Focus on Enforcement

The recent volatile tariff environment has created increased incentives to cheat the system. The U.S. government has made clear that it is watching closely.

In a May 2025 memo, Matthew Galeotti, head of the DOJ’s Criminal Division, named trade and customs fraud as one of the top enforcement priorities in white-collar crime. The DOJ also expanded its Corporate Whistleblower Awards Pilot Program to include customs fraud.

DOJ has repeatedly demonstrated a willingness to criminally charge bad actors with customs fraud and has secured indictments and convictions against several importers.

While CBP hasn’t issued a formal enforcement priorities memo like the DOJ, its recent public messaging leaves no room for doubt. In May 2025, the agency warned the pharmaceutical industry that undervaluing goods amounts to trade evasion. Additionally, a LinkedIn post from the agency stated: “CBP targets and combats duty evasion at every level. Make no mistake – bad actors violating U.S. trade law will be identified, investigated, and punished to the fullest extent of the law.”

Learn More: Upcoming Webinar on Customs Enforcement and Criminal Risk

DTL President Jennifer Diaz and Of Counsel Rick Quinn will explore these issues in an upcoming webinar. Join us on February 25 for a live webinar, “Customs & Criminal Law – Case Study: Tobacco.”

This webinar takes a deep dive into the intersection of customs enforcement and criminal law through the lens of a real-world tobacco-related case study. Tobacco imports are subject to some of the most complex, highly regulated, and heavily enforced rules in international trade.

Presenters will discuss:

• Overview of tobacco import regulations and why the product category carries heightened enforcement risk
• How CBP identifies irregularities and the roles of key agencies in enforcement actions
• The escalation pathway from civil customs violations to criminal investigations
• Common compliance failures in tobacco imports and how importers can avoid them
• Strategies for mitigating exposure
• Practical lessons learned for importers and trade professionals handling high-risk commodities

Who should attend?

• Importers
• Manufacturers
• Customs Brokers
• Regulatory Affairs Professionals
• In-house Legal Counsel
• Product Development Managers
• Others interested in FDA

REGISTER HERE.

Read more:

• High Tariffs, High Stakes: The Rise in Customs Fraud and Enforcement Risk
• DOJ Targets Trade Fraud: Importers Now on Notice as Criminal Division Ramps Up Enforcement
• Bloomberg Law: What is an Importer’s Reasonable Care Standard?
• Bloomberg Law:  Submitting a Prior Disclosure to CBP
• Webinar: The False Claims Act
• Webinar: Building and Maintaining an Effective Import Compliance Plan

What Happened

For a period of over ten years, from June 2011 to March 2023, Harman knowingly imported heat sinks that contained extruded aluminum from China without paying the required antidumping and countervailing duties (AD/CVD).

The settlement also reveals that when Harman discovered its failure to pay AD/CVD, the company concealed this fact and decided not to disclose it to the U.S. government. 

This case arose from a whistleblower lawsuit filed under the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The whistleblower in this case will receive over $2M of the settlement proceeds.

Enforcement is a Top Priority for the U.S. Government

High tariffs in the current trade environment have created a higher incentive to cheat. The U.S. government has made clear that enforcing customs laws is a top priority. 

For example, on May 12, 2025, Matthew Galeotti, the Head of the U.S. Department of Justice’s Criminal Division, sent a memo to all criminal division personnel highlighting the focus areas of the division for white-collar crime.

The memo included a list of “high-impact areas” that the division will prioritize investigating and prosecuting. Trade and customs fraud, including tariff evasion, was second on the list.

The DOJ also revised its Corporate Whistleblower Awards Pilot Program and added “trade, tariff, and customs fraud by corporations” to the priority list.

CBP has also noted that “bad actors violating U.S. trade law will be identified, investigated, and punished to the fullest extent of the law.”

Now more than ever, it is critical for importers to examine their import compliance programs and ensure that adequate procedures are in place to correctly enter goods into the United States. Importers should proactively conduct extensive due diligence in their supply chains to ensure they can detect, report, and remedy any noncompliance with customs requirements. In addition, if an importer becomes aware of the fraudulent conduct of a competitor, they should contact counsel to discuss options for reporting it to the government.

Diaz Trade Law can assist importers in developing compliance plans and guide importers in the event of a customs investigation. Contact us at 305-456-3830 or info@diaztradelaw.com.

Learn More

• Bloomberg Law: What is an Importer’s Reasonable Care Standard?
• Bloomberg Law: Submitting a Prior Disclosure to CBP
• Webinar: Importing 101: A Crash Course in CBP Compliance and Best Practices
• Webinar: Basics on Tariff Classification
• Webinar: Building and Maintaining an Effective Import Compliance Plan
• Webinar: The False Claims Act

As part of the plea agreement, Cadence will pay criminal penalties of nearly $118 million. 

In addition to the charges, the Department of Commerce’s Bureau of Industry and Security (BIS) also announced the resolution of a civil enforcement action against the company in which Cadence agreed to pay over $95 million in civil penalties. 

The DoJ and BIS have coordinated the resolution of the parallel investigation, and each agreed to a partial credit against their fine for payments made to satisfy the other agency’s fine. Under the coordinated agreement, Cadence will pay criminal and civil penalties of more than $140 million.

Cadence committed criminal violations of the export control laws by selling hardware, software, and semiconductor design intellectual property to the National University of Defense Technology (NUDT) in China. NUDT was added to the Department of Commerce’s Entity List in February 2015. The university was involved in the development of supercomputers with applications for military and nuclear explosive simulations. 

Cadence and its Chinese subsidiary engaged in a conspiracy to commit export control violations by exporting this technology to NUDT without obtaining the requisite licenses from BIS. 

Court documents reveal that Cadence continued exporting software even after acknowledging via email that NUDT had been added to the Entity List.

In negotiating the plea agreement, the DoJ considered that Cadence was cooperative when the investigation commenced, but also noted the company’s failure to voluntarily disclose the misconduct to NSD. Accordingly, the amount of the monetary penalty reflects a 20% reduction of the statutory maximum fine.

​​This case demonstrates the government’s priority in enforcing export controls and the importance of prioritizing compliance programs.

Diaz Trade Law can help create a new export compliance plan for your business or review and update an existing one. To learn more about how we can help, contact us at info@diaztradelaw.com or call us at 305-456-3830.

Read more:

• The Importance of Regular Export Compliance Training for Your Business
• Building a Strong Export Compliance Plan
• Building & Maintaining an Effective Export Compliance Plan
• Introduction to Export Controls
• ICYMI: State Department Reaches $200M Settlement with RTX Corporation for Export Violations

Grosfillex submitted false forms to Customs and Border Protection (CBP) claiming that furniture parts made of extruded aluminum from China were not subject to AD/CVD. The company attempted to hide the aluminum extrusions by falsely packing them as sham “furniture kits.” Additionally, for a different subset of extrusions, the company failed to correct customs forms it had submitted previously, even after learning that the forms contained false information.

The investigation arose from a whistleblower lawsuit filed under the False Claims Act by a former employee of Grosfillex. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. In this case, the whistleblower will receive $962,662.74.

Duty Evasion is on the Rise

This case is just one example of the growing incentive to cheat that comes with higher tariffs. Whether it’s through misclassifying goods, undervaluing imports, or using deceptive transshipment routes, some companies think they are being creative, but, instead, are participating in outright illegal strategies to reduce their tariff liability.

Higher tariffs have even contributed to the emergence of a cottage industry of “tariff reduction” companies that suggest ways to cut import costs. However, many of these so-called strategies amount to evasion, putting importers at serious civil and criminal risk.

The Department of Justice (DoJ) and U.S. Customs and Border Protection (CBP) have both made clear that duty evasion is a top enforcement priority.

Now more than ever, it is critical for importers to examine their import compliance programs and ensure that adequate procedures are in place to correctly enter goods into the United States. Importers should proactively conduct extensive due diligence in their supply chains to ensure they can detect, report, and remedy any noncompliance with customs requirements. In addition, if an importer becomes aware of the fraudulent conduct of a competitor, they should contact counsel to discuss options for reporting it to the government.

Diaz Trade Law can assist importers in developing compliance plans and guide importers in the event of a customs investigation. Contact us at 305-456-3830 or info@diaztradelaw.com.

Learn more: 

• CIT Hands Down $3.4M Penalty for Duty Evasion
• DOJ Targets Trade Fraud: Importers Now on Notice as Criminal Division Ramps Up Enforcement
• Bloomberg Law: What is an Importer’s Reasonable Care Standard?
• Bloomberg Law: Voluntary Self-Disclosures: Recent Guidance From BIS, OFAC & DOJ
• Bloomberg Law:  Submitting a Prior Disclosure to CBP
• Webinar: The False Claims Act
• Webinar: Importing 101: A Crash Course in CBP Compliance and Best Practices
• Webinar: Basics on Tariff Classification
• Webinar: Building and Maintaining an Effective Import Compliance Plan

The Case

The government’s case was filed in 2023, alleging that the importers had falsely declared that Chinese-origin goods as Thai origin to evade duties. The government asserted this false declaration avoided payment of ordinary 6% duties, Section 301 duties ranging from 10% to 25%, and 234.51% antidumping duties. 

The government asked the court to impose a penalty for negligence. The penalty amount is twice the loss of revenue or the domestic value, whichever is lower. After the importer failed to answer the complaint (a huge mistake), the U.S. moved for summary judgment.

The CIT granted the government’s motion and ordered the importer to pay a nearly $3.4 million penalty as well as all unpaid duties, taxes, and cash deposits on the unliquidated entries in question.

Duty Evasion is on the Rise

This case is just one example of the growing incentive to cheat that comes with higher tariffs. Whether it’s through misclassifying goods, undervaluing imports, or using deceptive transshipment routes, some companies are turning to creative or outright illegal strategies to reduce their tariff liability.

These incentives have even contributed to the emergence of a cottage industry of “tariff reduction” companies that suggest ways to cut import costs. However, many of these so-called strategies amount to evasion, putting importers at serious civil and criminal risk.

The Department of Justice (DoJ) and U.S. Customs and Border Protection (CBP) have both made clear that duty evasion is a top enforcement priority.

Now more than ever, it is critical for importers to examine their import compliance programs and ensure that adequate procedures are in place to correctly enter goods into the United States. Importers should proactively conduct extensive due diligence in their supply chains to ensure they can detect, report, and remedy any noncompliance with customs requirements. In addition, if an importer becomes aware of the fraudulent conduct of a competitor, they should contact counsel to discuss options for reporting it to the government.

Diaz Trade Law can assist importers in developing compliance plans and guide importers in the event of a customs investigation. Contact us at 305-456-3830 or info@diaztradelaw.com.

Learn more: 

• DOJ Targets Trade Fraud: Importers Now on Notice as Criminal Division Ramps Up Enforcement
• Bloomberg Law: What is an Importer’s Reasonable Care Standard?
• Bloomberg Law: Voluntary Self-Disclosures: Recent Guidance From BIS, OFAC & DOJ
• Bloomberg Law:  Submitting a Prior Disclosure to CBP
• Webinar: The False Claims Act
• Webinar: Importing 101: A Crash Course in CBP Compliance and Best Practices
• Webinar: Basics on Tariff Classification
• Webinar: Building and Maintaining an Effective Import Compliance Plan

Plan Details

The action plan will enable USDA to work closely with governors, state legislators, and federal partners to further integrate agriculture into the broader national security efforts over the coming months and years.

The USDA and its government partners will take “aggressive action” across seven critical areas:

1. Secure and Protect American Farmland – Address U.S. foreign farmland ownership from adversaries head-on. Total transparency. Tougher penalties.
2. Enhance Agricultural Supply Chain Resilience – Refocus domestic investment into key manufacturing sectors and identify non-adversarial partners to work with when domestic production is not available. Plan for contingencies.
3. Protect U.S. Nutrition Safety Net from Fraud and Foreign Exploitation – Billions have been stolen by foreign crime rings. That ends now.
4. Defend Agricultural Research and Innovation – No more sweetheart deals or secret pacts with hostile nations. American ideas stay in America.
5. Put America First in Every USDA Program – From farm loans to food safety, every program will reflect the America First agenda.
6. Safeguard Plant and Animal Health – Crack down on bio-threats before they ever reach our soil.
7. Protect Critical Infrastructure – Farms, food, and supply chains are national security assets and will be treated as such.

The action plan is the next pillar of the USDA “Make Agriculture Great Again” initiative and seeks to protect the country’s agricultural supply chains from security vulnerabilities. 

Increased Enforcement

Notably, the plan also states that the federal government is looking to increase enforcement on “logistics providers, customs brokers, and other trade intermediaries” that are responsible for importing “dangerous biochemicals and biological agents.” 

According to the plan, the USDA intends to review and modernize import restrictions to prevent the spread of dangerous chemicals and agents. USDA will work with federal partners, including CBP, “to strengthen our nation’s borders against entry of restricted goods that could carry animal disease, plant pests, and biological pathogens that can be weaponized against the American public.”

Response and Next Steps

Several members of Congress, governors, and state Agricultural Secretaries issued statements praising the plan, calling it critical to the agricultural economy and to the national security of the United States.

The action plan contains a lengthy list of action items for USDA to take, including an assessment of security risks in the agriculture infrastructure sector, modernizing import restrictions, and eliminating support programs to countries of concern.

Diaz Trade Law will continue to monitor developments as the USDA implements the plan.  

Read more:

• ICYMI: President Trump Signs America First Trade Policy
• USDA Proposes New “Made in the USA” Standard
• USDA Trade Matters

Reporter Corinne Ramey walks through the recent uptick in efforts to evade rising tariffs and how the federal government is responding. She quoted Jennifer on DTL’s approach to advising clients on enforcement. 

Below are a few snippets from the piece. Read the full article on the WSJ.com here. 

“First came President Trump’s announcements of sweeping tariffs. Next up, lawyers say, is the cheating. 

Trade lawyers say that as tariffs skyrocket, so too do the incentives not to pay them. Clients are inundating them with questions about the line between lawful loopholes and fraud. 

At the same time, the Justice Department’s shifting white-collar priorities to pursue tariff and customs-related cases more aggressively have helped create a perfect storm for more trade enforcement. And lawyers say they have seen a sharp increase in calls from whistleblowers looking to file their own cases about alleged wrongdoing…” 

“Jennifer Diaz, a Florida trade lawyer, said her firm was ramping up its criminal expertise to prepare for a new wave of enforcement. The firm now advises clients on regulatory matters and navigating customs rules.  

‘To have this topic being front page news on a daily basis is a trade lawyer’s dream,’ Diaz said.” 

Diaz Trade Law is tracking developments in tariffs and trade deals. Check our tariffs page for the latest news. 

Learn more:

• DOJ Targets Trade Fraud: Importers Now on Notice as Criminal Division Ramps Up Enforcement
• High Tariffs, High Stakes: The Rise in Customs Fraud and Enforcement Risk
• DoJ Declines Prosecution of Company That Self-Disclosed Export Control Offenses

The memo included a list of “high-impact areas” that the division will prioritize investigating and prosecuting. Trade and customs fraud, including tariff evasion, was second on the list.

The DOJ also revised its Corporate Whistleblower Awards Pilot Program and added “trade, tariff, and customs fraud by corporations” to the priority list.

Galeotti noted that unchecked fraud in U.S. markets robs hardworking Americans, harms the public, and that efficient enforcement promotes American economic and national security interests.

This memo signals a significant shift in the priorities of the DOJ’s criminal division. Historically, trade violations were not a top criminal priority and were instead handled by CBP and the DOJ’s Civil Division. Relatively few trade law violation cases have risen to the level of criminal prosecution.

What Importers Should Do

Now more than ever it is critical for importers to examine their import compliance programs and ensure that adequate procedures are in place to correctly enter goods into the United States.

Invest in Compliance

CBP expects importers to use “reasonable care” in reporting HTS, value, country of origin, free trade agreement preference, etc. This is a subjective standard; however, CBP provides plentiful resources to guide importers. Working with a customs attorney, importers should develop robust compliance programs that minimize the risk of trade law violations and demonstrate reasonable care.  

Due Diligence

Importers should proactively conduct extensive due diligence in their supply chains to ensure they are able to detect, report, and remedy any noncompliance with customs requirements. Relying on the word of a supplier or the due diligence of a broker is not enough.

Develop or Revisit Voluntary Prior Disclosure (PD) Policies

When an importer voluntarily discloses a customs violation, they can benefit significantly from reduced penalties. PD policies create a clear plan of action if an importer discovers a violation. Timely disclosure can make the difference between benefiting from a mitigated penalty or not. It is also critical to work with a customs attorney when submitting a PD to ensure the proper information is provided and to maximize the mitigation benefit.

Diaz Trade Law can assist importers in developing compliance plans and guide importers in the event of a customs investigation. Contact us at 305-456-3830 or info@diaztradelaw.com.

Learn more: 

• Bloomberg Law: What is an Importer’s Reasonable Care Standard?
• Bloomberg Law: Voluntary Self-Disclosures: Recent Guidance From BIS, OFAC & DOJ
• Bloomberg Law: Submitting a Prior Disclosure to CBP
• Webinar: Importing 101: A Crash Course in CBP Compliance and Best Practices
• Webinar: Basics on Tariff Classification
• Webinar: Building and Maintaining an Effective Import Compliance Plan

The note:

1. Highlights the applicability of U.S. sanctions and export control laws to persons and entities located abroad;
2. Outlines the enforcement mechanisms that are available for the U.S. government to hold non-U.S. persons accountable for violations of such laws; and
3. Provides an overview of compliance considerations for non-U.S. companies and compliance measures to help mitigate their risk

Applicability of U.S. Sanctions and Export Control Laws to Foreign-Based Persons

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) administers and enforces economic and trade sanctions, primarily against foreign jurisdictions but also against individuals and entities such as traffickers and terrorists.

The following persons/entities must comply with OFAC regulations:

• U.S. citizens and permanent resident aliens
• All persons within the United States
• All U.S.-incorporated entities and their foreign branches

In certain sanctions programs, foreign entities owned or controlled by U.S. persons also must comply with applicable restrictions – such as engaging in a transaction with the government of Iran. Certain sanctions programs also require foreign persons in possession of U.S.-origin goods to comply.

Non-U.S. persons are also subject to certain OFAC prohibitions. For example, non-U.S. persons are prohibited from causing or conspiring to cause U.S. persons to wittingly or unwittingly violate U.S. sanctions, as well as engaging in conduct that evades U.S. sanctions.

Applicability of U.S. Export Control Laws

The compliance note highlights that the Export Administration Regulations (EAR) follow the goods – meaning U.S. export control laws may extend to items subject to the EAR anywhere in the world and to foreign persons who deal with them. Anyone involved in the movement of items subject to the EAR must adhere to U.S. export control laws.

Transshipment

The reach of U.S. export control laws means that parties to an export transaction cannot bypass the EAR by shipping items through a third country. Similarly, foreign parties to an export transaction cannot bypass EAR requirements because the item is located outside the United States.

U.S.-Origin Components

The EAR may also apply to foreign companies that manufacture items containing U.S.-origin components. The factor that determines EAR applicability is the value of the components. Most of the time, a non U.S.-made item is subject to the EAR if the value of the U.S.-origin controlled content exceeds 25% of the value of the finished product. For certain countries, the threshold is lower (Cuba, Iran, North Korea, and Syria – 10%).

Foreign Produced Products that contain U.S.-Controlled Technology

Under the EAR, certain foreign-produced items located outside of the United States that are produced using certain U.S.-controlled technology, software, or production equipment are subject to the EAR when exported from abroad, reexported, or transferred in-country to certain countries or parties on the Entity List.

This means that even if the items never enter the U.S., they may still be subject to U.S. export control jurisdiction under certain conditions.

Examples include:

• License requirement for Huawei and its subsidiaries on the Entity List on items that are the direct product of certain U.S.-origin software or technology.
• Certain Chinese entities associated with advanced semiconductors.
• Controls on certain defense-related entities and items in Russia, Belarus, and Iran.

Enforcement Against Foreign Persons and Entities

The note illustrates the authority of the Bureau of Industry and Security (BIS), OFAC, and the Department of Justice by providing past examples of enforcement actions.

BIS

• June 9, 2023 – BIS issued a Temporary Denial Order (TDO) suspending the export privileges of companies in the Netherlands and Greece for acting as a procurement network for Russian intelligence services.
• April 20, 2023 – BIS announced a $300 million penalty against a Singapore company for shipping millions of hard disk drives to Huawei without a license.

OFAC

• In April 2022, an international freight forwarding and logistics company paid over $6M to settle civil liability for received payments through the U.S. financial system in connection with shipments to Korea, Iran, and Syria.
• July 2021 – a UAE-based company settled with OFAC for $415,000 for exporting storage tank cleaning units from the U.S. to Iran by falsely listing a Dubai-based company as the end-user.

Department of Justice

• October 2022 – DOJ indicted three Latvian nationals, one Ukrainian national, one Latvian company, and one Estonian company with violating U.S. export laws by trying to smuggle from the United States to Russia a dual-use, high-precision computer-controlled grinding machine.
• December 2023 – DOJ indicted one Iran-based person and one China-based person for conspiring to illegally purchase and export from the United States to Iran dual-use microelectronics commonly used in UAV production.

Compliance Considerations for Foreign-Based Persons

The note ends by advising foreign-based companies and individuals to take seriously the impacts of U.S. sanctions and export control laws on their business and operations. The note provides a list of compliance considerations including screening protocols, integrating know-your-customer practices, and ensuring that affiliates are trained on U.S. export control requirements.

Diaz Trade Law Can Assist with EAR Compliance

While having an export compliance plan is not a guarantee that an export violation will not occur, a robust export compliance program can minimize the risk of non-compliance. Diaz Trade Law can help you develop an effective export compliance plan, export compliance training, transaction vetting, and more.

Reach out to us at info@diaztradelaw.com or call us at 305-456-3830.

Want more information on EAR compliance? Check out our relevant blog posts and on-demand webinars:

• Introduction to Export Controls
• The Importance of Regular Export Compliance Training for your Business
• Expanded Export Control Obligations when Exporting to China