Clarity Amid Trade Compliance Confusion: Clear Signals on U.S. Export Controls Enforcement
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Brent Carlson and Michael Huneke (Partner, Hughes Hubbard & Reed) discuss increasing challenges for trade compliance teams amid global uncertainty, particularly due to volatile US–China trade relations and a surge in new export control regulations. While enforcement has historically lagged behind rule changes —similar to the early days of the Foreign Corrupt Practices Act (FCPA)—a shift is underway.
The US government, under renewed geopolitical pressure and bipartisan support, is signaling a dramatic escalation in export controls enforcement, with reported high-profile cases and billion-dollar penalties highlighting the stakes. The Bureau of Industry and Security (BIS) is emphasizing a broader interpretation of “knowledge” under the Export Administration Regulations, enabling more aggressive enforcement (as reflected in new guidance issued on May 13, after the publication of this article). Compliance teams are urged to act proactively, as waiting for public settlements may be too late. Clear signals from BIS and recent policy shifts suggest that export controls are becoming a central compliance risk, akin to the FCPA era, demanding immediate attention and strategic risk mitigation on the part of officers and directors.
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