Background

A senior U.S. official said recently that federal efforts to enforce export controls and economic sanctions are expected to increase and expand in the coming years. The official’s remarks suggest that exporters should take steps now to review and ensure their compliance. For more information, please contact attorney Kristine Pirnia via email.

Principal Associate Deputy Attorney General John Carlin said in an Oct. 5 speech that the Department of Justice is “building up to surge resources for corporate enforcement,” including on sanctions and export controls. Carlin said the DOJ currently has about 150 open sanctions and export control investigations, “a significant increase over the last couple of years” and a trend he expects to continue. Around 70 percent of these cases relate to one of four countries: Iran, China, Russia, and North Korea.

Carlin said that because “the U.S. dollar continues to be the currency of international trade … sanctions will continue to be a vital instrument of American power.” The DOJ anticipates “innovation and expansion” of its efforts to enforce those sanctions “in close partnership with the Treasury and Commerce departments.”

However, Carlin also emphasized that the DOJ’s measure of success is not prosecution but “preventing the crime from occurring in the first place.” Toward that end the department will “continue to look for ways on the front end to communicate clearly what the expectations are so there are effective compliance programs in corporation and that the behavior changes.”

Carlin encouraged companies to take advantage of the voluntary self-disclosure program the DOJ implementing in 2016 “to incentivize companies to come forward when they identify criminal violations of sanctions and export control laws so that the company and government can quickly remediate.” In addition, he said, the DOJ will continue to use non-prosecution agreements and deferred prosecution agreements, though he acknowledged that there has been “scrutiny” of their use. The department will therefore “need to make sure that those who get the benefit of such an arrangement comply with their responsibility” and that there are “serious repercussions” if they don’t, which could include “punishment greater than the original sentence.”

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