I am presenting a Clear Law Institute (CLI) webinar titled, “Export Controls: Compliance Challenges and Best Practices.” As the government continues to aggressively enforce its export laws, it is increasingly essential for exporters to understand the laws and their corresponding obligations. This webinar will explore the key challenges companies face when engaging in export transactions,
Compliance
Court Rejects Cap on FCA Damages for Allegations of Subcontracting Plan Fraud
By Todd Overman on
Last month, the U.S. District Court for the Eastern District of Washington denied a motion to limit damages against a government contractor, United States ex rel. Savage v. Washington Closure Hanford LLC, where the government sought several categories of damages for alleged False Claims Act (FCA) violations. With a case centered on a nuclear waste company falsely certifying compliance with small business plan participation requirements, the Court ruled that damages would not be limited to remedies provided in the contract.
Continue Reading Court Rejects Cap on FCA Damages for Allegations of Subcontracting Plan Fraud
U.S. Penalizes Exxon for Violating U.S. Sanctions on Russia, May Have Complicated How U.S. Companies do Business in Russia
By Thad McBride on
- Penalty imposed against Exxon related to contracts with Russian oil company Rosneft
- Rosneft is not a prohibited party but its president is
- OFAC alleges that “senior-most” Exxon management were involved
- Exxon responds with suit against OFAC
On July 20, 2017, the U.S. Treasury Department Office of Foreign Assets Control (OFAC) announced that ExxonMobil (Exxon) must pay a $2 million penalty for violating U.S. sanctions on Russia. On the same day, Exxon responded by suing OFAC.Continue Reading U.S. Penalizes Exxon for Violating U.S. Sanctions on Russia, May Have Complicated How U.S. Companies do Business in Russia
“Buy American” Rules Have Major Implications for Defense
I commented on an article published in RealClearDefense, on the impact of the April executive order highlighting the Trump administration’s intention to renew the focus on sourcing domestic resources and employees for government contracts. The order requires increased enforcement of current “Buy American” laws, which date back to the Depression-era statutes Congress passed in 1933. The Office of Management and Budget (OMB) and the Commerce Department released follow-up guidance in late June requiring all federal agencies to prepare a compliance plan by September 15, 2017.
Continue Reading “Buy American” Rules Have Major Implications for Defense
DoD IG Report Highlights Flaws in DLA Compliance with Buy American Act and Berry Amendment
By Todd Overman on
A recent report from the Department of Defense (DoD) Inspector General (IG) identified a number of significant flaws regarding the Defense Logistics Agency’s (DLA) compliance with the Buy American Act (BAA) and the Berry Amendment. The IG’s findings will likely result in a renewed focus on both BAA and Berry Amendment compliance. As a result, contractors are likely to experience increased frustration as they seek to remain aligned with DLA policies. The IG’s report also draws further attention to the previously discussed government-wide effort by President Trump to both enhance compliance with the BAA as presently drafted and potentially strengthen the BAA through legislative action in the future.
Continue Reading DoD IG Report Highlights Flaws in DLA Compliance with Buy American Act and Berry Amendment
Senate Passes Russia and Iran Sanctions Legislation
By Thad McBride on
- Proposed legislation would extend sanctions on Russia and Iran
- New restrictions aimed at Russian energy sector and cybercriminals
- Legislation may pit Senate against House and the president
On June 19, 2017, the U.S. Senate overwhelmingly passed a bill mandating sanctions against Russia and Iran and a 30-day congressional review period should the president attempt to reduce those sanctions.
The bill remains in the House after congressional leaders challenged the fact that the revenue-raising bill did not originate in the House. The White House nonetheless is in the unenviable position of having to defend (or oppose) the implementation of sanctions against both Iran and Russia while attempting to conduct diplomacy with the Kremlin. With a veto-proof majority in at least one chamber, the president’s options appear limited.Continue Reading Senate Passes Russia and Iran Sanctions Legislation
Mitigating Economic Sanctions Risk
By Thad McBride on
Posted in Compliance, Sanctions (OFAC)
In an article published in the May/June 2017 issue of ABA Bank Compliance (a publication of the American Bankers Association), I provided insight on how banks can mitigate violations with the Office of Foreign Assets Control (OFAC). In January 2017, OFAC announced a settlement in which a large Canadian bank agreed to pay more than…
Buy American Executive Order Means Renewed Obligations for Government Contractors
By Richard Arnholt on
On April 18, President Trump signed the “Presidential Executive Order on Buy American and Hire American” (the Order), which declares the Executive branch’s policy to buy American goods and rigorously enforce and administer laws governing entry into the United States of workers from abroad. The Order is keeping with President Trump’s campaign promises regarding hiring American workers and promoting U.S. manufacturing, and signals a renewed focus on domestic sourcing requirements as well as the likelihood of greater restrictions on work visas for non-U.S. citizens.
Continue Reading Buy American Executive Order Means Renewed Obligations for Government Contractors
Agency First! – CBCA Refuses Jurisdiction over Contractor’s Challenge of Wage Rate Adjustments Despite Final Decision from Contracting Officer
By Todd Overman on
On March 31, 2017, the United States Civilian Board of Contract Appeals (CBCA) dismissed a contractor’s claims against the Department of Veterans Affairs (VA) for a lack of jurisdiction, stating that the contractor should have secured a final decision from the General Services Administration (GSA) prior to filing its claim. According to the CBCA, since the dispute was over the terms of a GSA Schedule contract and not over contract performance, proper procedures call for a decision from the GSA Schedule contracting officer before the CBCA can weigh in on the dispute.
Continue Reading Agency First! – CBCA Refuses Jurisdiction over Contractor’s Challenge of Wage Rate Adjustments Despite Final Decision from Contracting Officer
Lessons from the Historic ZTE Enforcement Action
By Thad McBride on
- One of largest export and sanctions penalties ever imposed
- Reminder of U.S. government’s broad jurisdiction over export and sanctions matters
- Cooperation could have helped ease the penalty significantly
On March 7, 2017, Chinese telecommunications company, Zhongxing Telecommunications Equipment Corp. (ZTE), signed on to three separate settlement agreements with the United States, agreeing to pay $892 million for violations of U.S. sanctions and export controls. Even more could be due if ZTE strays from the commitments it has made under the settlement agreements. This is one of the largest penalties ever imposed by the U.S. government for export and sanctions violations.
It is impossible in the space of this blog article to provide a detailed summary of this matter. In addition, while the details of the matter would make good copy, we think (hope!) that this is something of an isolated incident. At the same time, we think several lessons can be derived from this action.Continue Reading Lessons from the Historic ZTE Enforcement Action