You are reading the August 2023 Update of the Bass, Berry & Sims Enforcement Roundup, where we bring notable enforcement actions, policy changes, interesting news articles, and a bit of our insight to your inbox.

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Overview

• August saw two noteworthy Russia-related enforcement actions. First, a dual Russian-German national was arrested and charged with violating the Export Control Reform Act (ECRA) when he allegedly procured microelectronics for the Russian war effort. Second, Charles McGonigal, former Special Agent in Charge of the FBI New York Counterintelligence Division, pleaded guilty to violating the International Emergency Economic Powers Act (IEEPA) and to committing money laundering after providing services to a Specially Designated National (SDN).

• There were also a few China-related actions. 3M Company agreed to pay $6.5 million to settle allegations it violated the Foreign Corrupt Practices Act (FCPA) when its Chinese subsidiary paid for travel and associated recreational activities of Chinese officials employed at state-owned healthcare facilities. In addition, prior to Commerce Department Secretary Raimondo’s trip to China, the Bureau of Industry and Security (BIS) removed 33 entities from the Unverified List.  

• A New Jersey-based construction company settled three apparent violations of U.S. sanctions on Iran after a whistleblower brought the violations to the attention of management. In addition, the founders of a cryptocurrency service company called Tornado Cash were charged with sanctions and money laundering violations related to the company’s failure to implement appropriate internal controls.

• Elon Musk’s SpaceX was sued by the Department of Justice (DOJ) for alleged discriminatory practices related to hiring non-U.S. person refugees and asylees. The case revolves around the definition of “U.S. person” in the International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR).

• August also saw the announcement of a new outbound screening mechanism aimed at preventing U.S. capital from bolstering Chinese military capabilities. Also, the Forced Labor Enforcement Task Force (FLETF) added two new entities to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List and updated UFLPA strategy.

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