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Following an active October, enforcement actions and regulatory policy changes slowed in November. With that said, the actions taken in November involved some novel topics and provide several insights to glean.
- November was another busy month for China-specific actions. Three Kentucky natives were indicted for exporting technical data without a license and violating the Defense Acquisition Regulations System (DFARS) specialty metal clause, and face significant jail time. Additionally, in an unprecedented case, the Department of Justice (DOJ) convicted a Chinese economic spy for attempting to steal trade secrets from GE Aviation. Across the pond, the United Kingdom forced the sale of a Chinese company’s majority interest in the UK’s largest semiconductor manufacturing facility.
- The Department of Commerce’s Bureau of Industry and Security (DOC/BIS) took separate actions against an American and an Iranian for illegally exporting controlled items into Iran. Both used the United Arab Emirates (UAE) as a transshipment point. Additionally, a Temporary Denial Order (TDO) was renewed against Mahan Airlines (of Iran) and a number of related parties.
- The TDO covering Rossiya Airlines (Russia) was renewed for the airline’s continued operation in violation of the Export Administration Regulations (EAR). Otherwise, things were slower last month for Russia-related enforcement actions. That doesn’t mean U.S.-origin products aren’t making it onto the battlefield in Ukraine. According to a November 16, 2022, Wall Street Journal article, a downed Iranian Mohajer-6 drone revealed that parts produced by U.S. firms accounted for 50% of the drone’s total components. While enforcement actions usually lag BIS discoveries, expect more enforcement actions to come.
- Another action taken against a well-known cryptocurrency company demonstrates the Treasury Department’s Office of Foreign Asset Control’s (OFAC) eagerness to bring the industry to heel. The company – Kraken – agreed to pay over $350,000 in penalties.