Expect 'Bigger Ticket' Corporate Cases This Year, BIS Official Says
U.S. enforcement officials last week continued to warn about upcoming export control penalties, saying they hope those cases encourage companies to devote more resources to their compliance programs.
Matthew Axelrod, the top export enforcement official for the Bureau of Industry and Security, said BIS and DOJ will try to bring more cases “across the finish line” this year. Speaking during an event to mark the one-year anniversary of the launch of the government’s Disruptive Technology Strike Force (see 2302160019), Axelrod said those cases could resemble charges announced last week against several people for illegal technology exports to China and Iran (see 2402080019).
They could also involve large fines against corporations for violating export regulations, Axelrod said, echoing comments he made in January when he said businesses can expect more “significant” export penalties and corporate resolutions (see 2401260040).
“I think you can anticipate seeing some bigger ticket corporate resolutions in 2024,” Axelrod said during the strike force event.
He said the government is pursuing more high-profile cases with larger penalties because “it sends a really strong message about the importance of investing in compliance.” To convince companies to bolster their compliance departments, Axelrod said “it helps sometimes if there are concrete examples of what can happen when you don't.”
“My prediction is, for 2024, you'll start to see some bigger corporate resolutions that hopefully -- in addition to holding people accountable -- will have that sort of knock-on deterrence effect,” he said.
Matthew Olsen, head of DOJ’s National Security Division, said the agency has prioritized its recent hiring to focus on corporate enforcement. The agency recently brought on “two leaders in the National Security Division whose job it is is to bring corporate enforcement cases,” Olsen said, and DOJ also has hired more attorneys “into the sections that are responsible for export and sanctions enforcement.”
DOJ is also “going to be very focused this year” on doing more outreach with companies, whether that’s through large conferences or “one-to-one engagements,” Olsen said. He wants “financial institutions, defense companies, technology companies" to have procedures in place to report potential violations or red flags to DOJ when they see them.
“You all are on the front lines of this effort, and you are sitting often at the intersection of national security and corporate compliance,” Olsen said. “I'm very excited about what's to come in 2024.”