Although enforcement of the Foreign Corrupt Practices Act this year is off to its slowest start in a decade (see 2105050018), industry should expect FCPA penalties to pick up as more Justice Department officials are appointed and the Biden administration follows through on its commitment to combat corruption, lawyers said. They also said the administration will work more closely with allies and within the interagency, which should continue a trend of rising FCPA enforcement.

Export Compliance Daily is providing readers with the top stories for July 12-16 in case you missed them. You can find any article by searching the title or by clicking on the hyperlinked reference number.

The U.S. shouldn’t rely on export controls on semiconductors to stay ahead of China because the strategy would likely “backfire,” a former Department of Defense official told Congress this week. Lisa Porter, the former deputy undersecretary of defense for research and engineering, said government intervention in supply chains can “distort the market in ways that are hard to predict” and could lead to unintended consequences for the microelectronics industry.

The Commerce and Treasury departments fined a Dubai energy equipment supplier and its U.S. affiliate more than $430,000 for illegally exporting goods to Iran, the agencies said July 19. The U.S. fined Dubai-based Alfa Laval Middle East (AL Middle East) $415,695 for exporting Gamajet brand storage tank cleaning units from the U.S. to Iran and fined Virginia-based Alfa Laval (AL U.S.) $16,875 because its subsidiary referred an Iranian “business opportunity” to AL Middle East, according to enforcement orders issued this week.

Sanctions and export control enforcement in the United Kingdom has increased significantly in the past year as the country emphasizes more investigative work and higher penalties, said Tristan Grimmer, a compliance lawyer in Baker McKenzie’s London office.

The U.S. released an advisory to highlight the sanctions and export controls risks for companies doing business in Hong Kong and announced a new set of Hong Kong designations July 16. The advisory, issued by the State, Treasury, Commerce and Homeland Security departments, describes “considerations” for businesses operating in “this new legal landscape,” which includes several sanctions regimes targeting Beijing and Hong Kong.

The Bureau of Industry and Security added six Russian entities to the Entity List for activities that threaten U.S. national security and foreign policy, the agency said in notice. The entities operate in Russia’s technology sector and support the country’s intelligence services, BIS said. The Treasury Department sanctioned all six companies in February under President Joe Biden’s executive order that targeted Russia’s defense and technology sectors and its attempts to influence foreign elections (see 2104150019). BIS also corrected one existing Russian entry on the Entity List. The rule is effective July 19.

One of the obligations Canada and Mexico agreed to in the NAFTA rewrite is a ban on goods made with forced labor, but Baker McKenzie lawyers said it's not clear how much things are changing in that regard. Paul Burns, a Baker McKenzie partner in Toronto, said that while Canada has changed its law to ban the importation of goods made with forced labor, the Canadian customs agency does not disclose information about its enforcement. "We don’t know if there have been any detentions made," he said. "I expect there hasn't been."

Companies are continuing to see heavy U.S. enforcement surrounding Chinese attempts to steal U.S. trade secrets, and the government is increasingly expecting U.S. companies to voluntarily disclose violations surrounding those and other cases, lawyers said. The U.S. is hoping to increase enforcement by incentivizing companies to self-disclose sanctions and export control compliance mistakes, especially through the Department of Justice's revised disclosure policy guidelines (see 1912130047), the lawyers said.

The Biden administration is preparing to launch new export controls and investment screening initiatives to more closely coordinate with allies and better combat Chinese attempts to acquire advanced technologies, the U.S. secretary of state and national security adviser said July 13. Although the administration supports offensive tools, such as more funding for the domestic semiconductor sector, both officials said the U.S will continue to evolve its approach to defensive trade restrictions.