Cover story

'Voluntary' Whistleblowing and International Whistleblowers

Under the Dodd-Frank Act, a whistleblower who exposes fraud can receive a monetary award and anti-retaliation protections through the U.S. Securities and Exchange Commission (SEC) Whistleblower Program - as long as they blow the whistle voluntarily. A definition of “voluntary” may seem simple enough. However, some Dodd-Frank whistleblowers who, acting of their own free will and without legal obligation, report fraud are considered “involuntary” simply because they reported to the media, other government agencies, foreign law enforcement, or a U.S. embassy.

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September 2023 Export Practioner

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- International Atomic Energy Agency (IAEA) 67th General Conference
  
  Under Secretary for Arms Control and International Security Ambassador Bonnie D. Jenkins will travel to Vienna, Austria on September 24-28 to …
- OFAC: Reminder to file the 2023 Annual Report of Blocked Property
  
  On July 3, 2023, the Office of Foreign Assets Control (OFAC) issued a recent actions notice, reminding holders of property blocked pursuant to …
- State: Defense Trade Advisory Group
  
  The Defense Trade Advisory Group (DTAG) will meet in open session from 1:00 p.m. until 5:00 p.m. on Thursday, October 12, 2023. This will be a …
- CHIPS Act Security Rule Released
  
  The U.S. Department of Commerce today released the final rule implementing the national security guardrails of the bipartisan CHIPS and Science …
- WTO: E-Commerce Moratorium Debate
  
  The United States, the European Union and other proponents on Monday apparently failed to provide any convincing reasons as to why the World …
- EU Customs Reform First Status Report Published
  
  The European Commission tabled a customs reform package on 17 May 2023. Along with a number of other provisions, key to the reform would be the …

Sanctions

3M Settles Iran Sales Case

3M has agreed to settle its potential civil liability for 54 apparent violations of OFAC sanctions on Iran that arose from its subsidiary’s sale of reflective license plate sheeting to an Iranian entity controlled by the Iranian Law Enforcement Forces. OFAC determined that these apparent violations were egregious and were voluntarily self-disclosed, and imposed a $9,618,477 settlement

Iran: Qatar Aid Channel, and further sanctions

U.S. government announced the establishment of a humanitarian channel in Qatar (HC) to further facilitate the flow of humanitarian assistance to the people of Iran consistent with the U.S. government’s longstanding support for humanitarian trade. Similar to humanitarian channels established under previous administrations, the HC is designed to support the Iranian people’s access to food, agricultural goods, medicine, and medical devices under stringent due diligence measures that guard against money laundering, misuse, and evasion of U.S. sanctions

Hizballah Operatives and Financial Facilitators in South America and Lebanon

Treasury’s Office of Foreign Assets Control (OFAC), in coordination with the Drug Enforcement Administration, designated key Hizballah operatives and financial facilitators in South America and Lebanon. This action includes the senior Hizballah operative, who carried out the terrorist attack against the Asociacion Mutual Israelita Argentina (AMIA) in Argentina in 1994 that killed 85 people. Amer Mohamed Akil Rada and his associates manage a commercial enterprise for Hizballah, including charcoal exports to Lebanon.

Enforcement

Justice Official Talks National Security Compliance

In a recent speech, Marshall Miller, principal associate deputy attorney general, emphasized consistency, predictability, and transparency in the Department of Justice’s (DOJ) approach to corporate enforcement, particularly in relation to national security. "National security laws must rise to the top of your compliance risk chart, with the recognition that even the most innocuous-looking transaction or activity could implicate our collective security."

German Ship's Chief Engineer gets 12 Months for San Diego Oil Dump

Chief engineer Denys Korotkiy of the Dry Cargo vessel Donald was sentenced on Sept. 15 to serve twelve months and a day in prison after being convicted of conspiracy to obstruct justice, obstruction of justice and failure to maintain an accurate oil record book. Vessel operating company Interunity Management (Deutschland) GMBH previously pleaded guilty for maintaining false and incomplete records relating to the discharge of oily bilge water and was ordered to pay a total of $1.25 million, including more than $312,000 to benefit marine and coastal natural resources in or near the Tijuana River National Estuarine Research Reserve.

Russian Arrested in Hong Kong Dual Use Ruse

A Russian citizen who has resided in Hong Kong, was charged in connection with conspiring to defraud the United States and with smuggling, wire fraud, and money laundering offenses based on his alleged participation in a scheme to unlawfully procure U.S.-sourced, dual-use microelectronics with military applications on behalf of end users in Russia. According to the complaint, Maxim Marchenko, 51, employed a web of shell companies as part of an overseas smuggling ring to ship dual-use U.S. technology with military applications to Russia in contravention of U.S. law. …

Policy Briefs

Ways-Means Blasts Canada Digital Tax

House Ways and Means Committee members are calling on the Administration and the Organization for Economic Cooperation and Development to fight Canada’s unilateral imposition of a digital service tax. The members noted that almost all 140 economies participating in the OECD work to reach agreement on updated international tax rules approved a one-year extension of the moratorium on DSTs through December 31, 2024. “We are disappointed that Canada is unfortunately moving against this global consensus with a punitive DST scheduled to take effect next year.”

Gallagher Committee Calls for FBI & Defense Briefing, Stat!

Reacting to news reports of espionage activities linked to the Chinese Communist Party (CCP) on American soil, Chairman Mike Gallagher (R-WI) and Rep. Ashley Hinson (R-IA), along with other members of the House Select Committee on the Chinese Communist Party, have called for an urgent classified briefing from Secretary of Defense Lloyd Austin and FBI Director Christopher Wray.

Ways & Means Chair Baits Reds in Detroit

In a stern letter, House Ways and Means Committee Chairman Jason Smith (MO-08) warned Treasury Secretary Janet Yellen that regulations must be immediately issued to prevent taxpayer funded subsidies for electric vehicles and batteries in the Inflation Reduction Act (IRA) from flowing to adversarial nations such as China.

Licensing

State/DDTC Concludes Settlement for Rocket Propellant Sales to China

The State Department charged Island Pyrochemical Industries Corp. with three violations of the Arms Export Control Act and and the International Traffic in Arms Regulations on Aug. 25. According to the State Department, Island brokered with a Chinese company without its approval. The Department also charged Island with "falsely listing itself as the seller and source of the defense article on a DSP-5 license application" in 2015.

Musk's SpaceX Cited for Using ITAR as Excuse to Discriminate

After complaining since at least 2005 that "we really need to do something about ITAR. It is really hurting U.S. industry,” and citing export controls for not hiring eligible non-citizens, South African immigrant Elon Musk's company SpaceX has been sued by the Justice Department for employment discrimination. The United States Department of Justice has filed a lawsuit against Space Exploration Technologies Corp. (SpaceX) for discriminating against asylees and refugees in its hiring process. The lawsuit contends that from September 2018 to May 2022, SpaceX deliberately discouraged such individuals from applying for positions within the company, violating the Immigration and Nationality Act (INA).

BIS Clears Verification Backlog, Credits Policy Change

In a sign that more rigorous policies to ensure host country cooperation are bearing fruit, Commerce’s Bureau of Industry and Security announced that 33 parties will be removed from the Unverified List, 27 of which are based in the People’s Republic of China (PRC) with others located in Indonesia, Pakistan, Singapore, Turkey, and the United Arab Emirates. BIS is taking this action because it was able to establish the bona fides – i.e., legitimacy and reliability relating to the end use or end user of items subject to the Export Administration Regulations (EAR) – of these parties through the successful completion of end-use checks.