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DOJ’s National Security Division Places Corporate Crime in the Crosshairs

Sam Finkelstein, an associate at The Volkov Law Group, rejoins us for a posting on DOJ’s initiative to increase corporate prosecution of sanctions, export controls and national security issues. Sam can be reached at [email protected].

The marriage of corporate enforcement and national security has been a defining feature of the DOJ under the Biden Administration. The Justice Department’s commitment to prosecuting corporate crimes that implicate national security has never been stronger –– Principal Deputy Attorney General Marshall Miller recently stated that DOJ was “surging” resources to investigate corporate misconduct involving national security violations. This follows DOJ’s decision to add 25 new prosecutors to its counterintelligence and export controls section earlier this year.

Earlier this week, DOJ announced two significant appointments to the National Security Division’s corporate enforcement program. First, Ian C. Richardson was named as the Chief Counsel for Corporate Enforcement. Richardson previously served as a prosecutor in U.S. v. Lafarge SA––DOJ’s first ever corporate conviction for providing material support to foreign terrorist organizations––resulting in a $778 million fine against the defendant. Richardson has also prosecuted cases involving both corporate and nation-state cyber-espionage.

DOJ also announced the appointment of Christian J. Nauvel as Deputy Chief Counsel for Corporate Enforcement. Mr. Nauvel notably served as lead prosecutor in U.S. v. Huawei Techs. Co., which targeted a conspiracy by the Chinese telecom manufacturer to steal trade secrets from its U.S. competitors using fraud and deception. Perhaps not coincidentally, this appointment came just days after Huawei announced its development of an advanced semiconductor produced in China, surprising U.S. officials in what was hailed as a major blow to export controls aimed at undermining China’s efforts to develop domestic technology.

Earlier this year, Deputy Attorney General Lisa Monaco stated that “sanctions are the new FCPA.” Regarding China policy in particular, this new enforcement paradigm has wide-reaching implications across a range of industries. In recent years, U.S. officials have issued increasingly broad sanctions packages in an effort to prevent cutting-edge technology from falling into the hands of the Chinese military. The semiconductor arms race between the U.S. and China is just getting started; chipmakers, as well as companies in aerospace, electric vehicles, and other industries that rely on advanced computing must remain vigilant to avoid violating these rapidly evolving export restrictions. DOJ has also indicated that it considers intellectual property crime to be a national security issue.

Messrs. Richardson and Nauvel’s appointments suggest that DOJ will continue to aggressively pursue corporate crime as a national security issue. The blurring of lines between corporate enforcement and foreign policy carries major implications for global companies –– relevant national security laws must feature prominently in their export control and sanctions compliance programs.

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