Companies face a dual challenge — the pressing need to unravel their supply chains, and the immediate task of recalibrating due diligence systems to examine potential presence of cartel and transnational criminal organizations (“TCOs”) in a company’s supply chain and distribution channel.  The Justice Department has adjusted its enforcement priorities to elevate the importance of prosecuting cartels and TCOs.  This initiative will involve a two-fold...

The Unicat settlement provides some important insights into the Trump Administration’s direction on trade enforcement.  It underscores the importance of voluntary disclosure, cooperation and remediation, the tri-part foundation of seeking a favorable enforcement resolution.  Also, it emphasizes the importance of securing disclosure credit with the Justice Department since Unicat’s parent received a declination because of its early disclosure and complete cooperation. In stark contrast, the...

DOJ’s Unicat resolution is a perfect example of the new trade enforcement reality under the Trump Administration.  DOJ spearheaded a global resolution of sanctions, customs and export controls violations, while declining to prosecute the parent company that voluntarily disclosed the violations quickly after acquiring Catalyst. As detailed in court documents and in DOJ’s agreements with White Deer and Unicat, from approximately 2014 through 2021, Mani...

In an interesting enforcement action reflecting the Administration’s priority on sanctions, export and customs enforcement, DOJ announced a global resolution with DOJ, OFAC, BIS and CBP and Unicat Catalyst Technologies (“Unicat”), under which Unicat agreed to pay forfeiture totaling $3,325,052.10, representing the proceeds of its violations of U.S. sanctions, export control and customs laws. In parallel resolutions coordinated between the Justice Department, the OFAC and...

The Treasury Department’s Office of Foreign Asset Control (“OFAC”) has been relatively quiet on the enforcement front.  That is not unusual — every transition results in an enforcement hiatus.  Sanctions enforcement is a priority for this Administration.  As expected, the Justice Department will play a more evident role in the sanctions enforcement process.  This a new development, when DOJ declines there may be disclosure of...

DOJ’s new approach to FCPA enforcement presents some interesting opportunities — the headlines from the DOJ FCPA Guidance Memo will bring some significant changes but at the same time some things will not change.  Here is my list of what’s new and what’s the same. 1.  Increased individual prosecutions and reduced emphasis on corporate prosecutions: The DOJ FCPA Guidance Memo prioritizes individual prosecutions and avoidance...

The Justice Department has returned to the FCPA enforcement arena — in a significant development, DOJ announced the resumption of FCPA enforcement, with a new set of enforcement guidance principles.  The new guidance is an important statement governing FCPA investigations and prosecutions. The impact of this new approach will be significant — the precise scope of this renewed focus will depend on certain legal factors,...

In a unanimous decision, the U.S. Supreme Court, in Kousisis v. United States affirmed a lower court’s decision upholding a conviction of federal wire fraud for inducing a victim to enter into a transaction under materially false pretenses, even if the defendant did not intend to cause the victim economic loss.  The Supreme Court rejected the limiting of federal fraud cases to those where there...

With the rising importance of trade compliance programs, it is important to start with the law.  (Spoken like a true lawyer).  The U.S. relies on two powerful tariff tools — Section 301 and Section 232 tariffs.  Relying on these provisions, the U.S. government can impose additional duties on imported goods.  The key difference between the two is the specific legal authority and the different policy...

Tariff and trade violations are on DOJ’s radar screen.  No question but starting with Customs and Border Patrol we can expect that regulatory investigations and enforcement actions will increase.  Along with that — you can bet on this — DOJ’s criminal prosecution of tariff evaders will increase.  This is not very surprising — companies have an incentive to circumvent and evade tariffs.  Depending on the...