We all know what a “core” sanctions violation looks like.  The heartland of such misconduct has been described on numerous occasions in OFAC enforcement actions and settlements.  In this environment, however, companies have to be aware of conduct that may still violate the law but is not necessarily in the “heartland” of misconduct. DOJ, OFAC and BIS are well aware of the broad reach of...

In this new era of aggressive sanctions enforcement, companies have to understand the red lines that define where criminal and civil enforcement risk increase.  In contrast to the history of FCPA enforcement, DOJ and OFAC have provided helpful guidance to alert companies where risks are likely to increase. Sanctions enforcement involves an off mix of civil and criminal line drawing.  On the civil side, OFAC...

On May 17, 2024, Nevada-based DXC Technology Company (“DXC”)—a global IT services provider—officially filed its required annual 10-K Form with the U.S. Securities and Exchange Commission (“SEC”) indicating that previously-disclosed proceedings involving both the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) and U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) had been resolved. According to the SEC filing, DXC officially...

While OFAC’s enforcement actions and guidance points to important steps exporters must take when relying on third-party distributors and other intermediaries, the “reason to know” and affirmative obligations to monitor resale and distribution of products to ultimate users does not appear to be unreasonable or impractical.  In terms of best practices, these are issues that need to be addressed. The supply chain and third-party risk...

Companies rely on robust distribution chains as an efficient mechanism to enter new markets without requiring a significant investment.  Additionally, companies may maintain parallel sales activities in markets between their own sales staff and third-party distributors, agents, resellers and dealers.  It is interesting how certain industries have evolved and relied on different models for use of third parties with the intent of reaching customers in...

By: Daniela Melendez, Associate at The Volkov Law Group, and Alex Cotoia, Regulatory Compliance Manager. Daniela can be reached at [email protected] and Alex can be reached out at [email protected]. On April 24, 2024, the European Union (“EU”) officially adopted Directive (EU) 2024/1226 on the definition of criminal offenses and penalties for the violation of Union restrictive measures and amending Directive (EU) 2018/1673 (the “Directive”). A copy of the...