Risk Management in the Export Controls Minefield (Part 2 in a Series)

David Yang

As the recent Bright Lights USA case demonstrates, export violations continue to be met by aggressive enforcement actions by U.S. government authorities. In Bright Lights USA, the U.S. State Department’s Directorate of Defense Trade Controls (“DDTC”) charged and fined a small manufacturer $400,000 for violating the International Traffic in Arms Regulations (“ITAR”) by exporting, without obtaining a license, engineering designs and drawings abroad for minor vehicle spare parts (such as rubber seals, gaskets and grommets, etc.) in connection with bids sent to foreign manufacturers to produce the parts for Bright Lights to resell to its commercial and public sector customers. Although the parts were commercial items and many other similar parts in the category in which Bright’s Lights conducted business had transitioned off of the U.S. Munitions List, the company had failed to update its list for parts that were still controlled. The DDTC found that the violations had occurred in large part due to the company’s “significant training and compliance program deficiencies.” Continue reading “Risk Management in the Export Controls Minefield (Part 2 in a Series)”

How Is Your Domestic Preference Compliance? President Trump Signals More Scrutiny of “Buy American, Hire American” Practices

Justin A. Chiarodo and Stephanie M. Harden

President Trump signed an Executive Order yesterday, marking another step forward in his promotion of “Buy American” and “Hire American” policies. The Executive Order focuses on two areas: cracking down abuse of the H-1B guest worker program and promoting the purchase of American products in federal procurements. We tackle in this post the “Buy American” portion of the Executive Order, which is of particular importance to federal contractors. Continue reading “How Is Your Domestic Preference Compliance? President Trump Signals More Scrutiny of “Buy American, Hire American” Practices”

Managing the Export Controls Minefield (Part 1 in a Series)

David Yang and Christian N. Curran 

yangcurranDespite recent political shifts away from globalization, international trade remains a bedrock of the U.S. economy, and companies doing business in the United States must be cognizant of the intricate set of export control regulations promulgated by the U.S. government. In today’s rapidly changing economy, it is more important than ever for companies to thoroughly assess their connections to the international marketplace. While the Obama Administration took strides toward simplifying the export control process, U.S. export control regulations remain complex due to the multiple government stakeholders involved, resulting in varying interpretations, policies, and agendas. Export control violations can still carry serious ramifications for a company’s business practices both inside and outside the United States. Accordingly, the first of this three part series begins by identifying whether your business may be subject to the U.S. export controls regime. Our next two installments will then, respectively, address: (Part 2) practical strategies for addressing risk mitigation; and (Part 3) enforcement actions by the government. Continue reading “Managing the Export Controls Minefield (Part 1 in a Series)”