In a decisive shift towards stringent enforcement, the U.S. government is escalating its crackdown on companies flouting export rules, introducing harsher penalties aimed at deterring violations, especially with nations like China, Russia, and Iran, a senior Department of Commerce official revealed late Tuesday.
Matthew Axelrod, Assistant Secretary for Export Control, signaled a new era of rigorous compliance at a corporate event on enforcement in Manhattan’s New York University School of Law. “We’re entering a phase where penalties must be striking enough to command industry-wide attention,” Axelrod emphasized, adding, “We’re on the brink of that shift.”
The recent $300 million fine against Seagate Technology for illegal shipments to Huawei serves as a mere ‘down payment’ in a series of impending high-profile corporate settlements. Last year, U.S. Deputy Attorney General Lisa Monaco underscored a heightened focus on export controls and sanctions as pivotal tools for national security, likening their impact to the Foreign Corrupt Practices Act (FCPA).
Axelrod interpreted Monaco’s stance as a call for companies to prioritize national security risks on par with FCPA compliance. He recalled Siemens AG’s landmark FCPA case, where hefty fines and executive charges significantly elevated global compliance standards.
Co-leading the Disruptive Technology Strike Force with Matthew Olsen, Axelrod underscored their commitment to safeguarding advanced technologies from illicit acquisition by state actors like Russia, China, and Iran.
The Department of Commerce, the regulatory body for export controls, faces scrutiny amid reports of U.S. technology illegally reaching China and Russia. In response, Axelrod announced enhancements to voluntary self-disclosure policies, streamlining minor violation resolutions to focus on more egregious offenses.
“We aim to clear the lower-level administrative cases to intensify our focus on significant violations, where we will now impose steeper penalties,” Axelrod stated, marking a decisive turn in U.S. export control policy.
