BIS: 15 export control and sanctions criminal cases brought in 2024
The US Commerce Department’s Bureau of Industry and Security (‘BIS’) brought 15 criminal cases in 2024 charging sanctions and export control violations, smuggling conspiracies and other offences related to the transfer of sensitive technology to China (‘PRC’), Russia, and Iran through the Disruptive Technology Strike Force, according to the agency’s Year in Review released on 2 January.
The multi-agency Strike Force, which last year expanded from 14 to 17 locations with new cells in Texas, Georgia and North Carolina, targeted multiple illicit Russian procurement networks. Key actions included obtaining ‘the guilty plea of a defendant who played a critical role in exporting to Russia sensitive electronic components used in the development of nuclear and hypersonic weapons,’ and the indictment and extradition of ‘a Russian-German national from Cyprus on charges of procuring large quantities of microelectronics for the Russian defence base.’
Alongside the Department of Justice (‘DOJ’) and other law enforcement partners, BIS also imposed significant financial penalties, including a $3.3 million civil penalty on a California company for ‘exporting transistors and related products, including Common High Priority List (CHPL) items, to Russia’ and a $180,000 mitigated penalty against a New York company for exports of ‘solder materials used in electronics manufacturing’ to Russia.
Actions targeting China included obtaining ‘a guilty plea from a Chinese citizen for illegally exporting a semiconductor manufacturing machine to an Entity-Listed company in China.’ BIS also imposed a $5.8 million administrative penalty on TE Connectivity after its voluntary self-disclosure of unauthorised exports to parties tied to Chinese military electronics programmes.
The agency expanded international cooperation efforts, establishing the Disruptive Technology Protection Network with Japan and South Korea and signing bilateral agreements with Australian, Japanese, South Korean, and Swiss governments ‘to facilitate law enforcement cooperation and information sharing.’
For the first time, BIS placed addresses on the Entity List – ’16 addresses in Hong Kong and Turkey housing hundreds of shell companies that diverted more than $130 million in high-priority items to Russia.’ The agency also added 22 parties to the Entity List ‘for acquiring or attempting to acquire US-origin items to enhance PRC quantum capabilities.’
Other significant enforcement actions included the seizure of a $13 million Dassault Falcon 900EX aircraft owned for the benefit of Venezuela’s President Nicolás Maduro and the forfeiture of a Boeing 747 cargo plane previously owned by Mahan Air, a sanctioned Iranian airline.
The agency strengthened its enforcement programme by hiring ‘BIS’s first-ever Chief of Corporate Enforcement to serve as the primary interface between BIS agents, BIS enforcement attorneys, and DOJ prosecutors to facilitate resolution of corporate investigations.’ It also established the Commerce Screening System ‘to automate the screening of foreign entities on 100% of export licence applications against intelligence holdings, replacing what was an entirely manual process.’
https://www.bis.gov/media/documents/bis-export-enforcement-year-review-2024
