U.S. Cracks Down on Sanctions Evasion, Targets Russia and Beyond
The U.S. government has been actively enforcing its sanctions and control laws, particularly targeting Russia-related activities. While no specific foreign companies operating flights in and out of Russia have been publicly named and fined for violating U.S. export controls since February 2022, a broad ban on Russian flights in U.S. airspace was imposed in March 2022.
The U.S. Office of Foreign Assets Control (OFAC) and the Bureau of Industry and Security (BIS) are at the forefront of these enforcement efforts. OFAC administers and enforces economic and trade sanctions against foreign jurisdictions, while BIS focuses on export controls. BIS has taken actions against foreign financial companies and companies involving foreign-produced items, including issuing Temporary Denial Orders (TDOs) and imposing penalties for violations. These actions are taken regardless of the location of the offending party, even if items are shipped through a third country or manufactured by a non-U.S. company with U.S. origin components.
OFAC may impose sanctions on persons engaging in specified conduct, such as deceptive trade practices or materially assisting sanctioned persons. Violations can result in civil or criminal penalties. The U.S. Department of Justice (DOJ) is authorized to bring criminal prosecutions for willful violations of U.S. sanctions and export control laws. Recent cases have involved attempts to unlawfully transfer U.S. technology to prohibited jurisdictions.
U.S. export control laws administered by BIS extend to items subject to the Export Administration Regulations (EAR) anywhere in the world and to related foreign persons who deal with those items. The U.S. government is aggressively cracking down on sanctions and export controls evasion, not only in Russia but also in other jurisdictions such as China, North Korea, Syria, and Iran. On March 6, 2023, the DOJ, Department of Commerce, and OFAC issued a compliance note addressing the obligations of foreign-based persons to comply with U.S. sanctions and export control laws.
