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Fatema Merchant is a partner in the Governmental and White Collar Defense and Corporate Investigations Practice Groups in the firm's Washington, D.C. office. Fatema is the Office Managing Partner of the firm's Washington, D.C. office and leads the Sanctions Team at Sheppard Mullin.

Recently, the Department of Commerce issued a memo, emphasizing that “technology protection is a core national security priority” and how companies that choose not to disclose significant violations of export regulations may have to bear concrete costs for non-disclosure. This memo highlights the continued focus to control U.S. technology security breaches, especially in the semiconductor and advanced computing industries.

Continue Reading Technology Protection is a Core National Security Priority: BIS Strengthens Its Policy on Disclosures

On March 31, 2023, the Office of Foreign Assets Control (OFAC) announced a $72,230.32 settlement agreement with Uphold HQ Inc. (Uphold), a global multi-asset digital trading platform, in connection with 152 apparent violations of the Iranian Transactions and Sanctions Regulations, the Cuban Assets Control Regulations, and Executive Order (E.O.) 13884. OFAC continues to focus on the virtual currency ecosystem which we have discussed here (Kraken) and here (Bittrex). This settlement provides another look at important compliance considerations for companies operating in the digital asset industry and a few practical tips.

Continue Reading OFAC Finds Digital Assets Trading Platform in Violation of Sanctions

On March 2, 2023, Deputy Attorney General Lisa Monaco delivered remarks to the ABA’s National Institute on White Collar Crime. Unsurprisingly, her remarks focused heavily on inspiring a culture of compliance – including highlighting the DOJ’s new policy to incentivize companies to self-report criminal activity (which our Organizational Integrity Group discusses here). But, her remarks also emphasized an emerging priority for DOJ enforcement: the intersection of corporate crime and national security.

Continue Reading “Sanctions Are The New FCPA”: DOJ Increases Focus on Sanctions and Export Control Enforcement

In response to Russia’s ongoing aggression in Ukraine, both the United States and the European Union have imposed additional sanctions and further restricted exports to Russia and Iran. These new controls span many industries.

Continue Reading Friday Development: New Sanctions and Export Controls to Address Russia’s Ongoing Aggression in Ukraine (Including the use of Iranian UAVs)

As we close out a wild year for international trade regulation,[1] after hearing much talk about outbound investment review mechanisms, we may see a final dramatic change before the ball drops. Since the summer, we have talked here about potential outbound investment reviews (reverse CFIUS? SUIFC?). And while there have been reports of potential action by both Congress and the Biden Administration on outbound investment, it is all the more possible to see executive action before a new Congress takes seat.

Continue Reading Will We Ring in the New Year with Outbound Investment Restrictions?

On November 28, 2022, the Office of Foreign Assets Control (OFAC) announced a $362,158.70 settlement agreement with Payward, Inc. (Kraken), an online virtual currency exchange, in connection with 826 apparent violations of the Iranian Transactions and Sanctions Regulations. This enforcement action highlights the OFAC compliance risks for virtual currency platforms and comes on the heels of the Bittrex settlement which we discussed here. Again, it is critical to assess your risks and take steps to make sure you’re addressing them with smart compliance and screening measures.

Continue Reading OFAC Continues Focus on Virtual Currency Industry with Announced Settlement with Payward, Inc.

On Monday, October 24, 2022, the Department of Justice (DOJ) announced charges against two alleged Chinese intelligence officers for bribing and stealing documents to obstruct the criminal investigation of, reportedly, Huawei (while the complaint does not name Huawei, it is the company according to multiple reports).

Continue Reading Bribes, Bitcoin and Obstruction: DOJ Announces Charges Against Chinese Agents for Trying to Impede Investigation of Huawei

Settlement Agreement with Bittrex, Inc.

Today, on October 11, 2022, the Office of Foreign Assets Control (OFAC) announced a $24,280,829.20 settlement agreement with Bittrex, Inc., an online virtual currency exchange and hosted wallet service provider, in connection with 116,421 apparent violations of multiple sanctions programs. This enforcement action highlights the OFAC compliance risks for virtual currency platforms. So, assess your risks and take steps to make sure you’re addressing them with smart compliance and screening measures.

Continue Reading OFAC Announces Hefty Settlement with Virtual Currency Exchange / Hosted Wallet Services Provider

On September 30, 2022, the Office of Foreign Assets Control (OFAC) published compliance guidance for instant payment systems. The guide highlights the need for emerging payment technology companies to assess their sanctions risks and implement compliance programs that mitigate those risks. Specifically, the guidance: (i) reaffirms that financial institutions should take a risk-based approach to managing sanctions risks; (ii) highlights key factors that may be relevant in determining that risk-based approach; (iii) encourages the development and deployment of innovative sanctions compliance approaches and technologies to address identified risks; and (iv) encourages developers of instant payment systems to incorporate sanctions compliance considerations as they develop new payment technologies.

Continue Reading OFAC Issues Sanctions Compliance Guidance for Instant Payment Systems

After Mahsa Amini was killed in the custody of “Gasht-e-Ershad” or Iran’s Guidance Patrol, commonly referred to as Iran’s morality police, following an arrest for placement of her hijab, protests have erupted throughout Iran over women’s rights and Iran’s authoritarian regime more generally. Iran’s police and other security forces are retaliating severely against protestors. In response to these human rights abuses, on September 22, the U.S. Department of Treasury, Office of Foreign Assets Control (OFAC) sanctioned Iran’s morality police and senior leaders of Iran’s security organizations for the violence against protesters.

Continue Reading Technology to Iran: OFAC Lifts Certain Iran Sanctions In Response to Protests in Iran

On September 16, 2022, the U.S. Commerce Department released its final rule regarding antidumping and countervailing duty (AD/CVD) circumvention inquiries on solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam. The rule implements President Biden’s June 6, 2022, Proclamation 10414, (which we discuss here) declaring an emergency with respect to the U.S. energy market, and temporarily waives the collection of AD/CVD duties for certain cells and modules subject to the AD/CVD anticircumvention inquiry initiated by Commerce in April 2022.

Continue Reading Commerce Department Adds Guardrails Against Stockpiling of Certain Solar Cells and Modules During Temporary Waiver of AD/CVD Duties