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Scott Maberry is an International Trade partner in the Government Contracts, Investigations & International Trade Practice Group in the firm's Washington, D.C. office. Scott is a founding member of the Sheppard Mullin Organizational Integrity Group.

On Tuesday, May 19, the U.S. Commerce Department published a regulation (effective May 15, 2020) that prohibits sale to Huawei of a microchip made to a Huawei specification, made outside the United States with non-U.S. materials, sent from a foreign country, by a foreign person.

To quote the philosopher, hol’ up.

How is that even possible?
Continue Reading Huawei Whack-A-Mole: The U.S. Takes Another Swing at the Chinese Semiconductor Industry

On May 1, 2020, President Trump issued Executive Order 13920 (“Executive Order”), which prohibited certain transactions involving bulk-power system electric equipment manufactured or supplied by persons owned by, controlled by, or subject to the jurisdiction of a foreign adversary that poses an undue risk of catastrophic effects on the security or resiliency of U.S. critical infrastructure or the national security of the U.S.  The Executive Order poses several potential problems for electric industry participants, particularly renewable generation owners, developers and investors, which will likely cause uncertainty in equipment procurement decisions.  The Executive Order and its potential issues are discussed below.
Continue Reading Securing the U.S. Bulk Power System: An Assessment of Executive Order 13920

Is your company in a high-risk zone? Does it have the following risk characteristics?

Your company imports more than $10 million of goods.
You are mid-market: between $50 million and $2 billion in annual turnover.
Your company has experienced higher than average growth in revenues, personnel, or imports over the past 2 – 10 years.

If your company fits this profile, you may be at an elevated risk of customs violations. Many companies in this high-risk zone have outgrown their customs compliance function. Without knowing it, they may be creating violations and, since the statute of limitations is five years, they may not know about the violations until the government comes knocking on their door years after the fact.
Continue Reading Sick without Symptoms: How Multi-Million Dollar Customs Issues are Ailing U.S. Companies Without Warning

The scenario happens all the time:

Your engineering department has identified a need for more personnel who will work with export-controlled information. Management has approved the hiring, and your Human Resources manager has drafted the job posting.

What could go wrong? Export controls and anti-discrimination laws require employers to navigate an often-overlooked fine line when recruiting and hiring foreign nationals for positions involving export controlled information.


Continue Reading Refresher: How to Comply With U.S. Export Controls and Anti-Discrimination Laws When Recruiting and Hiring Foreign Nationals

In July, the U.S. Department of Education Notices of Investigation to four U.S. universities seeking information on the “Confucius Institutes” operating on their campuses. The investigations center on provisions of the Higher Education Act requiring reporting of certain foreign gifts. But the investigations are part of a larger U.S. national security initiative to address foreign influence on U.S. campuses.

In light of these initiatives, the need is greater than ever to balance the sometimes-competing values of protecting U.S. national security and defending academic freedom. Because of the intense U.S. national security focus being trained on these organizations, U.S. colleges and universities are well advised to pay close attention to developments in this area.
Continue Reading The U.S. Government Investigates U.S. Universities Participating in the “Confucius Institutes” Program

Europe has come up with a nifty plan to help Iran buy and sell stuff outside the reach of U.S. sanctions. The problem is that the plan is a fraud magnet. How do we know? It’s been tried before, and the fraud was epic.

The plan is known as the “Instrument in Support of Trade Exchanges,” or “INSTEX.” Lots of smart people have been involved in creating the program. Let’s hope they’re not too young to remember 1995, when fraudsters first heard that the UN was setting up a program known as “Oil-for-Food.” Similar to INSTEX, Oil-for-Food was designed to allow a sanctioned country (in that case, Iraq) to sell oil on the world market in exchange for food, medicine, and other humanitarian goods. A 2005 independent audit of the program found a staggering variety of fraudulent schemes netting billions of dollars in income for illicit merchants, intermediaries, and the Saddam Hussein regime itself. If INSTEX is not careful, it could be the victim of similar scams.
Continue Reading How to Steal $10 Billion from Europe