1. Recent Enforcement: Even Companies That Invest in Compliance Pay Penalties
Since our April enforcement roundup, the Office of Foreign Assets Control (OFAC) and the Bureau of Industry and Security (BIS) in the Department of Commerce have issued several important penalty announcements. These enforcement actions demonstrate that even multinational companies that invest in compliance can run into problems without a continued commitment to monitoring and updating their programs.
Global software company SAP SE paid a total of $8 million in a combined global resolution with the Department of Justice (DOJ), Commerce, and Treasury for illegal exports, and it also disgorged $5.14 million in profits. Between December 2009 and September 2019, the company exported its software, upgrades, and patches more than 20,000 times to end users in sanctioned countries, including Iran, without a license. As part of the settlement, SAP must perform three internal audits of its export compliance program
1. BIS Eliminates Reporting Requirements for Certain Encryption Items
Effective March 29, 2021, BIS eliminated or reduced reporting requirements for certain encryption items. For encryption source code and beta test software that is made publicly available, companies will no longer have to notify BIS unless the cryptography used is “non-standard.” Only source code that implements proprietary or unpublished encryption must be reported to the U.S. government before release from control under the Export Administration regulations. Additionally, most “mass market” encryption products will no longer be subject to annual reporting requirements. Certain mass-market items that previously required a formal classification request to BIS before they could be exported now can be exported after self-classification but remain subject to annual reporting requirements. This action may significantly reduce the reporting obligation for software companies that produce and export these encrypti
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The Issue
On May 17, 2021, the U.S. Senate began debate on the United States Innovation and Competition Act. The bill is a legislative package combining six proposals that Senate Majority Leader Chuck Schumer (D–NY) tasked committees with developing back in February, ostensibly to deal with the competitive challenge from China. The constituent parts of the bill currently include the Endless Frontier Act, the Strategic Competition Act, the Meeting the China Challenge Act, a group of proposals from the Homeland Security and Government Affairs Committee, and language from both the Judiciary Committee and the Committee on Health, Education, Labor and Pensions. It is an enormous bill in both length and price, and it is certain to get bigger as Senators offer amendments.
Published 8 April 2021
Senate Select Committee on Intelligence Chairman Sen. Mark R. Warner (D-VA) led a bipartisan group of Senators in urging President Joe Biden to request at least $3 billion as part of his budget request to Congress for the adoption of 5G alternatives to Chinese-made equipment. Specifically, the Senators urged Biden to request at least $1.5 billion each for two funds established by Congress to encourage the adoption of Open Radio Access Network (Open RAN) equipment, which would allow additional vendors to enter the 5G market and compete with manufacturers like Huawei, which is heavily subsidized by the Chinese government.
Senate Select Committee on Intelligence Chairman Sen. Mark R. Warner (D-VA) led a bipartisan group of Senators in urging President Joe Biden to request at least $3 billion as part of his budget request to Congress for the adoption of 5G alternatives to Chinese-made equipment. Specifically, the Senators urged Biden to request at least $1.5 bil
How Biden Can Get Korean Policy Right
There are several tools and policy options at America’s disposal when it comes to working with South Korea and dealing with North Korea.
Editor’s note: this article is an adaptation from a policy paper written by Joshua Nezam who recently served as the national security fellow in the office of Senator Cory Gardner. This paper was originally published in the Pacific Forum and is reprinted with their permission.
The next presidential administration and Congress must think creatively about the tools at their disposal to repurpose alliances and influence international agreements – both to signal support for longstanding interests and inject fresh thinking about how to achieve common goals in an evolving regional landscape. The United States-Republic of Korea (U.S.-ROK) alliance is evidence of decades of successful policy, yet its agenda is not fit for the current era. Deterring North Korea will remain a focus of the alliance, but prioritizin