On July 26, 2023, Assistant Secretary for Export Enforcement Matthew Axelrod of the US Department of Commerce’s Bureau of Industry and Security (“BIS”) spoke at the Society for International Affairs “Back to Basics” conference about BIS’s recent efforts to build partnerships in export controls regulation and enforcement and developments in antiboycott rules. In his address, Assistant Secretary Axelrod likened the Marvel cinematic universe—the blockbuster superhero films that feature intertwined characters and storylines—with the current export control landscape. By way of this analogy, Assistant Secretary Axelrod articulated BIS’s view that an ensemble cast of its interagency colleagues, international partners, private industry, and academia is central to a successful export control strategy.
Assistant Secretary Axelrod highlighted various interagency collaborations within the US government, including (i) the progress of the Disruptive Technology Strike Force created by the Departments of Commerce and Justice earlier this year, (ii) joint industry alerts on export control evasion issued by BIS and the Treasury Department’s Financial Crimes Enforcement Network, and (iii) a recent agreement between BIS and the Treasury Department’s Office of Foreign Assets Control (“OFAC”), which will “formaliz[e]” the “close coordination and partnership” and ensure that the agencies’ enforcement teams work more closely together. Notably, Assistant Secretary Axelrod announced that BIS and OFAC would be seeking to “jointly resolve investigations of common subjects” going forward.
On the topic of international coordination, Assistant Secretary Axelrod touted BIS’s efforts to build a coalition of 39 governments to place export controls on Russia, the G7’s partnership on a new multilateral sanctions and export controls enforcement coordination effort, and BIS’s recent export controls enforcement cooperation agreement with members of the Five Eyes. The G7 partners held their first working-level meeting on enforcement coordination in July. As part of the Five Eyes coordination effort, BIS has stationed an enforcement analyst abroad for the first time (BIS has had Export Control Officers based abroad for decades). This enforcement analyst will be based in Ottawa, Canada and will work directly with Canada’s Border Services Agency. We expect that this development may signal future deployments of enforcement analysts to partner countries.
Assistant Secretary Axelrod also spoke on BIS’s efforts to work with private industry and academia. In particular, he noted that BIS agents have contacted more than 800 U.S. companies who had past export ties to Russia or whose components were identified inside Russian weapon systems found in Ukraine. He also highlighted recent interagency advisories from this year that alerted industry to Russian efforts to evade sanctions and export controls, Iran’s activities related to unmanned aerial vehicles, and the U.S. government’s voluntary self-disclosure policies. In regard to academia, Assistant Secretary Axelrod announced that nine universities were recently invited to join BIS’s Academic Outreach Initiative, which is a program that assists select universities with addressing export control risks.
In addition to these export control developments, Assistant Secretary Axelrod announced a change to the antiboycott reporting requirements set forth in Part 760.5 of the Export Administration Regulations. Starting on July 26, 2023, when US persons (or their controlled-in-fact foreign affiliates) submit a Boycott Reporting Form to the Office of Antiboycott Compliance (“OAC”) of BIS, they must identify the specific party from which the boycott-related request was received. Previously, US persons were only required to report to OAC (i) the receipt of a boycott-related request and (ii) the country from which the request originated. The change is intended to help BIS deter foreign parties from making boycott requests in the first instance. (This change does not apply to Form 5713, International Boycott Report, required under section 999 of the Internal Revenue Code for the separate US antiboycott regime administered by the US Department of the Treasury.) Notably, the Boycott Reporting Forms submitted to OAC are publicly available from the Commerce Department and provided to Congress. Accordingly, US persons that submit Boycott Reporting Forms to OAC should be aware that information about who is making boycott-related requests could be tracked by the US government and the press. Finally, Assistant Secretary Axelrod also announced the issuance of a new policy statement for U.S. government contractors regarding antiboycott regulations.
Assistant Secretary Axelrod concluded his remarks by reaffirming BIS’s commitment to working with public and private partners to address export control risks—or, in Marvel terms, to “keep the glowing thing away from the bad guy.”