Export Archives | Customs & International Trade Law Blog

Getting Off the SDN List: A Practical Guide to OFAC’s Administrative Reconsideration Process

Landing on the Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals and Blocked Persons List (SDN List) is one of the most consequential things that can happen to a company or individual doing business in or with the United States. Assets are frozen, U.S. persons are barred from dealing with you, and banking relationships evaporate almost overnight.

The good news is that SDN designations are not necessarily permanent. OFAC maintains a formal process – administrative reconsideration – for petitioning to have a person, entity, or piece of property removed from an OFAC-administered sanctions list. This article walks through how that process works, what to expect at each stage, and where clients most often stumble.

Step One: Confirm You’re Using the Right Process

Before filing anything, it’s worth pausing to confirm which removal process actually applies to your situation, because OFAC’s administrative reconsideration process is not a one-size-fits-all remedy.

You are the designated party. If you, your organization, or your property appear on an OFAC-administered list because OFAC itself made the designation, the administrative reconsideration process under 31 C.F.R. § 501.807 is the correct path, and it runs through OFAC’s Reconsideration Portal.
The designation was made by the State Department. Some names appear on OFAC-administered lists because the Department of State designated them (for example, under certain terrorism-related authorities). Removal in those cases goes through […]

By Jennifer Diaz|2026-08-27T16:15:24-04:00August 27, 2026|Export, U.S. Office of Foreign Assets Control (OFAC)|Comments Off

Bosch Agrees to Pay $36 Million Penalty to BIS for Unauthorized Shipments to Huawei

Robert Bosch GmbH (Bosch), the German multinational engineering and technology company, has agreed to pay a $36,184,680 penalty to the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) for exporting controlled items to Huawei Technologies Co. and its affiliates without the required U.S. government authorization.

What Happened

Between September 2020 and September 2024, Bosch exported approximately $72.4 million worth of Micro-Electro-Mechanical Systems (MEMS) sensor products and automotive software from abroad to Huawei and its affiliates. The exported items were subject to the Export Administration Regulations (EAR) under the Foreign Direct Product Rule, a rule that extends U.S. export controls to certain foreign-produced items that incorporate U.S. technology or are manufactured using U.S. equipment. Because Huawei and its affiliates are listed on BIS’s Entity List, any shipment of items subject to the EAR requires a license from BIS. No such license or authorization was obtained.

The MEMS sensors at issue are widely used in consumer products, including smartphones, wearable technology, and automobiles.

The Penalty

In addition to the $36 million BIS civil penalty, Bosch separately agreed with the Department of Justice to disgorge profits from the transactions, with an actual payment of approximately $3.6 million. BIS suspended approximately $3.6 million of its penalty as credit for the disgorgement, bringing Bosch’s total financial exposure to roughly $39.8 million.

Bosch filed a Voluntary Self-Disclosure with […]

By Jennifer Diaz|2026-06-18T12:00:24-04:00June 18, 2026|EAR, Enforcement, Export, International Trade, U.S. Bureau of Industry and Security (BIS)|Comments Off

DoJ Declines Prosecution of Company That Self-Disclosed Export Control Offenses

The Justice Department announced that it will not be prosecuting Universities Space Research Association (USRA) for violations of U.S. export control laws, citing prompt self-disclosure and cooperation.

EAR Violation

In 2016, USRA was granted a contract with NASA to license and distribute

aeronautics-related and U.S. Army-owned flight control software. Jonathan Soong was employed by USRA and was responsible for performing due diligence on prospective purchasers. Soong willfully exported software subject to the Export Administration Regulations (EAR) to Beijing University, knowing that an export control license was required for the export because it was on the Entity List.

Soong used an intermediary to avoid detection, and embezzled tens of thousands of dollars in software license sales. He ultimately plead guilty to willfully violating the EAR. He was sentenced to 20 months in prison.

Company Disclosure & Remediation

Within days of learning of Soong’s actions, USRA self-disclosed the violation to the Department’s National Security Division (NSD). The company fully cooperated with the ensuing criminal investigation, which eventually established that Soong had acted alone.

USRA’s cooperation included proactively collecting and disclosing evidence and providing detailed and timely responses to the government’s requests for information. USRA remediated the root cause of the misconduct by disciplining an employee who failed to appropriately supervise Soong, and by improving its internal controls and compliance program.

USRA also compensated the government both for the funds Soong embezzled, and for the time Soong had spent embezzling funds instead of performing his duties under the contract with NASA.

The DoJ cited the timely disclosure, cooperation, and remediation […]

By Jennifer Diaz|2025-05-07T16:07:04-04:00May 7, 2025|EAR, Export|Comments Off

Reporting, Requestor List, Penalties: Antiboycott Laws Explained

The United States enforces antiboycott laws designed to address foreign government’s economic boycotts of countries friendly to the U.S. Antiboycott laws have been on the books since the 1970s and are primarily enforced by the U.S. Department of Commerce’s Bureau of Industry and Security.

What Are the U.S. Antiboycott Laws?

“Anti-boycott” refers to U.S. laws and regulations that discourage and, in certain cases, prohibit U.S. persons from participating in unsanctioned foreign boycotts, particularly those targeting countries friendly to the United States.

BIS is charged with administering and enforcing this policy under the Anti-Boycott Act of 2018, the Export Control Reform Act of 2018, and the Export Administration Regulations.

The antiboycott laws aim to prevent U.S. persons from advancing foreign policies of other nations that run counter to U.S. policy.

Prohibited Antiboycott Activities Under the EAR

Part 760 of the EAR specifies prohibited antiboycott activities including:

Refusals or agreements to refuse to do business with or in a boycotted country or with blacklisted companies.
Discrimination or agreements to discriminate against a U.S. person based on race, religion, sex, or national origin.
Furnishing information or agreements to furnish information about business relationships with or in a boycotted country or with blacklisted companies.
Furnishing information or agreements to furnish information about the race, religion, sex, or national origin of a U.S. person.
Implementation of letters of credit containing prohibited boycott terms or conditions.
Taking actions with the intent to evade Part 760 of the EAR.

Required Reporting

Section 760.5 of the EAR requires […]

By Jennifer Diaz|2025-04-07T18:47:13-04:00April 7, 2025|U.S. Department of Commerce (DOC)|Comments Off

BIS Releases New Edition of “Don’t Let This Happen to You”

The Department of Commerce’s Bureau of Industry and Security (BIS) published an updated version of Don’t Let This Happen to You!, a list of case examples highlighting BIS enforcement efforts including criminal cases.

Case highlights:

The publication highlights over 100 cases covering various violations of export control laws.

Military Controls

The owner of BQ Tree Consulting in Jacksonville, Florida, along with the President and Manager of the company were indicted for conspiring to illegally export military-grade combat rubber raiding craft (CCRC) to China.

The scheme involved providing a U.S. company with false end-use and end-user information for a front company in Hong Kong, which was used to complete the transaction ultimately destined for China. The intention was to reverse engineer the CRRC and engines to mass produce them for the Chinese People’s Liberation Army (PLA) Navy.

The company owner was sentenced to 16 months in prison, two years of supervised release, mandatory mental health screening, and a $200 special assessment. The company President was sentenced to 42 months confinement, three years of probation, a $50,000 criminal fine, and a $200 special assessment. The company manager was sentenced to 17 months in prison, one year of supervised release pending deportation, a prohibition on employment with any company that deals with the military, and a $100 special assessment.

National Security Controls

GlobalFoundries U.S. Inc., a semiconductor wafer manufacturing company headquartered in Malta New York violated the Export Administration Regulations (EAR) by sending 74 shipments of semiconductor wafers, valued at approximately $17.1 million, to SJ Semiconductor (SJS), a company […]

By Jennifer Diaz|2024-11-22T07:18:29-05:00November 22, 2024|EAR, Export, U.S. Bureau of Industry and Security (BIS), U.S. Department of Commerce (DOC)|Comments Off

BIS Issues Guidance to Financial Institutions on Best Practices for Compliance with the Export Administration Regulations

The Department of Commerce’s Bureau of Industry and Security (BIS) recently published guidance for financial institutions containing several recommendations for complying with the Export Administration Regulations (EAR).

The guidance provides recommendations on steps financial institutions can take to minimize the likelihood of EAR violations. The recommendations focus on three key areas: due diligence best practices, reviewing transactions for red flags, and real-time screening.

Due Diligence Best Practices

The guidance recommends that financial institutions incorporate EAR related due diligence into their compliance and risk management and compliance processes. Due diligence should be conducted both before onboarding a new customer and as part of regular due diligence thereafter.

Specifically, BIS recommends that financial institutions:

Review customers against lists of persons subject to BIS’s end-user restrictions
Review customers – and, where appropriate, customers’ customers – against lists of entities that have shipped Common High Priority List (CHPL) items to Russia since 2023
Ask a customer to certify that it has controls in place to comply with the EAR if the customer is engaged in the export, reexport or transfer of items subject to the EAR and is on a restricted-party list

Review Transactions for Red Flags

The guidance recommends that financial institutions review transactions on an ongoing basis for red flags:

Purchases under a letter of credit that are consigned to the issuing bank, not to the actual end user.
Transactions involving entities with little to no web presence, such as a website or a domain based email account.
A customer lacks or refuses to […]

By Jennifer Diaz|2024-10-11T15:13:06-04:00October 11, 2024|Export, U.S. Bureau of Industry and Security (BIS)|Comments Off

ICYMI: G7 Issues Guidance on Preventing Evasion of Export Controls and Sanctions Imposed on Russia

The United States, Canada, France, Germany, Italy, Japan, the United Kingdom, and the European Union (the G7) published joint guidance for industry on preventing evasion of the export controls and sanctions imposed on Russia.

The goal of the guidance is to protect common high priority list items from misappropriation, prevent reputational harm, and mitigate liability risk. The guidance aims to assist industry with complying with multilateral export controls and sanctions and with identifying evolving Russian evasion practices.

The guidance outlines three priority areas: Items that pose a heightened risk of being diverted to Russia, red flag indicators of potential evasion, and best practices to address red flags.

1. The Common High Priority List (CHPL)

The European Union, Japan, the United Kingdom, and the United States developed the CHPL to identify items that pose a heightened risk of illicit diversion to Russia. Items include:

Integrated circuits
Navigational instruments
Digital cameras
Transistors
Signal generators
Milling machines

See the full CHPL here.

2. Red Flag Indicators

The G7 identified the following red flags indicators of potential export control and sanctions evasion:

Sudden changes in business activity after February 24, 2022
Fales, inaccurate, or misleading documentation
Concealing the end user
Inconsistencies in the transaction
Vague details and/or incomplete information
Dividing invoices
Suspicious customer information

3. Best Practices

The G7 calls on responsible traders to improve export compliance systems and exercise enhanced due diligence. Specifically, following these steps when encountering any red flags:

Run transaction parties against applicable public sanctions lists
Conduct additional due diligence
Analyze the risk of export control and/or […]

By Jennifer Diaz|2024-10-11T11:23:50-04:00October 11, 2024|Export|Comments Off

BIS Issues New Guidelines for Preparing Export License Applications Involving Foreign Persons (Deemed Exports/Reexports)

The Bureau of Industry and Security (BIS) issued new guidelines to assist deemed export applicants in obtaining licenses. The guidelines primarily apply to employment situations; however, they also address other situations such as the release of controlled technology to foreign students participating in research.

The guidelines cover basic requirements for applying and renewal and include an application checklist.

Background on Licenses for Deemed Exports/Reexports

The obligation to obtain an export license from BIS before releasing controlled technology to a foreign person is informally referred to as a “deemed” export. The release is considered an export to the person’s country or countries of nationality.

The Export Administration Regulations (EAR), Section 734.13, defines a deemed export as releasing or otherwise transferring “technology” or “source code” to a foreign person in the United States.

Typical organizations using deemed export licenses include universities, research institutions, bio-chemical firms, medical organizations, and computer companies.

New Guidance

The basic guidance for filling out license applications is set forth in Supplement 1 to part 748 of the EAR. The new guidelines supplement the basic guidance and are intended to assist licensing officers in reviewing license applications more efficiently.

Basic Requirements

The guidelines reiterate that applicants must include all the necessary information and documentation required when submitting a license application. BIS will return applications with insufficient information.

Basic documentation required:

By Jennifer Diaz|2024-09-13T11:58:26-04:00September 13, 2024|Export, U.S. Bureau of Industry and Security (BIS)|Comments Off

ICYMI: State Department Reaches $200M Settlement with RTX Corporation for Export Violations

The U.S. Department of State has reached a settlement with RTX Corporation to resolve 750 violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR).

The settlement resolved multiple violations including:

Unauthorized exports of defense articles resulting from the failure to establish proper jurisdiction and classification
Unauthorized exports of defense articles, including classified defense articles
Unauthorized exports of defense articles by employees via hand-carry to proscribed destinations listed in 22 C.F.R. 126.1; and
Violations of terms, conditions, and provisos of Directorate of Defense Trade Controls (DDTC) authorizations

RTX disclosed the violations voluntarily and cooperated with the State Department’s review.

Under the terms of the agreement, RTX will pay a penalty of $200M. $100 million will be suspended and used for remedial compliance measures to improve RTX’s compliance program. RTX must also engage an external Special Compliance Officer to ensure compliance with the agreement for at least 24 months.

This settlement demonstrates the State Department’s priorities in enforcing export controls and the importance of prioritizing compliance programs.

Diaz Trade Law can help create a new export compliance plan for your business or review and update an existing one. To learn more about how we can help, contact us at info@diaztradelaw.com or call us at 305-456-3830.

ICYMI: Congress Doubles the Statute of Limitations for Sanctions Violations

On April 24, 2024, President Biden signed into law H.R. 815, an emergency supplemental appropriations bill that included spending for Israel and Ukraine, along with other priorities such as data protection from foreign adversaries.

Within the fentanyl trafficking section, the bill included a provision that doubles the statute of limitations for all sanctions violations from five to 10 years. It also extended the limitation for certain export control violations such as biological weapon proliferation.

On September 11, 2024, the Department of Treasury’s Office of Foreign Assets Control (OFAC) issued an interim final rule amending their Reporting, Procedures and Penalties Regulations to reflect the new statute of limitations. The new rule extends recordkeeping requirements for certain transactions from five to 10 years.

Impact

This policy change will change how exporters keep records, maintain compliance programs, and conduct due diligence. It also allows more time for the government to investigate violations.

Government

The Department of Justice and the Department of Treasury’s Office of Foreign Assets Control (OFAC) are the primary authorities that will benefit from this policy change. Agency officials and prosecutors will now have twice as much time to investigate and bring charges against exporters.

The majority of federal crimes currently have a five-year statute of limitations. Some serious crimes such as capital murder or treason have no statute of limitations, other serious crimes such as embezzlement from a federal financial institution or racketeering have a 10 year limit.

Congress deliberately extending the limitations period in line with serious federal crimes sends a clear […]

By Jennifer Diaz|2024-09-13T12:01:08-04:00June 21, 2024|EAR, Export, U.S. Office of Foreign Assets Control (OFAC)|Comments Off