Return to Sender: New DOJ/Commerce Strike Force Aims to Broaden Export Control Enforcement and Prosecutions

On February 16, 2023, the U.S. Department of Justice (DOJ) and the U.S. Department of Commerce announced the creation of the “Disruptive Technology Strike Force” — a multi-agency, multi-geographical effort to ratchet up the enforcement and criminal prosecution of export control violations — particularly those related to advanced technologies.

Background

Led by DOJ’s National Security Division and Commerce’s Bureau of Industry and Security (BIS), the strike force will include representatives from the Federal Bureau of Investigation (FBI), the U.S. Department of Homeland Security (DHS) and, notably, 14 U.S. Attorneys’ Offices in 12 metropolitan regions across the country: Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York City, San Jose, Phoenix, Portland (OR) and the Washington, D.C. region.

Per the announcement, the strike force is intended to “target illicit actors, strengthen supply chains and protect critical technological assets” — including those related to supercomputing and exascale computing, artificial intelligence, advanced manufacturing equipment and materials, quantum computing and biosciences — “from being acquired or used by nation-state adversaries.” The strike force will specifically focus on:

• Investigating and prosecuting criminal violations of export laws;
• Heightening administrative enforcement of U.S. export controls;
• Fostering partnerships with the private sector;
• Working with international partners to “coordinate law enforcement actions and disruption strategies;”
• Leveraging “advanced data analytics and all-source intelligence” to develop and build investigations;
• Facilitating regular trainings for field offices; and
• Strengthening collaboration between the strike force and the U.S. intelligence community.

Deputy Attorney General Lisa O. Monaco added that the strike force aims to utilize “real-time intelligence and 21st century data analytics” to “strike back against adversaries trying to siphon off” the U.S.’s most advanced technology. 

Enforcement Trends

The formation of the Disruptive Technology Strike Force is just the latest component of the Biden administration’s broader effort to prevent certain countries — chief among them, China, Iran and Russia— from accessing advanced technologies developed in the United States. 

As explained in our previous client alert, BIS announced an Interim Final Rule in October, expanding the scope of the Export Administration Regulations (EAR) to additional items, exports, re-exports, transfers or releases along with activities relating to the semiconductor and supercomputer industries in China, Macau and Hong Kong. But as we also noted, the rule has significant implications outside the semiconductor and supercomputer industries, potentially impacting items subject to the EAR that would otherwise not be controlled for export to those locations, as well as the activities of U.S. persons involving items not subject to the EAR.

Since then, the Biden administration has also engaged U.S. allies to impose similar restrictions on semiconductor and supercomputer items. It was reported, for example, that on January 27, 2023, the U.S., the Netherlands and Japan reached an agreement whereby Japan and the Netherlands will impose new export restrictions on advanced microchips technology to China.

Practical Implications

In the near term, we expect the Biden administration to build upon its efforts to tighten export controls for advanced technology and, in turn, ramp-up enforcement and prosecution for those violating such controls. These developments underscore the need for both U.S. and non-U.S. businesses to ensure implementation and adherence to rigorous export compliance protocols (including timely and consistent export training) and be prepared to quickly adjust current export activities in the face of a rapidly evolving regulatory environment. 

For More Information

Please note that we will continue to closely monitor these developments and provide timely updates, as warranted. In the meantime, please do not hesitate to reach out to a member of the Faegre Drinker Customs and International Trade Team or the White Collar Defense & Investigations team if you have any questions.