Advisory: China’s Pharmaceutical Industry Brings Fentanyl Risks
Compliance and Due Diligence
US companies transacting with chemical and pharmaceutical firms in China must conduct thorough due diligence research on their Chinese counterparts to mitigate the risk of unknowingly engaging with an entity involved in the production of fentanyl or its precursor chemicals. The White House has made combatting fentanyl a major priority, citing the dangers of illicit …
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Alert: The Importance of Self-Disclosure
Compliance and Due Diligence
This week’s regulatory compliance note—a tri-seal effort between the Commerce Department’s Bureau of Industry and Security (BIS), the Justice Department, and OFAC—summarized the procedures for voluntary self disclosure of potential violations of sanctions and export controls. The note also highlighted that disclosures can result in significant mitigation of civil or criminal liabilities, while also helping …
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Alert: US Government Issues Gold Advisory
Compliance and Due Diligence
The US State, Treasury, Commerce, Homeland Security, and Labor Departments, along with the United States Agency for International Development (USAID), today issued an advisory to warn US persons and companies about the involvement of illicit actors in the gold trade in sub-Saharan Africa. Issued in coordination with sanctions against four companies linked to US-designated Russian …
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Alert: New Guidance on Iran UAS
Compliance and Due Diligence
The Departments of Commerce, Justice, State, and Treasury this morning issued joint guidance on Iran’s unmanned aerial systems (UAS)-related activities. The problem of Iranian drones supporting Tehran’s proxies in the region is not new. Iran-backed Houthi rebels have been using Iran’s drones against Saudi Arabia for several years, and Iran has been providing UAS technologies …
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ALERT: Russian Oil Price Cap Evasion
Compliance and Due Diligence
OFAC today issued an alert to warn US individuals, firms, and financial institutions about possible violations of the price cap on Russian crude oil imposed last year, especially through the Eastern Siberia Pacific Ocean (ESPO) pipeline and ports on Russia’s eastern coast. OFAC notes that Russian oil may be trading above the price cap and …
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Forced Labor in Xinjiang: A Challenging Problem
Compliance and Due Diligence
The US government’s enforcement of the Uyghur Forced Labor Prevention Act (UFLPA) is resulting in an increased number of shipments being detained at the US border, costing importers millions of dollars. The Department of Homeland Security’s enforcement efforts are exposing the underlying forced labor connections of goods imported by US companies and putting these firms’ …
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ALERT: Increased Russian Diversion Risk
Compliance and Due Diligence
Transacting in Russian-occupied territories in Ukraine has become riskier for western firms and financial institutions because Russia has been seizing businesses and schools in these jurisdictions and forcing them to register with Russian tax authorities. The new registrations and tax IDs of previously Ukrainian-owned entities make due diligence research, such as determining ownership, control, and …
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Regulators Become More Aggressive Toward Sanctions and Export Control Violations
Compliance and Due Diligence
Executive Summary The US government is taking a more hardline posture to enforce sanctions and export controls, which almost certainly will result in increased financial and criminal penalties for violators. Since Russia began its invasion of Ukraine in February 2022, US regulators have significantly expanded sanctions and other restrictions against Moscow and widened the scope …
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