US Senate’s Homeland Security and Governmental Affairs Committee Issues Report on Semiconductor Export Controls Enforcement

On December 18, 2024, the Majority Staff of the US Senate’s Homeland Security and Governmental Affairs Committee’s Permanent Subcommittee on Investigations issued The US Technology Fueling Russia’s War in Ukraine: Examining the Bureau of Industry and Security’s Enforcement of Semiconductor Export Controls.

The report concludes that the United States’ use of export controls as a tool to advance its geopolitical goals—notably “constraining China’s ambitions and Russia’s war”—has consistently fallen short of its intended goals, as enforcement of export controls is “a shadow of what it should be, and inadequate at every level.”

The report recommends that the Bureau of Industry and Security both accelerate its plans to impose higher fines on companies and charge companies with “knowing” violations when they fail to sufficiently investigate red flags or other strong indicia of potential diversion.

The report cites an article coauthored by Brent Carlson from NYU’s Program on Corporate Compliance and Enforcement blog, “How Not to Stand Out Like a Sore Thumb (Part 2): A Fresh Look at the ‘High Probability’ Definition of Knowledge Applied to Export Controls and Sanctions Enforcement.” The article provides background to understand the issues and concludes with practical steps for companies, in-house legal and compliance teams, and boards of directors.