This past year marked a pivotal period in U.S. export compliance. There were significant regulatory updates, enforcement actions, and evolving challenges shaped by geopolitical dynamics. As industries adjusted to new rules, many companies faced increased expectations to integrate robust compliance frameworks that addressed regulatory complexities.
Updates from the Bureau of Industry and Security (BIS), the Office of Foreign Assets Control (OFAC), U.S. Customs and Border Protection (CBP), and the Census Bureau highlighted the tightening restrictions, enhanced enforcement, and broader oversight.
Strengthened export controls on emerging technologies
In 2024, the Bureau of Industry and Security (BIS) introduced substantial updates to its export controls targeting advanced semiconductors, artificial intelligence, and quantum computing technologies, particularly for exports to China.
The updated rules, issued in December 2024, imposed additional restrictions on equipment and software capable of producing advanced-node semiconductors. This move reflects the U.S. government's emphasis on maintaining technological leadership while preventing adversaries from leveraging these advancements for military purposes.
In addition, BIS further expanded its entity list, adding foreign companies suspected of supporting unauthorized military-end uses. These updates not only targeted traditional export activities, but also aimed to tighten controls over intangible technology transfers and cloud computing services.
OFAC's intensified sanctions enforcement
The Office of Foreign Assets Control (OFAC) issued several high-profile enforcement actions in 2024, underscoring the risks of insufficient sanctions screening and compliance oversight. Notable settlements revealed a focus on transactions involving sanctioned jurisdictions such as Russia, Iran, and North Korea. OFAC also revised its sanctions compliance guidance, emphasizing the need for organizations to implement tailored, risk-based compliance programs.
One key area of focus for OFAC has been mitigating the risk of supply chain diversion. Companies were reminded to identify vulnerabilities in their global operations, ensuring goods or technologies don’t reach restricted end-users through intermediaries.
Census Bureau and CBP: Trade data and enforcement updates
The Census Bureau enhanced its Automated Export System (AES) reporting requirements in 2024, introducing stricter deadlines for certain commodities to ensure timely and accurate trade data. Meanwhile, U.S. Customs and Border Protection (CBP) emphasized compliance in ecommerce.
Enhanced Tri-Seal guidance
In a landmark collaboration, BIS, OFAC, and the U.S. Department of Justice (DOJ) issued updated Tri-Seal seal compliance guidance in 2024. This document clarified best practices for screening third parties, conducting due diligence, and addressing emerging risks, particularly in dual-use technologies. The agencies stressed the importance of proactive risk assessments, whistleblower protections, and robust internal auditing mechanisms to prevent export violations.
The guidance also detailed expectations for global trade participants, including integrating technology-based solutions like machine learning for denied party screening and ensuring transparency in licensing requests.
Critical compliance areas are also clarified, including:
Risk of diversion
Agencies emphasized vigilance against diversion risks, particularly in exports to intermediary countries often used as transshipment hubs. The notes highlighted tactics used by bad actors, such as falsifying documentation or misclassifying goods, and recommended enhanced due diligence on supply chains.
Internal compliance programs (ICPs)
Updated guidance reiterated the importance of ICPs tailored to organizational risks. Agencies stressed ongoing employee training, audit mechanisms, and screening procedures as key to effective compliance programs.
Recordkeeping and documentation
Guidance underscored the necessity of maintaining accurate and accessible records for at least five years, as required by multiple agencies.
Challenges in diversion risks
Diversion remains a critical compliance risk in global trade. Throughout 2024, there were several sophisticated schemes where goods intended for civilian use were diverted for unauthorized military applications.
These cases often involved layered intermediaries and falsified documentation, making detection more challenging. Regulators urged companies to adopt stringent end-use and end-user verification processes and to leverage advanced analytics for identifying patterns of potential diversion.
Looking ahead
As 2024 closes, businesses must remain vigilant, anticipating further regulatory changes and heightened enforcement in 2025. The ongoing evolution of export controls and sanctions regimes underscores the necessity of integrating compliance as a core component of global business strategy. Organizations that prioritize compliance innovation and adaptability will be better positioned to thrive in this complex regulatory landscape.
This year has underscored need for a proactive approach to compliance, with exporters and freight forwarders playing critical roles in safeguarding national security and trade integrity.
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