Red Flags Rising

Mike & Brent return to their prior "Fresh Looks" series to highlight their September 28, 2023, post on NYU Law School's Program on Corporate Compliance & Enforcement blog, Know Your Customer, But Also Yourself: A Fresh Look at Sanctions & Export Controls Risk Assessments in the Era of the “New FCPA”. Mike & Brent discuss the post's inspiration (01:22), the importance of conducting risk assessments that are both holistic and dynamic (03:20), how such risk assessments help companies and internal trade compliance professionals (07:44), the collective knowledge doctrine (09:41), the importance of the "battlefield effect" (10:22), the role for boards of directors and c-suite management (13:41), and conclude with the next installment of Brent Carlson's popular segment, "Managing-Up" (17:30).

Mike & Brent update listeners on the America First Trade Policy Section 4(c) Report Executive Summary (01:05) before previewing their forthcoming "Glass Onion" article in WorldECR magazine about the various layers of the "knowledge" standard under the U.S. Export Administration Regulations (03:18), including "actual knowledge" (07:23), "reason to know" (08:44), and "awareness of a high probability" (09:39). Mike & Brent then discuss relevant guidance from the U.S. Bureau of Industry & Security (12:44), parallels to U.S. Foreign Corrupt Practices Act enforcement (13:30), how the "high probability" standard is becoming the new national security enforcement paradigm (14:56), and key takeaways for trade compliance professionals (16:49) before wrapping up with yet another edition of Brent Carlson's "Managing Up" segment (19:07).

Mike & Brent's new "Glass Onion" article (subscription required): [link forthcoming!]

Mike & Brent's "Fresh Looks" series: https://www.hugheshubbard.com/fresh-looks

More about Brent: https://www.linkedin.com/in/brent-carlson-41ba692/

More about Mike: https://www.linkedin.com/in/mhuneke/

In Episode 4, Mike and Brent revisit another of their prior "Fresh Looks" posts on the NYU Law School's Program on Corporate Compliance & Enforcement ("PCCE") blog. This one concerns export control penalties and what to make of recent statements attributed to Commerce Secretary Howard Lutnick and Undersecretary Jeffrey Kessler. Mike and Brent discuss the context for the original November 14, 2023, post (00:30), how historical FCPA penalties compared to U.S. export controls penalties prior to the April 2023 Seagate resolution (01:26), what current official statements and enforcement trends mean for c-suites and boards (02:59), a recent Export Compliance Daily article regarding internal BIS discussions about enforcement priorities (04:57), how to prepare (07:23) for high probability-based enforcement (08:52), the role of the DOJ's National Security Division (11:01), and conclude with Brent Carlson's "Managing Up" segment (12:30).

Brent & Mike's "Fresh Looks" post from November 14, 2023, "From Peanuts to Prison Time – A Fresh Look at the Evolution of Export Controls Penalties" is here: https://wp.nyu.edu/compliance_enforcement/2023/11/14/from-peanuts-to-prison-time-a-fresh-look-at-the-evolution-of-export-controls-penalties/

More about Brent: https://www.linkedin.com/in/brent-carlson-41ba692/

More about Mike: https://www.linkedin.com/in/mhuneke/

Check out Mike & Brent's full "Fresh Looks" series: https://www.hugheshubbard.com/fresh-looks

Mike & Brent revisit Brent's original August 25, 2023, "Fresh Looks" post, "When Loopholes Create Liability Pitfalls: A Fresh Look at Export Controls." They discuss what inspired Brent to write the article (00:40), the Inspur Group controversy (05:38), what legacy perspectives were missing about the compliance and enforcement risks (08:25), parallels to U.S. Foreign Corrupt Practices Act enforcement (12:16), why Mike initially hated Brent's article (13:19), how the risks that Brent highlighted in August 2023 are still relevant today (17:29), the key takeaways for trade compliance professionals (18:29), and the return by popular demand of Brent Carlson's "Managing Up" segment on what trade compliance should explain to stakeholders, management and boards about the risks identified in Brent's article (20:41).

Check out Episode 2 for more on Secretary Lutnick's March 18, 2025, remarks at the BIS Update conference (see the show notes for additional reporting)

Brent's NYU PCCE Post: https://wp.nyu.edu/compliance_enforcement/2023/08/25/29814/

The entire "Fresh Looks" series: https://www.hugheshubbard.com/fresh-looks

More about Brent: https://www.linkedin.com/in/brent-carlson-41ba692/

More about Mike: https://www.linkedin.com/in/mhuneke/

Mike and Brent discuss remarks at the Bureau of Industry & Security's "Update" Conference that started today in Washington, DC (00:00), specifically Secretary of Commerce Howard Lutnick's statement that he would take a hard line against China (02:18), including a "dramatic increase" in enforcement (04:01) and fines (13:45). In the returning segment "Brent Carlson's Managing-Up," Brent identifies key takeaways for trade compliance professionals to share with stakeholders, management, and boards (15:31).

The New York Times' initial report by Ana Swanson about Secretary Lutnick's statements is here: https://www.nytimes.com/live/2025/03/18/us/trump-president-news/acce989e-9c02-50cc-9b32-9df39624fd77?smid=url-share

Check out Ian Cohen's subsequent reporting for Export Compliance Daily here: https://exportcompliancedaily.com/article/view?search_id=20580&id=2277048

More about Brent: https://www.linkedin.com/in/brent-carlson-41ba692/

More about Mike: https://www.linkedin.com/in/mhuneke/

Mike & Brent's "Fresh Looks" series: www.hugheshubbard.com/fresh-looks

In the launch of Red Flags Rising, Mike and Brent explain the concept and purpose of the pod (00:00), a recent report by Gregory C. Allen of the Center for Strategic and International Studies on "DeepSeek, Huawei, Export Controls, and the Future of the U.S.-China AI Race" (linked below) (01:43), the report's emphasis on backing strong regulations with strong enforcement (04:49) and the recently rediscovered "high probability" knowledge standard under the U.S. Export Administration Regulations (06:50), whether and how the Commerce Department's enforcement capability is impacted by recent policy and personnel decisions (11:00), parallels to the U.S. Foreign Corrupt Practices Act (13:54), and conclude with the first-ever "Brent Carlson on Managing Up" segment, providing practical tips on what trade compliance professionals can do to explain to stakeholders, the c-suite, and boards the value proposition of export controls compliance today (19:43).

Gregory C. Allen's Report: https://www.csis.org/analysis/deepseek-huawei-export-controls-and-future-us-china-ai-race

Brent & Mike's "Fresh Looks" series: https://www.hugheshubbard.com/fresh-looks

More about Brent: https://www.linkedin.com/in/brent-carlson-41ba692/

More about Mike: https://www.linkedin.com/in/mhuneke/

Teaser trailer for the new Red Flags Rising podcast!