Same Enforcement Risks Exist Regardless of “Artificial” BIS 50% Rule Threshold, Advisers Say, Export Compliance Daily

Partner Michael Huneke was quoted by Export Compliance Daily from an episode of his Red Flags Rising podcast about the US Bureau of Industry and Security’s (BIS’s) suspended Affiliates Rule and the export compliance risks that remain under existing regulations.

Mike explained that companies already face potential enforcement exposure under the Export Administration Regulations’ knowledge standard, regardless of whether a counterparty meets the Affiliates Rule’s 50% ownership threshold. He also cautioned that the rule could impose substantial due diligence burdens on compliance teams, requiring them to reconcile potentially conflicting ownership information from multiple sources.

“You’re forced into this horrible shell game. By the time you reach a conclusion, it’s probably already changed,” he said.

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