Jonathan Poling Quoted by Compliance Week on Sanctions Cases
For its article “Distilling Lessons From Recent Sanctions Cases,” Compliance Week quoted Akin Gump international trade partner Jonathan Poling regarding recent U.S. Department of Justice settlements—15 in the last five years—in cases involving sanctions or export control violations and what industry should note regarding compliance.
Poling said, “We see a real lack of the key compliance program components, especially in certain areas of export controls and sanctions, in general.” He added that a few industries, including retail, consumer goods and hospitality, may be “less aware of the need to have robust sanctions and export controls policies in place, because they don’t appreciate the risks involved in the same way that highly regulated industries like banks, oil and gas, and defense contractors do.”
Discussing one case in particular, involving a U.S.-based export company and a Russia-based procurement company that illegally exported controlled technology from the United States for use by Russian military and intelligence agencies, he said, “This case appears likely to proceed to trial at this stage. So these types of cases can and do go to trial; they don’t go to trial a lot where they involve corporate defendants, but they generally have the same chances of going to trial as an FCPA corporate case.”
Poling noted that, for companies, cooperation with the government during an investigation can be challenging, given the increase in official expectations over time and an unclear sense of what government might expect of them, noting “The government sets a high bar that must be met before it considers a company as a cooperative party in an investigation, and before it extends leniency to that company.” He added that this may include making employees available for interviews, providing access to documents located overseas and providing names of other companies that might be involved in the alleged misconduct.
The article discusses a case in which a Dutch aerospace company reached a $21 million settlement for having made more than a thousand illegal shipments to Iran, Sudan and Burma over five years in violation of the International Emergency Economic Powers Act only to have a federal judge rule that the $21 million penalty did not address the severity of the crime. Poling said, “It’s an interesting case to watch because the federal district court judge rejected a deferred-prosecution agreement by the government and the company and asserted authority to reject the agreement on the substantive grounds of the settlement. It could be a very important case for how courts will examine deferred prosecution agreements and what authority they have to review or deny them.”