Welcome to Red Flags Rising, where we examine how geopolitics and national security are reshaping corporate enforcement and compliance.
In an era where “economic security” drives government intervention through increasingly strict and consequential export controls, economic sanctions, inbound and outbound investment restrictions, and tariffs, legacy mindsets and assessments of enforcement risk create liability p ...
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Mike & Brent react to recent media reports of several congressional committees demanding information from U.S. companies. They revisit their March 14, 2024, NYU PCCE blog post, "“Expect Some Illumination”: A Fresh Look at U.S. Congressional Hearings in the Era of Sanctions and Export Controls as the New FCPA" (01:21), then discuss common pitfalls to avoid when providing information to Congress, including the importance of thinking critically about how your data could be interpreted and used by Congress (02:28), how information provided by Congress can be shared across the U.S. federal government (03:38), the danger of being distracted by political theater (04:13), the value of having a "red team" (or "blue team," depending on your political leanings) vet your data with hostile eyes before sending data to Congress (06:48), anticipating and preempting difficult questions that the data might raise (08:06), keeping in mind the geopolitical context (09:05), ensuring that investor relations and communications coordinate with legal and compliance regarding public statements (10:30), and the oversight role of boards of directors (12:49). They conclude with another installment, still by popular demand, of Brent Carlson's "Managing Up" (14:05). Mike & Brent's prior NYU PCCE post: https://wp.nyu.edu/compliance_enforcement/2024/03/14/expect-some-illumination-a-fresh-look-at-u-s-congressional-hearings-in-the-era-of-sanctions-and-export-controls-as-the-new-fcpa/ More about Brent: https://www.linkedin.com/in/brent-carlson-41ba692/ More about Mike: https://www.linkedin.com/in/mhuneke/ The entire "Fresh Looks" series: hugheshubbard.com/fresh-looks
Mike & Brent connect the dots between the Administration's signals regarding U.S. export control enforcement, recent media reports, and how trade compliance teams can best prepare for what comes next. They discuss the overall climate of uncertainty (01:03), an April 8, 2025 report by Reuters about a potential large U.S. export controls fine in the works (01:35), how companies can best respond to a counterparty being put on the U.S. Bureau of Industry & Security's "Entity List" (05:47), how to respond to U.S. government outreach or administrative subpoenas (07:27), an April 10, 2025 report by Export Compliance Daily about a potential uptick in administrative subpoenas (11:39), their prior "Fresh Looks" post on responding to government inquiries (13:51), and conclude with another installment of Brent Carlson's "Managing-Up" (17:38). Reuters article: Karen Freifeld, "Exclusive: TSMC could face $1 billion or more fine from US probe, sources say," Reuters (Apr. 8, 2025): https://www.reuters.com/technology/tsmc-could-face-1-billion-or-more-fine-us-probe-sources-say-2025-04-08/ Export Compliance Daily: Ian Cohen, "Gov't May Be Issuing More Export Control-Related Subpoenas, Industry Lawyer Says," ECD (Apr. 10, 2025) (subscription required): https://exportcompliancedaily.com/article/view?search_id=24312&id=2302224 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: https://www.hugheshubbard.com/fresh-looks
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