This newsletter is a listing of the latest changes in export control regulations through June 30, 2026. The newsletter is provided as a complimentary service to assist exporters with their ITAR and EAR export compliance responsibilities. It provides a summary of recent changes to export control regulations or other regulatory matters of interest that may impact your company’s international trade and export compliance functions. Call us at 703-847-5801 or email info@fdassociates.net with questions or comments.
See also our “Latest Sanctions Fines & Penalties” section below for an update on companies and
persons denied export privileges by the United States Government.
In this newsletter, we have added a specific DDTC FAQs section, we think this will be of interest to our readers.
REGULATORY UPDATES
President
Strengthening Customs Enforcement
June 3, 2026: 91 Fed. Reg. 35125: The President issued Executive Order (“EO”) 14411 Strengthening Customs Enforcement. Customs enforcement is essential to the national security, foreign policy, and economy of the United States. Effective customs enforcement prevents the importation of unlawful and dangerous goods; ensures importers of record (IORs) are correctly identified and accountable for duties owed; and guarantees compliance with numerous Federal laws, including laws governing forced labor, rules of origin, origin marking, intellectual property, revenue collection, and product safety.
The President ordered the Secretary of Homeland Security to revise the regulations and polices to:
- Impose stricter Importer of Record requirements on foreign importers of record;
- Implement import disclosure and certification requirements;
- Increase enforcement and penalties;
- Streamline the seizure and disposal process; and
- Increase agency transparency.
Details of the EO can be found at the following links.
https://www.whitehouse.gov/presidential-actions/2026/06/strengthening-customs-enforcement/
https://www.federalregister.gov/documents/2026/06/10/2026-11595/strengthening-customs-enforcement
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Fact Sheet: The President Signed Directive on AI in the National Security Enterprise
June 5, 2026: The President signed a National Security Presidential Memorandum on Artificial Intelligence (AI) in the National Security Enterprise, establishing a new framework to put the most advanced, secure, and reliable AI systems into the hands of America’s warfighters and intelligence professionals while ensuring their responsible use.
- The Memorandum directs the national security enterprise to accelerate AI adoption to meet surging demand, adapt the best commercial and open-source technologies for mission use, assure that fielded systems are robust, steerable, controllable, and preserve clear lines of accountability under the Constitutional chain of command.
- The Memorandum strengthens national security capabilities, directing the rapid onboarding of the most advanced AI models from multiple vendors, driving the buildout of next-generation, high-security computing facilities to run future AI systems at scale, and bolstering the talent pipeline, including by establishing an AI National Security Strategic Reserve of top non-governmental experts.
- The Memorandum directs the Secretary of War to issue an updated directive on autonomy in weapon systems and requires annual review of key guidance across the national security enterprise to keep pace with the rapidly advancing AI frontier.
- The Memorandum directs departments and agencies to ensure that no entity, commercial or otherwise, can disable, degrade, or modify an AI system that American warfighters depend on without prior approval. It also offers new partnerships with willing private-sector companies to secure America’s cutting-edge AI against global threats.
- The Memorandum rescinds and replaces the Biden Administration’s NSM-25, an outdated document that burdened American AI adoption with ideological mandates and fostered dangerous single-vendor dependencies that left our warfighters exposed.
The complete fact sheet and the Presidential Memorandum can be found at the following links.
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Fact Sheet: The President Defends America’s Warfighters and Intelligence Officers Against Cyber Threats
June 12, 2026: The President signed a National Security Presidential Memorandum to bolster the cybersecurity of America’s National Security Systems (NSS) and modernize NSS governance to meet the cyber challenges of 2026 and beyond.
- NSS encompasses the US’ most sensitive computer systems – those that process classified information or support military and intelligence missions.
- The Memorandum establishes a clear structure, authorities, roles, and responsibilities for the governance of NSS and accountability to NSS cybersecurity requirements for its owners and operators.
- The Memorandum helps ensure that NSS owned or operated by civilian agencies receive a defense commensurate to those of the Department or War (DOW) and Intelligence Community (IC).
- The Memorandum reestablishes the Committee on National Security Systems (CNSS) and modernizes it for the first time in over 35 years to establish baseline cybersecurity requirements for all NSS and enhance accountability and coordination across agencies to implement necessary cyber defenses across all NSS.
- The CNSS will oversee the cybersecurity of NSS across the US Government and issue binding security directives to all NSS owners and operators.
- The CNSS will provide collaboration, standardization, and efficient resource management by promoting coordination and information sharing across Federal agencies, public-private partnerships, and international liaison activities.
- The CNSS will leverage the combined authorities and resources of the Federal Chief Information Officer, the Chief Information Officers of the DOW and IC, and the Director of the National Security Agency (NSA) to ensure that there are no gaps or weak links in NSS defenses.
- The Memorandum empowers the Director of the National Security Agency as the National Manager for National Security Systems and the cryptologic authority of NSS. It allows the Director to leverage the full technical power of the National Security Agency to provide advanced defenses and assistance in order to bolster the security of NSS across the U.S. government.
- The Memorandum promotes the efficient use of taxpayer dollars by encouraging the use of shared services in NSS and requiring the recission of outdated requirements.
- The Memorandum establishes a Policy Coordination Committee to work with the CNSS to request an assessment of NSS cybersecurity posture.
The complete fact sheet and the Presidential Memorandum can be found at the following links.
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The President Secures the Nation Against Advanced Cryptographic Attacks
June 22, 2026: The President signed an Executive Order (“EO”) 14412 to safeguard America’s most sensitive data, our critical infrastructure, and the digital economy that drives jobs and growth.
- The Order directs the Office of Management and Budget (OMB) and the National Cyber Director to lead an accelerated, nationwide migration to post-quantum cryptography (PQC), ensuring our Nation and our data stay secure as quantum technology evolves.
- The Order directs the Department of Commerce, the National Security Agency, and the Department of Homeland Security to deliver clear, practical guidance to agencies on effectuating and accelerating PQC migration. It also directs agencies to designate a PQC migration lead and to transition high value assets for certain uses to PQC by 2030 and 2031 depending on the use case.
- The Order directs the Department of Commerce to initiate a pilot project for PQC migration, to be completed by December 31, 2027.
- The Order directs the State Department and other Federal agencies to assist and encourage critical infrastructure operators, foreign governments, and foreign industry groups in their transitions to PQC, reinforcing U.S. leadership on the world stage.
- The Order directs OMB, the Department of War, the National Aeronautics and Space Administration, and the General Services Administration to coordinate efforts to identify cost-saving opportunities in the national PQC migration strategy.
- The Order directs the Federal Acquisition Regulatory Council to require covered contractors to meet certain Federal cybersecurity standards and vulnerability disclosure policies by the end of 2030.
Putting America First In Cybersecurity: The President promoted a key technology that will protect American systems in the quantum era, ensuring defense and resilience against potential disruptions to critical systems or data breaches.
- This Order is a bold, decisive step to protect the American people, preserve our economic strength, secure our global scientific leadership, and maintain our technological advantage for generations to come.
- By accelerating the U.S. Government’s PQC migration timeline, this Order ensures that American cybersecurity keeps pace with emerging technology and recognizes the reality of the accelerating quantum industry.
- The pilot program will showcase a successful migration by 2027, setting a clear example for agencies to fortify their cyber defenses as quantum technology advances.
- The Administration will help critical‑infrastructure owners adopt the same protections, keeping our power grids, water systems, and transportation networks safe.
The complete fact sheet and the EO can be found at the following links.
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Fact Sheet: The President Ushers in the Next Frontier of Quantum Innovation
June 22, 2026: The President signed Executive Order (“EO”) 14413 to supercharge U.S. innovation in quantum technologies and strengthen our national security in this critical area.
- The Order directs the Assistant to the President for Science and Technology, in coordination with other relevant government leaders, to update the National Quantum Strategy to support quantum-enabling technology and encourage partnerships with U.S. industry.
- The Order establishes a national effort to develop the first ever quantum computer powerful enough to initiate the era of quantum-enabled scientific discovery and accelerate quantum capabilities for commercial applications. This includes evaluations of quantum computing system capabilities, an assessment of the resources necessary to build this science-enabling quantum computer, and development of specifications for such a system.
- The Order directs the Assistant to the President for Science and Technology to coordinate this effort across the Departments of Energy, War, Commerce, and the Intelligence Community, as well as with U.S. industry and research leaders.
- The Order calls on the Secretaries of Commerce, War, and Energy and the NASA Administrator to develop plans to deploy quantum-enabled sensors and networks in the next five years.
- The Order prioritizes the development of a strong American quantum workforce through the expansion of registered apprenticeships, credentials, and the creation of National Quantum Workforce Development Institutes. It also directs the development of a plan and other measures to ensure adequate domestic supply chains and manufacturing capabilities for quantum technologies, as well as appropriate funding support for such efforts.
- The Order reconstitutes the National Quantum Initiative Advisory Committee and directs the expansion of the Quantum Counterintelligence Protection Team. It also directs appropriate engagement with international partners on quantum matters.
Strengthening America’s Quantum Advantage: The President recognizes that quantum technologies are on the verge of a massive commercial breakthrough and require a bold new policy approach to ensure America continues to lead the field.
- Quantum technologies, like a quantum computer or a quantum sensor, will provide transformational capabilities in manufacturing, drug discovery, energy, agriculture, and more. These breakthroughs will drive American innovation, power economic growth, generate high-paying jobs in existing and entirely new industries, and bolster national security.
- Competing nations are moving quickly to challenge America’s quantum leadership, including adversarial countries that would use quantum to undermine U.S. economic and national security.
- The Order ensures that the United States enters this new era of quantum innovation with ambitious national goals, a strong domestic workforce, and trusted supply chains in coordination with our international allies and partners.
The complete fact sheet and the EO can be found at the following links.
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Department of State, Directorate of Defense Trade Controls (DDTC)
Proposed Rule: ITAR Part 130 Changes to Reduce Reporting Burden
June 15, 2026: 91 Fed. Reg. 35926: DDTC published in the Federal Register a proposed rule to revise Part 130 and related sections of the International Traffic in Arms Regulations (ITAR) to modernize, streamline, and standardize reporting on certain political contributions and fees or commissions related to the sale of defense articles and defense services to or for a foreign military or international organization.
The proposed revisions include:
- Increasing the monetary thresholds that trigger reporting of political contributions and fees or commissions to account for inflation;
- Consolidating reporting to the Department to a single annual submission, rather than on a transaction-by-transaction basis; and
- Implementing an electronic submission form to reduce administrative burden and to collect and report more accurate information.
The proposed rule is in support of the policy directed in Executive Order 14268 to reduce rules and regulations involved in the development, execution, and monitoring of foreign defense sales and arms transfer cases.
Comments are accepted until August 14, 2026.
https://www.pmddtc.state.gov/sys_attachment.do?sys_id=7e2e0eb71b91c354fd4d87f4604bcbf7
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Fraudulent DTCC Communications
June 25, 2026: The Directorate of Defense Trade Controls posted to its homepage that it has become aware of certain companies receiving fraudulent communications purporting to be directed disclosures from the Office of Defense Trade Controls Compliance (DTCC). The fraudulent communications in question are not from DTCC, and these fraudulent communications have been referred to the relevant law enforcement authorities. If you believe that you may have received such fraudulent communications, do not respond or click on any hyperlinks or attachments without first reaching out to DTCC at DTCC-CaseStatus@state.gov to confirm the authenticity of the correspondence.
https://www.pmddtc.state.gov/ddtc_public
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Guidelines for Preparing Agreements Revision 5.2 Released
June 26, 2026: The Directorate of Defense Trade Controls posted to its website Guidelines for Preparing Agreements Revision 5.2. The guidelines went into effect on May 26, 2026. Revision 5.2 makes the following changes:
- All ITAR § 124.8(a)(5) references in the document have been revised to include reference to new ITAR § 126.7 to clarify that the exemption may be used to retransfer and reexport defense articles pursuant to this exemption that were originally exported via an agreement*
- Modifies Sections 8 (Congressional Notification) and 15 (Exporting Hardware in Furtherance of Agreements) to remove guidance that has been moved to stand-alone web documentation
- Congressional Notification Guidance. General guidance on the Congressional Notification process formerly found in Version 5.1, Section 8, is now available here:
Home → Conduct Business → Congressional Notifications
- “In Furtherance Of” licenses. Guidance on the submission of IFO licenses is now available here:
Home → Conduct Business → Licenses, Agreements, and Other Authorizations → License Guidance → License Applications in Furtherance of (IFO) an Agreement
- Modifies Section 10.3 (Requests for DDTC Vetting of § 126.1 Nationals) to conform with current DDTC practice of requiring names for all § 126.1 dual and third country nationals (DN/TCN) when DDTC vetting is requested
- Clarifies that the requirement to identify end-use platforms includes end-use systems and variants Clarifies that end-use platforms and end-use systems, including variants, must be included in the description in block 20 of the DSP-5 vehicle
- Reconciles the “Contract Employee” clause in Section 11.3 (Agreement Language for Non-Regular Contract Employees) with the clause in Section 2.2 ((TAA/MLA Template).
- Reconciles the “Expedited Execution” clause in Section 2.2 (TAA/MLA Template) with the clause in Section 13.1 (Expedited Execution)
- Corrects minor typographical errors found in Revision 5.1 (Uploading Submission Documents)
*Agreements must conform to the ITAR §124.8(a)(5) statement’s current language at the next amendment, whether major or minor. Note that parties to an agreement MAY NOT use the ITAR §126.7 exemption to reexport or retransfer defense articles originally exported via an agreement unless the agreement has been updated. Refer to the applicable FAQ.
https://www.pmddtc.state.gov/sys_attachment.do?sys_id=f8033cd597b98f5067b1791ad053af3d
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DDTC Name And Address Changes Posted To Website
June 1 through June 30, 2026: The Directorate of Defense Trade Controls (DDTC) posted the following name and/or address changes on its website at
- Applied Intuition, Inc. changed its address from 145 E. Dana St, Mountain View, California 9404 to 860 W. California, Sunnyvale, CA 94086;
- ARKA Group, L.P. changed its address from 100 Wooster Heights Road, Danbury, CT 06810 to 12021 Sunset Hills Road, Reston, VA 21090;
- Siemens Industry Software ULC/Siemens Logiciels (Industrie), ULC changed its name to Siemens Industry Software Limited/Siemens Logiciels (Industrie), Limitee as a result of a rebranding; and
- Arcam AB, Designvagen 2, Molnlycke 435 33 Sweden changed its address to Flojelbergsgatan 10, Molndal, 433 37, Sweden.
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Bureau of Political-Military Affairs – Foreign Military Arms Sales
BPMA Notified Congress of Potential FMS Sales to the following Countries:
Details regarding each case can be found at the links below.
- Vietnam – C-130 Sustainment
- New Zealand – MH-60R Multi-Mission Helicopters
- New Zealand – MK 54 Torpedoes
- Republic of Korea – Joint Direct Attack Munitions
- Italy – Assault Amphibious Vehicles
- Kuwait – Counter-Unmanned Aerial Systems Platforms
- Denmark – Joint Air-to-Surface Standoff Missiles with Extended Range
- United Kingdom – Large Aircraft Infrared Countermeasures
- Republic of Korea – AIM-120C-8 Advanced Medium Range Air-to-Air Missiles
- Brazil – FIM-92K Stinger Missiles
- Singapore – Common Fire Control System
- Austria – UH-60M Black Hawk Helicopters
- Australia – F/A-18F & EA-18G Growler Aircraft Training
- Advancing Trilateral Cooperation to Disrupt Democratic People’s Republic of Korea (DPRK) Cyber-Enabled Revenue Generation
- Singapore – Hellfire Missiles
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Department of Defense – Office of the Under Secretary of Defense (Acquisition and Sustainment)
June 10, 2026: 91 Fed 35189: The Deputy Secretary of Defense published its list of entities that qualify for designation as “Chinese military companies,” are engaged in providing commercial services, manufacturing, producing, or exporting (as required by Section 1260H(g)(2)(B)(ii)), and operate directly or indirectly in the United States (as required by Section 1260H(a)) in accordance with section 1260H.
This list prohibits the Department of Defense (“DOD”) or Department of War (“DOW”) from procuring goods from listed entities. For exporters and importers this list should be incorporated into the sanctioned, denied and restricted party screening process to identify risk or red flags that could impact its business.
A company contemplating engaging in a transaction with a DOD listed entity, that is not listed on a sanctioned, denied or restricted party list should consider the following:
- Increased risk of the DOD listed entity being placed on a sanctioned, denied or restricted party list.
- Licensing requirement under § 744.20 which requires a BIS export license for ECCN listed in Supplement No. 2 to Party 744 when there is knowledge that the item will be used by among others, the Chinese military or an entity the supports the Chinese military or military end use.
- Licensing requirements under § 744.21 for all items subject to the EAR when there is knowledge that the item will be used by among others, the Chinese military intelligence, an entity the supports the Chinese military intelligence, or Chinese military intelligence.
- The implications of the BIS 50% rule (coming this fall), Part 744.20 – Restrictions on certain military end uses or military end users, and Part 744.21 – Restrictions on exports, reexports, and transfers to certain military-intelligence end uses or end users when engaging with a DOW listed entity in the US.
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Department of Energy – National Nuclear Security Administration (NNSA)
Assistance to Foreign Atomic Energy Activities
June 16, 2026: 91 Fed. Reg. 36071: On June 16, 2026, the Department of Energy issued a final rule to add Thailand to the generally authorized destinations for exports of controlled nuclear technology and assistance under DOE’s regulation on Assistance to Foreign Atomic Energy Activities.
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General Services Administration
General Services Acquisition Regulation; Acquisition of Information and Communication Technology; Notice of Listening Sessions and Request for Comments
June 17, 2026: 91 Fed. Reg. 36559: The General Services Administration (GSA) is seeking public comment on the draft of a new General Services Administration Acquisition Regulation (GSAR) clause regarding basic safeguarding of data within Large Language Model Artificial Intelligence Systems (LLMs). Due to the complexity of the issue, GSA is publishing this notification and draft clause to gather feedback from stakeholders before taking future action ( e.g., deviation and/or formal rulemaking).
The rapid advancement and adoption of Large Language Model Artificial Intelligence (LLM) systems present both unprecedented opportunities and significant challenges for Federal agencies. As GSA establishes contracts for these technologies, ensuring the integrity, security, and appropriate handling of Government Data is paramount. This notification introduces a new GSAR clause, 552.239-7001, “Basic Safeguarding of Data within Large Language Model Artificial Intelligence Systems (LLMs),” to address these critical concerns. This clause may be used in GSA’s Government-wide contracts ( e.g., Federal Supply Schedule, GWACs, and OASIS+).
This clause is developed in response to the growing use of LLMs across Government and the need for a standardized approach to data protection, intellectual property, and ethical AI development when LLM’s are used to process Government data. It is informed by principles outlined in Executive Orders ( e.g., Executive Order 14110, Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence and OMB Memorandums (e.g., OMB memorandum M-25-22, Driving Efficient Acquisition of Artificial Intelligence in Government, and comments received on the first draft of this clause. The first draft was issued through GSA Interact on January 12, 2026 ( https://buy.gsa.gov/interact/community/6/activity-feed/post/4d70761f-60f8-4eb0-8119-052ec4c7c9b3/Advanced_Notice_for_MAS_Refresh_31_and_Upcoming_Mass_Modification).
Interested parties should submit written comments as noted below on or before August 3, 2026, to be considered in the formation of the final GSAR clause.
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Department of Homeland Security – U.S. Customs and Border Protection
Indefinite Suspension of the De Minimis Exemption for Mail Shipments and New Postal Informal Entry Process
June 24, 2026: 91 Fed. Reg. 37801: U.S. Customs and Border Protection (CBP) published an interim final rule implementing an indefinite suspension of the de minimis administrative exemption for imports valued at $800 or less arriving through the international postal network. This interim rule also establishes a new postal informal entry process for certain merchandise entering the United States through the mail environment.
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Indefinite Suspension of the De Minimis Exemption for Merchandise Arriving Through All Modes Other Than the International Postal Network
June 24, 2026: 91 Fed. Reg. 37789: U.S. Customs and Border Protection (CBP) published an interim final rule implementing an indefinite suspension of the de minimis administrative exemption for imports valued at $800 or less arriving via all modes other than through the international postal network. This indefinite suspension means that all entries of merchandise valued at $800 or less arriving through all modes other than the international postal network must utilize formal or informal entry procedures.
LATEST SANCTIONS FINES & PENALTIES |
This section of our newsletter provides information on the latest sanctions, fines and penalties for export violations or matters of non-compliance with the ITAR or EAR issued by the US government enforcement agencies. It is provided as a service to exporters and associates of FD Associates to remind them of the importance of extreme due diligence in all international trade and export compliance matters, particularly those involving exports subject to the ITAR or the EAR. Don’t let this happen to you or your company! Call us with questions or concerns at 703-847-5801 or email info@fdassociates.net.
Fines and Penalties
Settlement Agreement between the U.S. Department of the Treasury’s Office of Foreign Assets Control, and FTI Consulting, Inc.
June 1, 2026: The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with FTI Consulting, Inc. (“FTI”). FTI agreed to remit $1,050,000 to settle its potential civil liability for its apparent violations of OFAC sanctions targeting Russia’s financial sector. Between April 2019 and May 2021, FTI indirectly dealt in prohibited debt of VTB Bank OAO (“VTB”), a Russian state-owned bank, on six occasions. These prohibited dealings occurred when FTI extended debt of more than 14 days maturity to VTB by indirectly issuing invoices to VTB that went unpaid or were paid long past the expiration of the permissible 14-day tenor. All the while, even when invoices remained unpaid for long periods, FTI continued to perform valuable services for the benefit of VTB and continued to extend prohibited debt to VTB.
FTI is often engaged by law firms to provide consulting services in support of firms’ clients. In late 2018, a global law firm reached out to an FTI Senior Managing Director in the economic consulting unit about engaging FTI to provide expert economic consulting services on behalf of the law firm’s client, VTB, for a civil suit in Singapore. FTI, the law firm, and VTB soon thereafter agreed in principle to have FTI support VTB in the litigation, with the actual contract forthcoming. At that time, and at all relevant times thereafter, U.S. persons were prohibited from certain dealings with VTB because VTB had been added to OFAC’s Sectoral Sanctions Identification (SSI) list. Specifically, VTB was subject to Directive 1 under Executive Order (E.O.) 13662 (“Directive 1”), which prohibits U.S. persons from dealing in new debt of more than 14 days maturity of any person subject to it; the Directive also prohibits any transaction that evades or avoids any of the prohibitions set forth in Directive 1. OFAC’s guidance on Directive 1 explains that the issuance of an invoice by a U.S. person is an example of new debt subject to the restrictions of Directive 1, that U.S. persons are prohibited from extending debt with an impermissible term to a non-sanctioned party if an SSI entity is an indirect borrower, and that such debt may not be issued “for the benefit of” an SSI entity by a U.S. person.2party if an SSI entity is an indirect borrower, and that such debt may not be issued “for the benefit of” an SSI entity by a U.S. person.
In early 2019, FTI’s chief compliance officials, who recognized that dealing with VTB could expose FTI to sanctions risks, deliberated over different payment options for the provision of FTI’s economic consulting services for VTB. Pursuant to the compliance officials’ advice, and in collaboration with the law firm and VTB, FTI set up its engagement in support of VTB to be directly with the law firm. As agreed in the attendant letter of engagement between FTI and the law firm, FTI would issue invoices to the law firm; upon the law firm’s receipt of payment from VTB for FTI’s invoices, the law firm would pay FTI. FTI had no recourse to collect payment from the law firm unless and until the firm received payment from VTB for payment of FTI’s invoices. FTI also had no recourse against VTB if the invoices went unpaid.
In April 2019, FTI performed work on the litigation matter and sent the law firm two invoices. The law firm then sent the invoices, totaling approximately $54,000, to VTB for payment. By indirectly issuing invoices that VTB was ultimately responsible for paying, FTI extended new debt to VTB.
In May 2019, FTI had yet to be paid for the two invoices it had already issued when it began discussions with the law firm about performing additional work for the same litigation matter in Singapore. The law firm relayed messages between FTI and VTB about the scope of the work and budget, which was subject to VTB’s approval. As with the prior engagement, an FTI Senior Managing Director based in New York consulted with FTI’s Legal and Compliance departments regarding the engagement’s terms and during the second engagement. FTI and the law firm agreed to use the same payment structure as the first engagement (which VTB had approved), where the law firm was engaged as FTI’s client in the letter of engagement, with payment of FTI’s fees subject to the law firm first receiving payment from VTB. FTI and the law firm agreed to use a retainer for the second engagement, which called for FTI drawing down funds against a retainer VTB would first pay to the law firm.
On June 7, 2019, FTI sent the law firm an invoice of approximately $90,000 for the retainer payment, which the law firm told FTI it had sent to VTB, and assured FTI that the law firm would get payment from VTB for FTI. VTB, however, did not make the retainer payment. Despite the lack of funding for the retainer, FTI commenced work on the second engagement and sought payment that would have originated from VTB for the retainer. In late June 2019, FTI joined a call with the law firm and VTB to discuss the overdue payments.
Despite not receiving payment for the two April 2019 invoices for the first engagement, nor payment for its third invoice for the retainer for the second engagement, FTI continued to work on the VTB litigation matter by drafting expert economic analysis. On July 4, 2019, FTI inquired again about VTB’s lack of payment for the retainer amount and requested the law firm set up another call with VTB if it continued to fail to make the outstanding payment. FTI issued its fourth invoice on July 13, 2019; by that time the first three invoices were outstanding for 99, 92, and 35 days, respectively. FTI continued to work on the VTB matter without receiving payment and issued its fifth invoice on July 24, 2019. In September 2019, VTB made a partial payment of approximately $57,000 to the law firm for the retainer invoice, 90 days after FTI had first issued the invoice; the law firm in turn paid FTI. FTI issued its sixth and final invoice for the VTB matter on November 26, 2019.
As of March 2020, after having issued six invoices with a total value of approximately $353,862, FTI had received only one partial payment for one of the six invoices. At that time, FTI’s Senior Manager leading the consulting engagement sought assistance from FTI’s compliance officer to resolve VTB’s lack of payment. FTI subsequently told the law firm it expected the law firm to pay all outstanding invoices using its own funds. The law firm, however, reiterated the terms of the letter of engagement and told FTI that the law firm did not take on the credit risk of VTB not making payment. In June 2020, VTB made a second payment of approximately $19,400 for one of FTI’s invoices to the law firm, followed by the law firm paying FTI, 198 days after FTI had issued the invoice. FTI continued to seek answers and payments from the law firm until May 2021, when the law firm notified FTI that it was no longer representing VTB. FTI did not attempt to collect payment from the law firm after the law firm terminated its relationship with VTB. FTI subsequently submitted a notification of a potential violation to OFAC after investigating FTI’s actions.
Under § 589.202(c) of the Ukraine-/Russia-Related Sanctions Regulations (URSR), 31 C.F.R. part 589, the following activities by a U.S. person or within the United States are prohibited: for new debt or new equity issued on or after November 28, 2017, all transactions in, provision of financing for, and other dealings in new debt of longer than 14 days maturity or new equity of persons determined to be subject to Directive 1, their property, or their interests in property. Moreover, the prohibition in Directive 1 of E.O. 13662, as implemented in § 589.213 of the URSR, 31 C.F.R. part 589, prohibits any transaction on or after the effective date that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in 31 C.F.R. part 589.
Between April 2019 and May 2021, FTI appears to have violated §§ 589.202 and 589.213 on six occasions when FTI dealt in new debt of longer than 14 days maturity to VTB, an entity that at the time of the transactions was subject to the prohibitions of § 589.202 of the URSR. FTI dealt in new debt of VTB through its indirect issuance of invoices, which represented new debt subject to the restrictions of Directive 1, to VTB, which VTB was responsible for paying and from which VTB benefited (the “Apparent Violations”).
The settlement amount of $1,050,000, aggravated above the base penalty, reflects OFAC’s consideration of the General Factors under the Enforcement Guidelines, in particular the importance of anticipated impact of promoting future compliance by similarly situated persons.
OFAC determined the following to be aggravating factors:
- FTI, with the involvement of certain senior managers, recklessly missed multiple warning signs that it was dealing in prohibited debt of VTB. At the outset of the engagement, FTI was aware of and discussed the prohibitions applicable to VTB; the risks it identified informed the unique payment arrangement FTI entered into with the law firm. Thereafter, despite believing the arrangement lawfully shielded FTI from the risk of violation, FTI should have realized it was dealing in prohibited debt of VTB when it repeatedly issued invoices for ultimate payment by VTB, continued to work on and issue new invoices for the VTB matter despite not being paid by VTB, and joined a call with VTB to discuss late payments. Another warning sign arose when the law firm told FTI that the law firm did not take on the credit risk of VTB’s non-payment of FTI’s invoices.
- FTI harmed the objectives of the sanctions program by extending an impermissibly long period of credit to VTB when the aim of U.S. sanctions policy was to prevent VTB from receiving such benefits. The indirect payment arrangement caused harm by obscuring transaction activity that, under a direct payment arrangement, could have successfully been screened against by intermediary parties.
- FTI is a large and commercially sophisticated entity with an extensive global presence, providing consulting services to international business entities in various industries and jurisdictions. In light of OFAC’s broad prohibitions on indirect dealings with sanctioned persons, this action seeks to promote greater awareness and scrutiny of such undertakings and deter future violations by the subject person and other similarly situated persons.
OFAC determined the following to be mitigating factors:
- FTI agreed to toll the statute of limitations and cooperated with OFAC’s investigation by providing comprehensive contemporaneous documentation about the underlying conduct, including by waiving privilege.
- The volume and amount of the transactions at issue is very small compared to the total amount of payments that FTI makes and receives from clients and law firms.
- FTI has made enhancements its sanctions compliance program, including by: (1) requiring training that addresses sectoral sanctions and raising awareness within its legal department with respect to law firm engagements in particular; (2) updating its sanctions compliance and restricted party screening policies and procedures; (3) supplementing its sanctions compliance resources; and (4) bolstering risk assessments and implementing additional controls in response to Russia’s full-scale invasion of Ukraine.
- FTI has not been the subject of a Finding of Violation or Penalty Notice by OFAC in the past five years.
https://ofac.treasury.gov/recent-actions/20260601_33
https://ofac.treasury.gov/media/935651/download?inline
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CEO of Iran Tech Company Arrested on Federal Charge of Supplying U.S. Equipment to Iran’s Nuclear and Military Establishment
June 3, 2026: The U.S. Department of Justice announced the arrest of a dual U.S.-Iranian national and CEO of an Iran-based technology company for violating U.S. sanctions against Iran by acquiring sophisticated U.S.-origin networking, security, and encryption equipment for Iranian customers — including the Iranian regime’s nuclear and military establishments.
According to the affidavit filed with the complaint, Ghomi is the founder, owner, and CEO of Faraz Pardaz Rayaneh Co. Ltd. (FPR), a Tehran-based computer networking company. For more than a decade, Ghomi has used FPR to procure U.S.-origin networking equipment for customers in Iran in violation of U.S. sanctions. Ghomi or FPR never obtained a license from the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) authorizing those transactions.
Ghomi identified, negotiated, purchased, and arranged the shipment of large quantities of controlled U.S. technology for his own company. From 2011 to 2015, he used his own eBay and PayPal accounts to make more than 400 purchases of computer-networking equipment, directing the goods to intermediaries in the United Arab Emirates (UAE). In 2023, Ghomi personally negotiated the purchase of U.S.-origin networking equipment directly from suppliers in Minnesota and Nebraska, routing it through a UAE front company and on to FPR in Iran.
None of these items could be lawfully exported to Iran without a license from OFAC.
From 2014 to 2018, Ghomi arranged the smuggling of more than 250 metric tons (275.6 U.S. tons) of networking equipment into Iran, using freight forwarders and intermediaries in Dubai to disguise that Iran was the true destination.
“Ghomi is accused of aiding our declared enemies by selling U.S.-origin computer networking parts to Iran and earning millions of dollars in violation of U.S. sanction laws,” said First Assistant U.S. Attorney Bill Essayli for the Central District of California. “Our nation’s laws prohibiting doing business with one of the world’s largest state sponsors of terrorism must be enforced and obeyed. We will hold him accountable by seeking an appropriate prison sentence and by seizing his assets, including his $35 million Newport Beach mansion.”
Ghomi knew this conduct was illegal and took deliberate steps to conceal it. He directed his UAE co-conspirators to keep his name off shipping paperwork, to omit invoices from shipments bound for Iran, and on at least two occasions to hide U.S.-origin computer equipment inside larger shipments. He used front companies in the UAE to obscure his role, and he personally received warnings on invoices and software licenses that exporting these goods to Iran was prohibited. Ghomi and his co-conspirators referred to Iran as “Motherland” in their internal correspondence concerning the equipment’s procurement.
FPR’s annual sales exceeded $10 million and ran to hundreds of Iranian companies and government entities, many of which were subject to U.S. sanctions. A relatively small but significant portion of that business went to the most sensitive end-users in Iran: the Iranian regime’s nuclear and military establishment.
From 2017 to 2023, FPR supplied U.S.-origin computer networking equipment to the Atomic Energy Organization of Iran (AEOI) — the Iranian government agency responsible for Iran’s nuclear program, including its centrifuge and uranium-enrichment programs. The U.S. State Department sanctioned AEOI in 2020 for playing a leading role in Iran’s nonperformance of its nuclear commitments, including exceeding the limits on its uranium stockpile and enrichment levels.
According to the affidavit, AEOI required FPR to register as an approved vendor, which it did in 2021 and 2022. From 2014 to 2022, FPR supplied U.S.-origin networking, security, and encryption equipment to Iran’s Ministry of Defense and Armed Forces Logistics — the Iranian ministry responsible for research, development, and manufacturing across Iran’s defense enterprise — and to affiliated military and defense-electronics entities. FPR’s 2017 contract with Iran Computer Industries, signed by Ghomi, expressly identified the buyer as the “Ministry of Defense and Armed Forces Logistics — Iran Computer Industries.”
Ghomi laundered the proceeds of his illegal business into the United States, depositing FPR’s Iranian sales revenue into its operating account at a sanctioned Iranian bank and then sweeping those funds to himself. Within days, he received corresponding wires into his U.S. accounts from a rotating set of unrelated trading companies and exchange houses in the British Virgin Islands, Hong Kong, Turkey, and the UAE. Those wires bore false descriptions such as “Buying Goods” and “For Consulting Fees.”
From 2011 to 2024, Ghomi moved more than $15 million from Iran into his U.S. bank accounts and into a construction escrow account held on his behalf. He falsely reported those funds to the IRS as a foreign inheritance. Ghomi’s federal tax returns reported almost no income, his highest reported income in any year being $20,684. Ghomi claimed the Earned Income Tax Credit, a federal tax break for low- to moderate-income working individuals and families, in seven different tax years. Over the same period, Ghomi reported more than $1.7 million in home-mortgage interest and $1.25 million in state and local real-estate taxes on his federal income tax returns.
If convicted, Ghomi would face a maximum penalty of 20 years in prison.
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Robert Bosch GmbH (Bosch) To Pay $36 Million Penalty to BIS for Violations Pertaining to Shipments to Huawei
June 17, 2026: The Department of Commerce’s Bureau of Industry and Security (BIS) announced a settlement agreement with Robert Bosch GmbH (Bosch), headquartered in Stuttgart, Germany, covering shipments of foreign-produced items to Huawei Technologies Co. (Huawei), or its affiliates.
Between September 16, 2020 and September 26, 2024, Bosch through its German subsidiaries, committed 109 violations of the EAR when they sold, transferred, and/or exported abroad approximately $72,369,361 worth of Micro-Electro-Mechanical Systems (“MEMS”) sensor products and automotive software, items subject to the Export Administration Regulations (the EAR) pursuant to the Foreign Direct Product Rule (“FDP Rule”), to Huawei and its affiliates on the Entity List without the required license or other authorization from BIS. The MEMS sensors at issue have a broad range of consumer applications, including in smartphones, wearable technology, and automobiles.
Key points from the Charging Letter:
- Bosch produced MEMS in Germany using non-U.S. equipment that were the direct product of U.S. origin “technology” or “software” specified in an ECCN identified in the FDP Rule. Additionally, Bosch used microcontrollers produced by a non-U.S. company in the testing of the hardware-dependent Bosch produced software for automotive Electronic Control Units (“ECUs”). The microcontrollers were the direct product of U.S.-origin “software” or “technology” specified in an ECCN identified the FDP Rule and were a major component of a plant that produced the Bosch software.
- Bosch had “knowledge” that Huawei was an “end-user” and, therefore, a party to the transactions involving the MEMS and the ECU software, Bosch was prohibited from exporting from abroad to Huawei the MEMS and ECU software produced using equipment and microcontrollers subject to the FDP rule without a BIS license.
- In general, Bosch had established compliance processes and procedures regarding export compliance, including U.S. export compliance. However, Bosch’s U.S. export compliance team did not have sufficient expertise or resources at the time to adequately address the August 2020 changes to the EAR, namely, the FDP Rule that expanded the restrictions for Huawei.
- In one instance, the trade compliance employee in Germany erroneously commingled the concept of the De Minimis Rule, which depends on a certain amount of incorporated U.S. origin content that is controlled for a destination, and the concept of the FDP Rule, which depends on the software, technology, and equipment used to produce an item rather than incorporated content.
- Bosch overlooked indications from equipment suppliers warning Bosch of the impact of the FDP Rule and products produced using equipment subject to the EAR’s FDP Rule.
Bosch filed a Voluntary Self-Disclosure and cooperated with the investigation.
Bosch agreed to pay a penalty of $36,184,680. Bosch also agreed with the Department of Justice to disgorge profits, partially suspended, with actual payment of approximately $3.6 million. BIS is suspending approximately $3.6 million of its penalty as credit for the disgorgement.
Assistant Secretary of Commerce for Export Enforcement David Peters stated: “Bosch had several opportunities to avoid these violations had they exercised the increased vigilance BIS has repeatedly said it expects of companies whose transactions are governed by the EAR. Today’s action should serve as a warning to embrace compliance and as an example of the benefits of voluntary self-disclosure.”
https://www.bis.gov/media/documents/robert-bosch-gmbh-final-order-6-16-2026.pdf
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National Security Division Announces First Declination Under the Department-wide Corporate Enforcement Policy
June 17, 2026: The Justice Department announced that it has declined the prosecution of Robert Bosch GmbH (Bosch), thereby resolving its investigation into an alleged scheme to send products and software manufactured with equipment that was the direct product of U.S. software or technology to an Entity-listed company in the People’s Republic of China (PRC). This decision was reached pursuant to Part I of the Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP), after also considering the factors set forth in the Department’s Principles of Federal Prosecution of Business Organizations. Bosch promptly disclosed the misconduct to the National Security Division (NSD), fully cooperated, and timely and appropriately remediated — which qualified them for a declination under the CEP, given that aggravating circumstances were absent Bosch has agreed to disgorge the $11,430,098 in profits it made as a result of the transactions at issue — a portion of which will be credited towards the $36,184,680 fine paid in a parallel civil action by the Department of Commerce.
As announced by NSD on March 30, enforcing export control and sanctions laws is a top priority and furthers NSD’s mission to protect and defend the United States against the full range of national security threats. Moreover, the Justice Manual (JM) assigns violations of the U.S. government’s primary export control and sanctions regimes, among other criminal laws affecting, involving or relating to the national security, to NSD. JM 9-90.020. This is the first time that NSD has declined the prosecution of a company under the CEP.
“This declination reflects the clear benefits for companies that promptly disclose potential violations and fully assist in our investigations,” said Assistant Attorney General for National Security John A. Eisenberg. “Bosch’s cooperation and timely remediation met the high standards set by the Corporate Enforcement Policy, supporting a fair and efficient resolution. This first-of-its-kind decision by NSD highlights the important role of transparency in safeguarding U.S. technology and national security.”
“This settlement agreement underscores BIS’s commitment to strong enforcement as well as incentivizing voluntary disclosures of past violations,” said Assistant Secretary of Commerce for Export Enforcement David Peters.
Between September 2020 to September 2024, Bosch, through two of its non-U.S. based subsidiaries, exported over $70 million worth of foreign-produced Micro-Electro-Mechanical Systems sensor products and foreign-produced software to Huawei Technologies Co., Ltd. and its affiliates on the Entity List, including Huawei Tech. Investment Co. Ltd. Hong Kong (collectively, Huawei) without the required license or authorization from the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) in violation of the Export Administration Regulations (EAR), 15 C.F.R. Parts 730-744. The two implicated subsidiaries are Bosch Sensortec GmbH (BST) and ETAS GmbH (ETAS). In particular, BST and ETAS provided to Huawei foreign-produced items that were subject to the EAR pursuant to the Entity List Foreign Direct Product Rule (FDPR) for entities designated with “Footnote 1.” The investigation further revealed that Bosch’s trade compliance personnel were ill-equipped to provide accurate guidance on the FDPR, which led to several years of FDPR violations. In addition, the investigation identified ongoing sales in violation of the FDPR despite several missed opportunities where third-party companies identified potential applications of the FDPR to their products or equipment used in the provision of their services. As a result, Bosch made approximately $11,430,098 in pre-tax profits.
Bosch voluntarily self-disclosed the misconduct to NSD. Bosch cooperated with NSD’s investigation, including by preserving and proactively disclosing relevant facts, information, and documents about the conduct and promptly responding to NSD’s subsequent requests. Bosch also timely and appropriately remediated the misconduct by making organizational changes, imposing disciplinary action, adding employees to its trade compliance organization, expanding its U.S. trade compliance resources, and updating its internal policies and procedures. Given all of the above and the lack of aggravating circumstances, the Department is declining to prosecute Bosch, and Bosch has agreed to a disgorgement of the $11,430,098 in profits.
Trial Attorney Maria Fedor of the National Security Division’s Counterintelligence and Export Control Section prosecuted the case with investigative assistance provided by the Department of Commerce, Bureau of Industry and Security.
https://www.justice.gov/d9/2026-06/bosch_-_executed_declination.pdf
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MAAG Gala, Inc. Agree to Pay $67,000 For Eighteen Violations of the Antiboycott Regulations.
June 18, 2026: The Office of Antiboycott Compliance (“OAC”), Bureau of Industry and Security (“BIS”) announced a settlement with MAAG Gala, Inc. (“MAAG”) in which MAAG agreed to pay $67,000 for eighteen violations of the antiboycott regulations described in Part 760 of the Export Administration Regulations (“EAR”).
MAAG voluntarily disclosed to the OAC that it had committed eighteen violations of the § 760.5 of the EAR when it failed to report the receipt of a request to engage in a restrictive trade practice or boycott.
Between 2021 – 2024, MAAG received the requests in the terms and conditions for 18 Purchase Orders (“PO”) for spare parts from one customer located in Qatar. Each PO included the language “Israeli origin goods are not permitted to import into Qatar” or “Follow Qatar import regulations on restricted, banned, and boycotted origin goods.”
https://www.bis.gov/media/documents/a780-maag-gala-inc.pdf
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Eastern District of New York | Manager of U.S. Freight Forwarding Company Sentenced to 18 Months in Prison for Circumventing Export Controls | United States Department of Justice
June 24, 2026: The U.S. Attorney’s Office of Eastern New York, announced Natalya Ivanovna Mazulina, also known as “Natasha Mazulina,” a resident of Federal Way, Washington, was sentenced to 18 months in prison for crafting a scheme to circumvent U.S. export laws related to Russia. Mazulina was the Western Regional Manager of Delex Air Cargo LLC, a freight forwarding company based in Jamaica, New York, which operated out of John F. Kennedy International Airport and Seattle-Tacoma International Airport. Mazulina was arrested in December 2024 and, in October 2025, pled guilty to conspiracy to violate the Export Control Reform Act. As part of her sentence, Mazulina was ordered to forfeit $77,000 in criminal proceeds.
“The Russian oil and gas industry is the lifeblood that fuels the Russian war machine,” stated United States Attorney Nocella. “This defendant put her own profits above the national security of the United States by conspiring to illegally export industrial oil and gas equipment to Russia. Our Office will continue to use all our law enforcement tools to investigate and prosecute those who evade export control laws.”
From at least December 2022 through December 2024, Mazulina conspired with Russian freight forwarding companies and others to unlawfully ship controlled items, including industrial oil and gas equipment, from the United States to Russia, through intermediary countries. At one point, in June 2023, Mazulina told colleagues that her clients were paying through bank accounts in third party countries because “[m]ost of [her] clients [were] currently sanctioned with USA.” Mazulina attempted to conceal the unlawful scheme by submitting and causing the submission of false export documents to the U.S. government, which omitted the information that the goods were destined for Russia.
“This case shows that BIS will work with our law enforcement partners to aggressively pursue all those who violate our export control laws,” stated Special Agent in Charge Guanci.
Sanctions
Department of the Treasury, Office of Foreign Assets Control (OFAC)
The following is a summary of OFAC actions for June 1 through June 30, 2026.
- Publication of Introduction to OFAC Guide
https://ofac.treasury.gov/recent-actions/20260601
https://ofac.treasury.gov/media/935656/download?inline
- Counter Terrorism and Iran-related Designations; Democratic Republic of the Congo-related Designations; Issuance of Iran-related Frequently Asked Question
https://ofac.treasury.gov/recent-actions/20260602
- Cuba Designations; Issuance of Cuba-related Frequently Asked Question
https://ofac.treasury.gov/recent-actions/20260604
- Iran-related Designations; Counter Terrorism Designations Updates
https://ofac.treasury.gov/recent-actions/20260605
- Non-Proliferation Designations; Iran-related Designations; Issuance of Venezuela-related Amended General Licenses and Frequently Asked Questions
https://ofac.treasury.gov/recent-actions/20260610
- Cuba Designation; Russia-related Designations Removals and Designation Update; Issuance of Amended Russia-related General Licenses and Frequently Asked Questions
https://ofac.treasury.gov/recent-actions/20260611
- Issuance of Venezuela-related General Licenses and Amended Frequently Asked Question
https://ofac.treasury.gov/recent-actions/20260618_33
- Counter Terrorism Designations
https://ofac.treasury.gov/recent-actions/20260618
- Issuance of Iran-related General License
https://ofac.treasury.gov/recent-actions/20260622_33 - Counter Terrorism Designations
https://ofac.treasury.gov/recent-actions/20260622 - Transnational Criminal Organizations Designations; Cuba Designations; Russia-related Designations Removals; Issuance of TCO-related General License; https://ofac.treasury.gov/recent-actions/20260623
https://home.treasury.gov/news/press-releases/sb0538
https://ofac.treasury.gov/media/936216/download?inline
- Publication of OFAC-OFSI Comparative Overview
https://home.treasury.gov/news/featured-stories/achieving-our-objectives-supporting-our-stakeholders-ofac-ofsi-enhanced-partnership-exchange-2026 https://ofac.treasury.gov/media/936221/download?inline
- Democratic Republic of the Congo-related Designations; Issuance of Amended Russia-related General License and Frequently Asked Questions
https://ofac.treasury.gov/recent-actions/20260625 - Issuance of Venezuela-related General License
https://ofac.treasury.gov/recent-actions/20260625_33
- Sudan-related Designations
https://ofac.treasury.gov/recent-actions/20260626
- Launch of OFAC Reconsideration Portal
https://ofac.treasury.gov/recent-actions/20260629_33
- Counter Narcotics Designations; Russia-related Designations Removals; Publication of Report for Licensing Activities Undertaken Pursuant to the Trade Sanctions Reform and Export Enhancement Act (TSRA)