Trade lawyers are expecting a sharp increase in DOJ export control and sanctions prosecutions in the coming months as the agency’s Counterintelligence and Export Control Section undergoes a hiring spree, and several law firms said the increased attention on sanctions violations may cause some companies to bolster their compliance programs.

The Office of Foreign Assets Control this week sanctioned three people in Bosnia and Herzegovina for “undermining stability and perpetuating corruption.” The designations target Osman Mehmedagic, director general of the country’s Intelligence Security Agency; Dragan Stankovic, director of the Republika Srpska Administration for Geodetic and Property Affairs; and Edin Gacanin, “one of the world’s most prolific drug traffickers.” The three “constitute a threat to regional stability, institutional trust, and the aspirations of those seeking democratic governance in the Western Balkans,” Brian Nelson, Treasury’s undersecretary for terrorism and financial intelligence, said March 15.

The Committee on Foreign Investment in the U.S. is placing a significant focus on investments that could present data or cybersecurity risks, said CFIUS head Paul Rosen and FBI official Cynthia Kaiser. Rosen also said CFIUS continues to actively pursue non-notified deals and said the administration is still discussing the idea of an outbound investment review regime.

Iranian national Mehdi Khoshghadam violated U.S. export controls by illegally shipping electrical cables and connectors from the U.S. through Hong Kong and to Iran, DOJ said March 9. Khoshghadam was charged with one count of conspiracy, one count of violating of the International Emergency Economic Powers Act and one count of conspiracy to commit money laundering. The indictment also seeks to forfeit all “proceeds” earned by ​​Khoshghadam from the illegal exports.

Based on 2022 U.S. sanctions enforcement trends, companies should make sure to scale their sanctions compliance programs along with their business expansions, continually conduct audits and make sure employees are properly trained on sanctions compliance, Morrison & Foerster said in a March 6 client alert. The alert explores some of the lessons companies can learn from the Treasury Department’s penalties last year, including that “insufficient oversight” during a merger process can lead to sanctions risks, and all companies -- large or small -- will be held to Treasury’s sanctions compliance standards.

The Office of Foreign Assets Control this week announced a host of new Iran-related sanctions, including new designations against a “shadow banking” network aiding Iranian entities and new sanctions against a network of Chinese companies with ties to the country's unmanned drone industry. The designations target 39 entities illegally allowing Iranian companies to access the international financial system and a network of five companies supporting Iran’s unmanned aerial vehicle procurement efforts.

The U.S. this week removed sanctions on a former Kazakhstan-based subsidiary of Russia’s Sberbank after the subsidiary changed ownership and asked the Treasury Department to delete the bank from its Specially Designated Nationals List. The subsidiary, now owned by the Kazakhstan government, is "one of the largest banks in Kazakhstan" and "systemically important to the Kazakhstani financial industry," a Treasury spokesperson said March 8, adding that the agency worked "closely" with the Kazakhstan government to help it complete the purchase.

The Office of Foreign Assets Control this week sanctioned eight Iranian officials and three Iranian entities for their ties to human rights abuses against women and girls. The designations target senior officials in Iran’s prison system, a top army commander, a high-ranking leader in the Islamic Revolutionary Guard Corps and others. Also sanctioned was Iranian security services supplier Naji Pas Co. and CEO Reza Asgharian; security services provider Naji Pars Amin Institute and CEO Bahram Abdollahinejad; and police equipment importer Entebagh Gostar Sepehr Co. and CEO Gholamreza Ramezanian Sani.

Law firm Quinn Emanuel will open an office in Beijing, its second office in mainland China. The new office will bolster the firm's China practice on matters including international arbitration and government agency investigations, among them DOJ, the Securities and Exchange Commission and the Office of Foreign Assets Control. Quinn Emanuel also helps large companies with "critical internal investigations and government enforcement actions involving their China operations," the firm said. Xiao Liu, Quinn Emanuel's China practice chair, will head the Beijing office.

Although many of the U.S. sanctions against Russia have been in place for months, companies are still dealing with a range of compliance challenges, Crowell & Moring trade lawyers said this week, especially involving Russia-related service restrictions. They also said they don’t expect the pace of sanctions to slow anytime soon, especially as the U.S. ramps up enforcement efforts this year.