The award winning, Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. Looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds! In this episode of Compliance into the Weeds, Tom Fox and Matt Kelly discuss the recent Bosch export controls enforcement action involving two German subsidiaries that sold about $72 million in advanced microsensors and software to Huawei from 2020 into late 2024
Their actions violating U.S. export controls tied to the Foreign Direct Product Rule and 2020 “footnote one” restrictions. Although Bosch voluntarily self-disclosed, cooperated, remediated, disgorged profits, and received a DOJ criminal Declination, BIS imposed a $36.1 million civil penalty, citing fundamental compliance failures: an understaffed and underqualified export controls function, confusion between the de minimis rule and the foreign direct product rule (which has no de minimis exception), and mishandling repeated external warnings from business partners and suppliers. They highlight internal control and communication breakdowns (including external signals) and the need to build specialized export/sanctions compliance capacity, noting BIS issued a compliance framework in 2020 and offers training.
Key Highlights
- Bosch case overview
- Understaffed compliance fallout
- Ignored partner warnings
- Declination and remediation
- COSO signals and controls
- Building export compliance muscle
Resources
Matt in Radical Compliance
Tom in the FCPA Compliance Blog; Part 1, Part 2 ,Part 3 Part 4. Part 5 posts Thursday June 52.
Tom