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Kathryn Cameron Atkinson, Larry Christensen and Barbara Linney were quoted regarding export controls and sanctions work in Washington, DC, which has the largest concentration of export controls and sanctions lawyers in the world. Lawyers in Washington are at the heart of the action. "The nearly daily policy and regulatory interpretation developments on the Ukraine/Russia front require close contacts with OFAC, BIS and DDTC, and that is typical of every new regulatory response to an international hot spot," Christensen said.
Practitioners agree that there has been a trend for export controls and sanctions practices to overlap with many other practice areas within firms, particularly within the category of trade security -- anti-corruption (FCPA), foreign investment review (CFIUS) and anti-money laundering (AML). "There are several reasons for the trend, but the effect of 9/11 is probably most important," Atkinson said. "9/11 highlighted the need for coordinated enforcement, because it laid bare the connections between and among these regimes. Corruption funds other international crimes." Atkinson added that companies "recognize that a risk in one area can breed risk in another. Thus, lawyers need to be able to help companies identify and manage these risks. To do so efficiently, it's best to consider them together rather than piecemeal."
The Export Control Reform initiative has had a substantial impact on trade controls over the past year. Among many challenges, Linney said that the struggle to come to terms with the new regime is not felt only at home. "These folks are facing a very steep learning curve. This is particularly true for non-U.S. clients who deal in formerly ITAR-controlled goods that now are subject to the EAR," she added.
Sanctions policies, created in Washington, also pose compliance challenges. "Perhaps the single most frustrating compliance challenge that clients are encountering in the sanctions arena is the lack of clear guidance on the standard of care expected of companies when attempting to determine whether a party is owned or controlled by a blocked person or SDN (under the U.S. rules) or a designated person under asset freezing programmes of other countries," she said. "Is a rumour or an unsubstantiated (or even denied) allegation enough to create an unacceptable risk of violation?"