Kristen Salas Mationg
Loyola University Chicago School of Law, JD 2024
On February 16, 2023, the Department of Justice (DoJ) and the Department of Commerce (DoC) announced the launch of the Disruptive Technology Strike Force. Under the leadership of Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division and Matthew Axelrod, the Assistant Secretary for Export Enforcement in the Commerce Department’s Bureau of Industry and Security (BIS), the strike force will bring together various agencies throughout the government, including the FBI, Homeland Security Investigations (HSI) and 14 U.S. Attorneys’ Offices, to “target illicit actors, strengthen supply chains and protect critical technological assets from being acquired or used by nation-state adversaries”.
The goal of the Disruptive Technology Strike Force
The release accompanying the DoJ and DoC’s statement specifically mentioned that the United States faces national security threats from certain nation-states, such as the People’s Republic of China, Iran, Russia, and North Korea. In particular, the United States hopes to prevent hostile foreign intelligence from acquiring classified advanced technologies that could be used to enhance their militaries or support mass surveillance programs.
As part of its national security policy, the United States imposes export controls over certain commodities, software, and technology to prevent the proliferation of weapons of mass destruction and prevent destabilizing accumulations of conventional weapons and related material. Federal export control laws restrict the export of these items in order to protect national security interests, protect the domestic economy, and promote foreign policy objectives.
The creation of the Disruptive Technology Strike Force demonstrates the United States’ ongoing commitment to using export control policy and enforcement to advance national security priorities. The strike force further builds upon the BIS’s October rule that significantly tightened export controls targeting China with respect to U.S. and foreign businesses operating in the semiconductor and advanced computing industry. The Disruptive Technology Strike Force, combined with BIS’s export control rule, highlights that export controls continue to function as an important national security and foreign policy tool for the United States. It is likely that the DoJ and DoC will work to monitor and enforce export controls in various areas, including preventing Russian and Chinese spying, protecting sensitive technologies, and guarding against enemy-use of such technologies.
The Strike Force’s enforcement tools
Currently, violations of the Export Administration Regulations, codified in 15 C.F.R. Parts 730-774 (EAR), may be subject to both criminal and administrative penalties. Criminal penalties can include up to 20 years of imprisonment and up to $1 million in fines per violation, or both. Administrative monetary penalties can reach up to $300,000 per violation or twice the value of the transaction, whichever is greater.
In an export enforcement memorandum released on June 30, 2022, Assistant Secretary for Export Enforcement Matthew Axelrod of BIS emphasized that the agency intended to bring more cases and impose higher penalties for criminal violations of export laws. Because the strike force will operate with support from several local U.S. Attorneys’ Offices throughout the entire country, the number of cases referred for criminal prosecution will likely see a noticeable increase. Similarly, administrative export enforcement cases, where violations may be found on a strict liability basis, might experience an increase as well. Further, regulatory and enforcement agencies are likely to tighten export controls and be more aggressive in the investigation and enforcement of U.S. export and anti-boycott regulations, particularly those that pose a national security risk. Companies in advanced fields, such as artificial intelligence, advanced manufacturing, or biosciences, must ensure compliance with United States export control policy or may risk violations coupled with increased fines.
The DOJ and BIS have already taken steps to tighten export controls. Shortly after the creation of the Strike Force, the agencies announced an action against a Russian company and an individual related to the unauthorized export of controlled counterintelligence items to Russia and North Korea. BIS issued a Temporary Denial Order (TDO) suspending the export privileges of the Russian company, further demonstrating the agency’s trend toward increased export control penalties.
The creation of the Disruptive Technology Strike Force and the agencies’ recent actions prove that the DoJ and the DoC are particularly committed to the enforcement of export controls, particularly in cases that may affect the U.S. and its citizens. By bringing together the nation’s top experts and utilizing various enforcement tools, the strike force can attack potential national security threats by preventing adversaries from acquiring advanced technology that would allow them to gain strategic dominance.