Better Late Than Never: DOJ’s National Security Division Resolves First “Near Miss” Self-Disclosure Under Department-wide Corporate Enforcement Policy
On October 27, 2026, the U.S. Department of Justice (DOJ) announced that its National Security Division (NSD) entered into a non-prosecution agreement (NPA) with Extreme Networks, Inc. to resolve sanctions and export control violations involving sales to a Russian weapons manufacturer. The resolution marks the first “near miss” NPA under DOJ’s Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP) and the first resolution announced by NSD under the policy.
Although Extreme Networks voluntarily disclosed the misconduct, DOJ determined that the disclosure was untimely because it occurred only when a news publication was poised to report on the violations. Nevertheless, DOJ credited the company’s cooperation and remediation, agreeing to an NPA requiring approximately $488,000 in forfeiture and an equivalent criminal fine. The company also reached a parallel settlement of approximately $1.5 million with the Treasury Department’s Office of Foreign Assets Control (OFAC) for the same conduct.
The resolution underscores DOJ’s strict approach to the CEP’s timeliness requirement while demonstrating that companies may still receive substantial credit for good-faith disclosures that fall short of the policy’s requirements. It also confirms that the CEP applies to sanctions and export control matters and suggests that a national security nexus does not, by itself, preclude favorable treatment. Click here to read the full post.
OFAC’s Pegasus Settlement: Lessons for Logistics Providers on Screening and Subpoena Responses
On October 9, 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $175,015 settlement with California-based freight forwarder Pegasus Worldwide Logistics (Pegasus) for apparent violations of U.S. counter-narcotics sanctions and OFAC reporting requirements. The enforcement action arose from Pegasus’s involvement in shipping a $5,950 machine supplied by a sanctioned Chinese company that had changed its name following its designation. Despite the relatively modest transaction value, OFAC imposed a substantial penalty, citing deficiencies in Pegasus’s sanctions screening, failure to investigate red flags, and incomplete response to an administrative subpoena.
OFAC found that Pegasus failed to conduct sanctions screening at the outset of the transaction and subsequently screened only the supplier’s new name, overlooking email and telephone information that would have identified the company as a sanctioned party. Pegasus also continued processing payments after receiving a U.S. Customs and Border Protection detention notice referencing OFAC. Compounding these failures, Pegasus initially certified that it had no documents responsive to an OFAC subpoena, only to produce responsive records months later. OFAC treated the incomplete response as a separate basis for liability and an aggravating factor in calculating the settlement.
The action underscores OFAC’s heightened compliance expectations for logistics companies and other intermediaries, regardless of their size or the value of the underlying transaction. It also highlights the importance of screening all available identifying information before engaging in transactions, promptly escalating sanctions-related red flags, and ensuring complete and accurate responses to government inquiries. OFAC further emphasized the availability of financial incentives for sanctions whistleblowers, reinforcing the importance of effective internal reporting and escalation procedures. Click here for the full post.
DOJ Expands Trade Fraud Enforcement After $1 Billion Milestone
The U.S. Department of Justice and the Department of Homeland Security announced on July 14, 2026, that the Trade Fraud Task Force had surpassed $1 billion in criminal and civil recoveries, penalties, forfeitures, and publicly charged losses less than one year after its launch. The announcement confirms a fundamental shift in the federal government’s approach to customs and trade enforcement, reflecting increased emphasis on rigorous criminal prosecution and civil enforcement under the False Claims Act.
China’s New Supply Chain Security Regulations: Key Takeaways for Companies With China Operations or China-Linked Supply Chains
China’s new Regulations on Industrial and Supply Chain Security, which took effect on April 7, 2026, add another significant layer to the country’s expanding countermeasures framework. The regulations give Chinese authorities broad powers to monitor activities that could be viewed as threatening China’s industrial or supply chain security, creating new compliance challenges for companies with China operations or China-linked supply chains.
From increased scrutiny of key sectors and supply chain due diligence to heightened risks around supplier transitions, customer terminations, and sanctions-driven business decisions, the regulations underscore a growing reality: actions taken to comply with foreign trade restrictions may carry legal consequences in China.
In this blog post, we examine the regulations’ key provisions, identify four principal risk areas for multinational companies, and discuss practical steps companies should consider as conflict-of-laws risks become increasingly difficult to avoid.
