Typically, I enjoy the New Year (notwithstanding Larry David’s rule of no New Year wishes past 15 days of the New Year). It is important to look back, assess and identify trends; after all, what better marker than annual reviews.
The most significant compliance and enforcement issue remains trade enforcement — sanctions and export controls. In the second posting, I want to focus on the new and interesting development in this area: the use of the False Claims Act to capture violations of tariffs and customs duties.
With all the hype on the trade compliance front, when you calculate the numbers relating to criminal enforcement, 2025 was a slower year than 2024. That is understandable since there is always a hiccup or delay when a new Administration takes power.
From the administrative standpoint, however, OFAC and Commerce’s Bureau of industry and Security (“BIS”) posted increased in 2025 over 2024. For OFAC, 2024 was a relatively slow year, and 2025 showed an uptick in numbers of cases. Notwithstanding these increases, OFAC brought big cases involving Russian oligarchs.
For the year, OFAC brought 14 cases and recovered over $265 million in penalties. What was missing, however, was OFAC’s steady enforcement against a variety of industries — the spread of OFAC cases was fairly limited.
From the numbers, for 2025, DOJ indicted, took guilty pleas or participated in sentencing proceedings in a total of forty-one (41) cases. For 26 of these cases, the illegal exports were intended to customers in Russia (16) and China (10); after that, Iran was involved in 5 cases, and Haiti was involved in 4, and Venezuela and North Korea had only 2 cases respectively.
The most significant case this year was undeniably the DOJ-led resolution with Cadence Design Systems. This case was significant because it followed the DOJ model for FCPA and other large cases — DOJ coordinated a resolution involving a criminal guilty plea and regulatory resolutions with OFCA, BIS and the Customers and Border Protection Department. In the end, Cadence coughed up $140 million and had to enter a guilty plea.
The second most important case involved White Deer’s acquisition of Unicat, under which Unicat earned a non-prosecution agreement and paid a $3.3 million forfeiture. White Deer’s CEO discovered Unicat’s ongoing violation of Iran sanctions while visiting Unicat’s offices shortly after the closing. White Deer assisted DOJ in the criminal prosecution of Unicat’s CEO, who was the ringleader of the illegal scheme.
White Deer’s prompt voluntary disclosure earned substantial credit under DOJ’s merger and acquisition cooperation policy. White Deer was an important reminder on the importance of acquiring companies conducting post-closing audits and promptly disclosing any violations.
There is no question that next year we will see more of these enforcement actions. Where DOJ enforcement coincides with national security concerns, such as sanctions and export controls (and ITAR), DOJ has been unleashed, resources have been assigned, and aggressive enforcement is the mantra.
DOJ has the resources and has designated this as a priority. Companies involved in international trade should invest in and re-examine their trade compliance programs as you guessed it, sorry LD, A New Year’s Resolution.
