Export Enforcement Nominee Advocates for 'Significant Penalties,' Mum on Gun Control Transfer

The Bureau of Industry and Security should work to raise export enforcement awareness and prioritize deterrence through large penalties, said Matthew Axelrod, President Joe Biden’s nominee to oversee BIS enforcement work. Speaking during his nomination hearing last week, Axelrod highlighted BIS’s yearslong lack of Senate-confirmed leadership in the Office of Export Enforcement and said his background as a federal prosecutor makes him the right fit for the role.

“Export enforcement hasn't had a Senate-confirmed head in over five years, and it's been even longer than that that they've had a former federal prosecutor like me,” Axelrod, who would serve as the assistant secretary for export enforcement, told the Senate Banking Committee. He said his “established relationships” with federal law enforcement, developed over years with the Justice Department and as an industry lawyer, will allow BIS to “raise the profile of export enforcement, which in turn could help to increase deterrence and incentivize compliance.”

Axelrod said the Commerce Department’s export enforcement work has “become an increasingly pivotal component of our country's national security efforts,” and large penalties are important to stop U.S. adversaries from trying to illegally import sensitive U.S. technologies. He specifically pointed to dual-use goods that can be used for terrorism, weapons proliferation and human rights abuses.

“We must impose significant penalties against those who break the law, while at the same time incentivizing companies to play by the rules,” Axelrod said. “That way we're not only punishing export violators, but also deterring those violations from occurring in the first place.”

During his time as a white collar defense lawyer with Linklaters, Axelrod said he was constantly asked about U.S. enforcement. “No matter where I was in the world, people wanted to hear about United States enforcement mechanisms. It was our enforcement regimes they wanted to make sure they did not run afoul of,” he said. “That experience gave me an important perspective on how best to maximize the impact of our export enforcement work.”

Like Alan Estevez, Biden’s nominee to head BIS (see 2109210058), Axelrod declined to give an opinion about a Trump-era rule that transferred certain gun export controls from the State Department to Commerce (see 2104200027). While gun industry representatives said the transfer removed outdated regulations that placed onerous licensing burdens on firearm exporters (see 1908130066), gun-control advocates and some lawmakers have said the transfer loosened necessary controls over dangerous weapons (see 1904230049). Sen. Bob Menendez, D-N.J., last week was the sole committee member to oppose Estevez’s nomination (see 2110050029) because Estevez declined to take a stance on the issue.

Menendez also pressed Axelrod, asking him to commit to providing information to Congress on some of the weapons sales approved by BIS, which previously required a notification to Congress when they were controlled by the State Department. While Axelrod said it’s “important” for Congress “to get the information they need to fulfill their oversight responsibilities,” and said he will work with Menendez “to make sure you have the information necessary to do your job," he said he was mostly unfamiliar with the controls. “I don't know enough about the policy issue to have a view on it,” Axelrod said. “I don't have a view on where those authorities should lie.”

Menendez will submit further questions to Axelrod and wait for “detailed answers” before deciding whether to support his nomination, a Menendez spokesperson said.