BIS Wish List Includes More Agents Overseas, Better Analytical Tools, Official Says

The Bureau of Industry and Security could use more export enforcement agents abroad and better analytical tools to track illegal shipments, said Matthew Axelrod, the agency’s top export enforcement official. He also said companies should expect BIS to continue to issue large corporate enforcement penalties for export control violations.

Axelrod, speaking during a Sept. 12 event hosted by the Center for Strategic and International Studies, said BIS has about 11 officers overseas, but “we definitely don't have as many people as we [would] like.” Because the agency is stretched thin, it sometimes sends its U.S.-based agents on end-use check “trips” to areas of the world where there is no BIS officer, he said.

He specifically noted that BIS doesn’t have an officer in South America, but it sometimes flies agents to the region, including to Brazil. “That's something I'd like to remedy when we have the budget to do it,” Axelrod said.

BIS officials have made several requests to lawmakers for more funding in recent months, but Congress has so far denied budget increases for the agency (see 2403040061).

Asked whether BIS enforcement agents also need better data analytics tools, Axelrod said the agency has “some, but we are working on more.”

“The trick is funding,” he said, adding that those tools are expensive. “If we don't get funding to bring on more people -- which we also need funding for -- analytic tools that allow the people we do have to be more efficient” can “save them time each day in how they crunch the data and illuminate things going where they shouldn't.”

Axelrod said BIS has proven that it uses its existing funding well. He pointed to the increasing penalty sizes BIS has issued in recent years, including the largest stand-alone administrative penalty in its history in 2023 -- a $300 million fine against California-based Seagate Technology for violating U.S. export controls against Huawei (see 2304190071). He said the money from those fines goes to the DOJ forfeiture fund or to the Treasury Department general fund.

“We are a pretty good return on investment,” he said. “When Congress invests in us and gives us resources, we are able to bring back more into the federal treasury than we cost.”

Along with the Seagate fine, BIS has announced multiple penalties over the last year for alleged export control violations, including a $5.8 million fine of a Pennsylvania electronics business in August after the company admitted to illegally shipping controlled technology to China (see 2408150050). The agency has also published an increasing number of penalties for antiboycott violations, penalizing at least three companies so far this year (see 2408260038).

“I think you're going to see more significant corporate resolutions from us,” Axelrod said, echoing comments he made in February as part of an event hosted by the government’s Disruptive Technology Strike Force (see 2402090042).

“We can tell people you have to invest in compliance on the front end,” he said, “but the thing that often moves the needle is when there is a large penalty for someone who failed to do that and there were significant consequences.”

Axelrod said he’s specifically focused on educating smaller companies about export compliance, adding that they are sometimes more at risk for violations than larger firms because they may not have as many compliance resources or as much experience.

“It's the smaller companies that I often worry about, because they don't have the trade compliance department,” he said. “They’re running a million miles a minute, and this may not be top of their to do list. So it’s something we're concerned about. It's one of the reasons I like doing events like this, to try and get the word out as broadly as possible.”

Axelrod also said U.S. universities are paying more attention to export compliance, and pointed to multiple recent enforcement actions against schools, including a June settlement agreement with Indiana University after it voluntarily disclosed illegal exports of genetically modified fruit flies carrying a controlled toxin (see 2406250022). The Georgia Institute of Technology also announced earlier this month that it was severing ties with China-based Tianjin University, a school added to the Bureau of Industry and Security’s Entity List in 2020 (see 2409090016).

“I think the universities are increasingly attuned to this issue,” Axelrod said. “I think the word is out.”