Insights

Denver – June 30, 2025: Scott Wise, most recently assistant general counsel for global trade at Microsoft, has joined Crowell & Moring as a partner in the firm’s International Trade Group.

Earlier this month, the Department of Justice (DOJ) announced that Swiss Automation Inc., an Illinois-based precision machining company, agreed to pay $421,234 to resolve allegations that it violated the False Claims Act (FCA) by inadequately protecting technical drawings for parts delivered to Department of Defense (DoD) prime contractors.  This settlement reflects DOJ's persistent emphasis on cybersecurity compliance across all levels of the defense industrial base, reaching beyond prime contractors to encompass subcontractors and smaller suppliers.  The settlement is also a reminder to all contractors not to overlook the often confusing relationship between Controlled Unclassified Information (CUI) and export-controlled information.

On September 29, 2025, the U.S. Department of Commerce Bureau of Industry and Security (BIS) announced a sweeping Interim Final Rule (IFR), (the “Affiliates Rule”) expanding which entities qualify as Entity List or Military End-User entities, thereby subjecting those entities to elevated export control restrictions under the Export Administration Regulations (EAR). U.S. export restrictions applicable to entities on the Entity List, Military End-User (MEU) List, and Specially Designated Nationals and Blocked Persons (SDN List) now apply to foreign affiliates that are, in the aggregate, owned 50% or more by one or more of the aforementioned entities. An entity that becomes subject to these restrictions because of its ownership structure will be subject to the most restrictive controls that attach to any of its parent entities, regardless of ownership stakes.

U.S. Government and private sector sources continue to report efforts by Democratic People’s Republic of Korea (DPRK) nationals to infiltrate companies around the world by posing as information technology (IT) professionals, in order to get hired by U.S. and other businesses and gain access to sensitive company systems. Crowdstrike, a U.S. cybersecurity company, has reported a 220% increase in the number of companies infiltrated by North Korean threat actors over the last 12 months. In particular, a DPRK-affiliated group known as “Famous Chollima” has leveraged artificial intelligence and deepfake technology to generate synthetic identities, as well as resumes and CVs, draft communications, and conduct job interviews. Enforcement actions brought by the U.S. Department of Justice identify victims in the cryptocurrency sector, including decentralized finance (“DeFi”) projects. In addition, media reports indicate that North Korean hackers are purportedly offering fake job offers targeting employees in the cryptocurrency sector, with the goal of stealing crypto.