While the issuance of subpoenas is common in nearly all Governmental investigations, the breadth and scope of those recently issued by the U.S. Department of Commerce, Bureau of Industry and Security ("BIS"), for purported U.S. national security and foreign policy objectives, are unlike those seen in the recent past. In this current environment of heightened focus on U.S. sanctions and security, BIS has reportedly issued extremely broad "national security-related" subpoenas to U.S. exporters, which have large U.S. companies scratching their heads.
BIS subpoenas, whether administrative or criminal, typically reflect a relatively targeted effort by the U.S. Government to understand a company's export and/or reexport activities involving U.S.-origin commodities or technology controlled under the Export Administration Regulations (the "EAR"), 15 C.F.R. Part 730 et. seq., which are destined for certain restricted countries or end-users. For example, BIS' recent subpoena to telecommunications giant, Huawei Technologies Co. Ltd., which has been widely covered, is reported to have requested information regarding the export or reexport of U.S. technology to Cuba, Iran, North Korea, Sudan and Syria; all countries against which the United States maintains strict restrictions on exports.
In contrast, these national security subpoenas reportedly request a breadth of export or reexport records, involving a variety of countries, many of which do not normally raise a red flag and to which most exports would not normally require a license from BIS or other U.S. Government agencies, e.g., various E.U. countries. We understand these subpoenas request documents dating back five years, consistent with the statute of limitations for violations of the EAR.
What should you do if your company receives a U.S. Government subpoena from BIS (or another federal agency)?
Take it Seriously. Regardless of the nature of the subpoena – administrative or criminal – responding to a federal agency subpoena is required by law. And, if the subpoena is administrative, failing to respond to the subpoena may result in a criminal probe by the U.S. Government, which may have otherwise been avoided. Take careful note of any deadlines included in the subpoena.
Preserve all Evidence in Whatever Form. It is common for your company's general counsel office or compliance team to promptly issue a "litigation hold" notice to all personnel for all records that are potentially relevant to the inquiry. Do not destroy electronic or hard copy documents or other evidence, and to the extent possible, prevent any "auto deletions" in order to save responsive records that may otherwise be destroyed. Failure to save records or prevent their destruction may also lead to further problems.
Seek Experienced Legal Guidance. With respect to federal agency subpoenas, such as from BIS, it is important to seek out legal counsel that not only understands the potential pitfalls and processes related to responding to such a subpoena, but more importantly, also the substantive area which it covers. For example, a subpoena involving U.S. economic sanctions or U.S. export controls may be broad but targeted in specific ways that need to be understood in order to ensure your company is responsive but careful in its production of materials. Even broad-based requests, such as the "national security" transactional subpoenas discussed here, should be reviewed and responded to accurately and strategically. It is also important to work through counsel to assess whether your company is a subject, witness, or target of any such investigation.
Develop and Implement a Review and Production Plan. Assess the nature and extent of the requests and work with legal counsel to develop a plan forward. Working under the direction and control of counsel is essential in order to keep your company, as well as individuals within your company (depending on the facts), under the protections afforded by attorney-client privilege and work-product doctrines. As responsive materials are uncovered, coordinating with your attorney ensures such protections.