Strengthening Export Controls Programs via Strategic Technology

Written by Howard Mendelsohn, President, Global Business Development and Engagement, Kharon  

Export controls are now central to national security strategy, and compliance programs must evolve accordingly. Strategic technology enables organizations to move beyond list-based screening and address the complexities of fast-evolving regulatory expectations.

Key priorities include: 

• Ownership Chain Visibility/BIS 50 Percent Rule: A potential BIS 50 Percent Rule would bring thousands of subsidiaries that operate globally into scope. Mapping multi-tiered, cross-border ownership is critical for identifying hidden exposure. 

• Addresses on the BIS Entity List: As of last year, BIS can designate addresses without naming a specific entity. This underscores the need for systems that detect address-level risk, especially when multiple entities operate at a single high-risk location. 
   

• Russian Evasion and HS Codes: Trade data and the use of other data and analytics continue to show risk of diversion to Russia of specified technologies and other items on the Common High Priority List. Guidance from the U.S. and other jurisdictions emphasizes the need to scrutinize transactions involving these codes more closely. Programs should incorporate intelligence on entities operating in flagged transshipment hubs. 

• Military End Use and End Users (MEU): The MEU regulation asserts broad authority over industry and requires exporters to conduct due diligence to determine whether an export of a controlled item in certain high-risk jurisdictions meets criteria to require licensing. The scope of this regulation may expand as proposed rules from July 2024 would impose broad new license requirements covering military-support, intelligence, and foreign-security end users. 

• Sensitive Technologies and Strategic Sectors: Controls targeting AI, semiconductors, and advanced computing reflect a broader shift in policy. Programs like the Outbound Investment Security Program (OISP) further signal that compliance and investment teams must work in tandem to manage exposure.

Integrating risk intelligence into workflows allows teams to proactively surface red flags, prioritize reviews, and adapt quickly as regulations evolve. Strategic use of technology enables export controls compliance programs to keep up, in line with national security driven heightened sensitivity.  Learn more about the work we’re doing on these topics and more at Kharon.com.

AAEI thanks Howard Mendelsohn, Westley Wedell, and Kharon for presenting on this topic at AAEI’s 104th Annual Conference & Trade Day.  Pre-Sale Registration is available for next year’s conference, for more information and to register at our lowest available rate, please visit https://bit.ly/4eLv81q.