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Mike and Brent revisit and synthesize in one episode everything trade compliance teams need to know about the “knowledge” standard under the US Export Administration Regulations (EAR). After starting the episode with Brent’s own journey in website design and announcing free resource materials (now) available at www.redflagsrising.com (01:05), Mike and Brent specifically discuss the full definition of “knowledge” under the EAR including its three-tiered definition of actual knowledge, reason to know, and an awareness of a high probability (08:36); the “collective knowledge doctrine” under US law (14:14); parallels to US Foreign Corrupt Practices Act (FCPA) enforcement (15:06); misperceptions regarding the Bureau of Industry & Security’s KYC Guidance (16:25); other common misunderstandings (18:11); where KYC screening programs go wrong (24:23); the limited application of the “legally distinct” rule under the Entity List catch-all (25:33); why we accepted self-certifications when national security was served by global integration (26:36); the suspended BIS Affiliates Rule and its core problems (30:43); entity-shifting (34:10); risks associated with distributors and resellers (35:10); and the potential restrictions on remote access (40:49). They then conclude with this episode’s installment of Brent Carlson’s “Managing Up” segment (46:22). Brent’s improved website and free resources: www.redflagsrising.com “Knowledge”: https://www.ecfr.gov/current/title-15/part-772/section-772.1#p-772.1(Knowledge) General Prohibition 10: https://www.ecfr.gov/current/title-15/part-736#p-736.2(b)(10) Brent Carlson, When Loopholes Create Liability Pitfalls (Aug. 25, 2023): https://wp.nyu.edu/compliance_enforcement/2023/08/25/29814/ Contact Brent: [email protected] More about Brent: www.redflagsrising.com/founder Connect with Brent on LinkedIn: https://www.linkedin.com/in/brent-carlson-41ba692/ Contact Mike: [email protected] More about Mike: https://www.morganlewis.com/bios/michaelhuneke Connect with Mike on LinkedIn: https://www.linkedin.com/in/mhuneke/

Mike and Brent dust-off a discussion recorded in May 2026, before the prior US-China trade summit, which is yet again timely with the next round of meetings coming up on September 24, 2026. They also discuss highlights from their May 2026 national security enforcement and compliance event in Washington, DC, at which Assistant Secretary for Enforcement David Peters spoke. Then they discuss how companies can best manage US export controls risks in the context of M&A pre- and post-acquisition due diligence. Specifically, Mike and Brent set the stage for the M&A discussion (01:49); preview what Sun Tzu’s Art of War means for the upcoming negotiations (03:50); provide a recap of their May 5, 2026, national security compliance and enforcement event in Washington, DC and the key takeaways from the event in terms of M&A and export controls (05:36); discuss Brent’s recent NYU Program on Corporate Compliance & Enforcement (PCCE) article and how Brent’s Fraud Four-Circle Framework (SM) can help with pre-acquisition due diligence based on some anecdotal evidence from his own experience (10:32); some anecdotes from Mike’s experience (14:43); how export controls now pose “central compliance risks” in terms of boards of directors’ duty of oversight under Delaware law (20:35); and how these ideas can help sellers, not just buyers (23:36); Mike and Brent then conclude with the latest installment of Brent’s “Managing Up” segment (24:41). Contact Brent: [email protected] More about Brent: www.redflagsrising.com/founder Connect with Brent on LinkedIn: https://www.linkedin.com/in/brent-carlson-41ba692/ Brent’s article referenced in the episode: Brent Carlson, “A Light Shines Through the Darkness in Disputes, Investigations, and Trade Compliance: A Fresh Look at the Classic Fraud Triangle with the Fraud Four-Circle Framework℠,” NYU PCCE (Jan. 8, 2026), https://wp.nyu.edu/compliance_enforcement/2026/01/08/a-light-shines-through-the-darkness-in-disputes-investigations-and-trade-compliance-a-fresh-look-at-the-classic-fraud-triangle-with-the-fraud-diamond-framework-sm/ Contact Mike: [email protected] More about Mike: https://www.morganlewis.com/bios/michaelhuneke Connect with Mike on LinkedIn: https://www.linkedin.com/in/mhuneke/

Mike and Brent invite Loyaan Egal on the podcast to discuss recent developments regarding the US Federal Communications Commission’s (FCC’s) “covered list” and its implications for trade compliance professionals. Specifically, Mike, Brent, and Loyaan discuss Loyaan’s prior government service in both DOJ and the FCC (01:05); the FCC’s authorities and role (05:29); the US national security concerns driving the US administration’s increasing recourse to the covered list (11:13); what potentially impacted importers should be doing to get ahead of rumored additions to the covered list (15:28); how the conditional approval process works for exception requests (19:22); what importers should expect next in terms of rulemaking (23:55); recent reports that optical transceivers might be soon added to the covered list, and the potential implications for data centers and for companies in the optical transceiver supply chain (26:03); how in the president’s second term the FCC is filling a role previously envisioned for the Commerce Department’s Bureau of Industry & Security’s Office of Information and Communications Technology and Services (OICTS), and speculation as to why that is happening (28:13); and what companies should be thinking about in terms of getting ahead of potential FCC enforcement actions (29:54). They then conclude with the latest installment of Brent’s “Managing Up” segment (36:31). More about Loyaan: https://www.morganlewis.com/bios/loyaanegal Connect with Loyaan on LinkedIn: https://www.linkedin.com/in/loyaan-egal/ Contact Loyaan: [email protected] Reuters Article: Alexandra Alper, “Trump administration drafting ban on Chinese data center devices, sources say” (Aug. 4, 2026): https://www.reuters.com/world/trump-administration-drafting-ban-chinese-data-center-devices-sources-say-2026-08-04/ More about Brent: https://www.redflagsrising.com/founder Connect with Brent on LinkedIn: https://www.linkedin.com/in/brent-carlson-41ba692/ Contact Brent: [email protected] More about Mike: https://www.morganlewis.com/bios/michaelhuneke Connect with Mike on LinkedIn: https://www.linkedin.com/in/mhuneke/ Contact Mike: [email protected]

Mike and Brent provide their day-of reactions to July 14, 2026, testimony by U.S. Department of Commerce Under Secretary for Industry & Security, Jeffrey Kessler, before the Foreign Affairs Committee of the U.S. House of Representatives. Although much of the coverage of the hearing and the Under Secretary’s remarks has focused on the Members of Congress questioning why more rules and Entity List additions haven’t been forthcoming, Mike and Brent highlight the Under Secretary’s own emphasis on more enforcement—not more rulemaking or entity-listing—as being the key metric for U.S. national security. Mike and Brent discuss their main takeaways from the Under Secretary’s testimony (02:00); the increase in monetary penalties imposed by the Bureau of Industry & Security (“BIS”) from 2024 to 2025 and during the first half of 2026 (07:28); what BIS is requesting for FY2027 and what they will do with it, including adding 370 new Office of Export Enforcement Agents (09:43); how the Under Secretary responded to criticism, including his remark that “I do not think that more regulation equates to more national security” (12:12); why misperceived loopholes will continue to lead to liability pitfalls (13:19); the return of U.S. congressional focus on battlefield recoveries (13:56); the Under Secretary’s invitation for Congress to judge his and BIS’s success based on enforcement (16:52); how and why the “high probability” standard is an opportunity for compliance teams in these circumstances to do more with less or on tight budgets (19:40); how taking a fresh look at the meaning of “red flags,” “possibility,” and “probability” can all help take advantage of such opportunities (28:03); and the confirmed death of the AI Diffusion Rule (32:42). Mike and Brent then conclude with this episode’s “Managing Up” segment (36:24). Under Secretary Kessler’s prepared remarks, hearing video link, and other materials: https://foreignaffairs.house.gov/committee-activity/hearings/fy27-bis-budget-the-ai-arms-race-and-the-icts-office Eleanor Olcott, “Nvidia’s Banned AI Chips Double in Price on China’s Black Market,” Financial Times (Jun. 23, 2026) (subscription required): https://www.ft.com/content/57fcd3ce-464f-4dc2-8ea2-5712d4972c69?syn-25a6b1a6=1 Red Flags Rising Episode 22, “All-In on America's AI Action Plan”: https://rss.com/podcasts/red-flags-rising/2140126 Red Flags Rising Episode 39, “Pull, Push, Tap, Aim, Fire - What Recent Settlements and Indictments Teach about Clearing Compliance Jams”: https://rss.com/podcasts/red-flags-rising/2778961 UAE LinkedIn post: https://www.linkedin.com/posts/mhuneke_enhanced-uae-treatment-under-us-export-controls-activity-7481377138542006274-TOBu?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAE_zFwB6ELW6Yitzba7Kt-wYyoqEFq6I6s

Mike and Brent tackle the “de minimis” rule under U.S. Export Administration Regulations (EAR), which would except certain below-threshold value U.S. items from being subject to the EAR. Three recent enforcement actions, all in 2026 and collectively imposing just under $300 million in penalties, underscore the perils of potentially misapplying the rule. Mike and Brent introduce the concept of “weathervane” regulatory language that can sway with the geopolitical and enforcement winds (2:59); the potential relevance of companies’ approaches to transfer pricing and country-of-origin (4:40); the relevance of old-fashioned arithmetic to identifying common nominator and denominator pitfalls (9:10); the recent enforcement action that included an unusually lengthy exposition by the U.S. Bureau of Industry & Security (BIS) of its interpretation of the de minimis rule (15:38); and the parallels to BIS’s rediscovery of the “high probability” standard (18:56). Mike and Brent conclude with the latest installment of Brent Carlson’s “Managing Up” segment (24:41). BIS “Guidelines for De Minimis Rules”: https://www.ecfr.gov/current/title-15/subtitle-B/chapter-VII/subchapter-C/part-734/appendix-Supplement%20No.%202%20to%20Part%20734 Contact Brent: [email protected] More about Brent: www.redflagsrising.com/founder Connect with Brent on LinkedIn: https://www.linkedin.com/in/brent-carlson-41ba692/ Contact Mike: [email protected] More about Mike: https://www.morganlewis.com/bios/michaelhuneke Connect with Mike on LinkedIn: https://www.linkedin.com/in/mhuneke/ The enforcement actions can all be found at www.bis.gov

Mike and Brent re-boot a prior recording overtaken by events, specifically the Sunday, May 31, 2026, guidance issued by BIS to global data centers and the June 12, 2026, “is-informed” letter by Commerce Secretary Howard Lutnick that caused an AI model company to take down its latest models. Mike and Brent first update listeners on pending legislation in the U.S. Congress (01:37). They then revisit last year’s May 13, 2025, announced intent by BIS to rescind the Biden-era “AI Diffusion Rule” (06:44), discuss questions around whether that rescission actually happened and, in any event, what was the status of U.S. export controls as a result (10:59), and then break down the May 31, 2025, guidance from BIS (15:53) including the opportunities and limitations of what reads like a “General Prohibition 10 Savings Clause” in the penultimate paragraph (19:43). They next discuss the Friday, June 12, 2026, “is-informed” letter issued by the Secretary of Commerce and its implications for industry (23:58). Then they conclude with a “Gray Rhino” edition of Brent’s “Managing Up” segment (26:18). Contact Brent: [email protected] More about Brent: https://www.redflagsrising.com/founder Connect with Brent on LinkedIn: https://www.linkedin.com/in/brent-carlson-41ba692/ Contact Mike: [email protected] More about Mike: https://www.morganlewis.com/bios/michaelhuneke Connect with Mike on LinkedIn: https://www.linkedin.com/in/mhuneke/ The BIS Guidance from Sunday, May 31, 2026: https://www.bis.gov/media/documents/bis-guidance-may-31-2026.pdf Michele Wucker, The Gray Rhino: How to Recognize and Act on the Obvious Dangers We Ignore (2016): https://www.amazon.com/Gray-Rhino-Recognize-Obvious-Dangers/dp/125005382X

Mike and Brent welcome to the podcast Jeff Stitt, the President of Acacia Trail Consulting. Jeff walks through how he went from becoming an engineer to being an on-the-spot chief compliance offer appointee in 1992 (01:36), to doing compliance at a bank (05:51), to having the opportunity to build and run a compliance program across Sub-Saharan Africa (08:00), and then to integrating a major acquisition into his company’s compliance program (12:10). Jeff explains how compliance programs are really “underwriting” the business’s activities (14:00) and then talks about the opportunity to build-out a global compliance program at a publicly traded company (16:30). Jeff concludes with a discussion about Acacia Trail (19:28) and what he’s seeing in the trade compliance space today (21:14). Mike and Brent then conclude with another edition of Brent Carlson’s Managing-Up (22:11). Contact Jeff: [email protected] More about Jeff: https://www.linkedin.com/in/jeffreylstitt/ Contact Brent: [email protected] More about Brent: www.redflagsrising.com Contact Mike: [email protected] More about Mike: https://www.morganlewis.com/bios/michaelhuneke

Mike and Brent return to discuss lessons from Brent’s Aikido instructor and Marine Corps combat veteran Frank Doran and how those lessons can help trade compliance professional work through compliance jams. Mike and Brent discuss the enforcement wave that unfolded in March 2026 (01:28); their March 10, 2026, National Security Law & Enforcement event in New York City (01:51); how that event was designed to get to practical solutions (02:30); the need today to have a broader “compliance aperture” (03:59); the importance of effective communication up to management and boards, especially around “central compliance risks” (the standard under Delaware law) (04:37); Carole Basri’s prediction that soon many companies will have Chief National Security Officers (05:31); two significant enforcement actions from Q1 2026 (07:42); the DOJ National Security Division’s March 30, 2026, announcement regarding voluntary disclosures (11:37); two significant indictments from Q1 2026 (12:06); boards of directors’ duty of oversight when it comes to national security (13:39); the relevance of increased agitation from the U.S. Congress for more enforcement (18:39); the status of the proposed Remote Access Security Act (19:35); and what is the compliance path forward, including Brent’s Fraud Four Circle Framework (21:57). Mike and Brent then conclude with a special edition of Brent Carlson’s “Managing Up” about Frank Doran and the meaning and importance—to not only infantrymen but also compliance professionals—of “Pull, Push, Tap, Aim, Fire” (24:40). BIS enforcement actions: https://www.bis.gov/enforcement/export-violations DOJ NSD Voluntary Disclosure Policy (Mar. 30, 2026): https://www.justice.gov/opa/pr/reporting-voluntary-self-disclosures-violations-national-security-laws-under-department-wide More about Frank Doran: https://aikido-west.org/frank-doran Frank Doran, "Pull, Push, Tap, Aim, Fire" (1995): https://aikido-west.org/pull-push-tap-aim-fire Boards of Directors and the Duty of Oversight: "Boards of Directors Lovin’ It after McDonald’s? A Fresh Look at Directors’ Duty of Oversight in the New Era of Sanctions & Export Control Corporate Enforcement," NYU PCCE Blog (Jan. 12, 2024), https://wp.nyu.edu/compliance_enforcement/2024/01/12/boards-of-directors-lovin-it-after-mcdonalds-a-fresh-look-at-directors-duty-of-oversight-in-the-new-era-of-sanctions-export-control-corporate-enforcement/ Brent’s Fraud Four Circle Framework article: "A Light Shines Through the Darkness in Disputes, Investigations, and Trade Compliance: A Fresh Look at the Classic Fraud Triangle with the Fraud Four-Circle Framework℠," NYU PCCE Blog (Jan. 8, 2026), https://wp.nyu.edu/compliance_enforcement/2026/01/08/a-light-shines-through-the-darkness-in-disputes-investigations-and-trade-compliance-a-fresh-look-at-the-classic-fraud-triangle-with-the-fraud-diamond-framework-sm/

Mike and Brent welcome Estelle Atkinson, a reporter with Global Investigations Review (GIR), to speak about her recent three-part series, “Fallen Chips,” published on January 26, 27, and 28, 2026 (linked in the show notes). They discuss how Estelle learned of the U.S. government investigation of Zenith Semiconductor in Chandler, Arizona (01:14); that company’s background (06:03); when employees started to realize that things were not quite right at the company and how that led to employees going to the FBI (08:19); how Estelle got to know the employees and why they were willing to help her with her story (10:30); how her experience illustrates more broadly the challenge companies have in responding to whistleblower reports or allegations (11:48); how diversion starts close to home, and is not always in some exotic “offshore” location (15:31); how U.S. administration policies to promote the export of the U.S. AI “stack” are not without controls or national security considerations (15:58); why success under America’s AI Action Plan and the American AI Export initiative will depend on effective, risk-based export controls compliance programs (16:21); the role of media in American life (19:14); why the standard PR or IR “playbook” of asserting “full compliance with the law” creates risks if companies aren’t expressly incorporating the full definition of “knowledge,” to include “an awareness of a high probability,” into export controls compliance (20:14); and what GIR readers can expect to see (or read) next from Estelle (20:49). Mike and Brent conclude with yet another installment of Brent Carlson’s “Managing Up” (22:39). GIR: https://globalinvestigationsreview.com/ Fallen Chips Part I: Inside the FBI Raid that Rocked an Arizona Chip Start-Up (Jan. 26, 2026): https://globalinvestigationsreview.com/just-sanctions/article/fallen-chips-part-i-inside-the-fbi-raid-rocked-arizona-chip-start Fallen Chips Part II: Silicon Secrets and the Risks Hiding in Plain Sight (Jan. 27, 2026): https://globalinvestigationsreview.com/just-sanctions/article/fallen-chips-part-ii-silicon-secrets-and-the-risks-hiding-in-plain-sight Fallen Chips Part III: The Fault Lines of the US-China Tech War (Jan. 28, 2026): https://globalinvestigationsreview.com/just-sanctions/article/fallen-chips-part-iii-the-fault-lines-of-the-us-china-tech-war More about Estelle: https://globalinvestigationsreview.com/authors/estelle-atkinson Contact Estelle: [email protected] Contact Brent: [email protected] Contact Mike: [email protected]

Back in January 2024, Mike and Brent had the good fortune to meet Carole Basri at an event at NYU Law School. On this episode of Red Flags Rising, they welcome her as a guest to talk about her specialties: national security, geopolitics, and corporate compliance. They specifically discuss Carole’s extensive professional background (00:59), a new treatise on National Security Law that Carole, Mike, and Brent are writing for the Practising Law Institute (PLI) (04:00), an upcoming event co-hosted by the New York State Bar Association’s International Section, Corporate Compliance Committee and Morgan Lewis, to which the new Assistant Secretary for Export Enforcement David Peters is an invited keynote speaker (08:18), why public enforcement officials remarks are relevant under U.S. export controls and other probability-based (i.e., “red flags”-driven) national security laws (09:26), how the U.S. Foreign Corrupt Practices Act (FCPA) was not only an example of that but also was really a child of an era where economic interdependency required a level of transparency and clean commerce to continue (12:00), and the relationship between Bretton Woods, Belt and Road, and Mike’s favorite book, Tales of an Economic Hitman, and what could be viewed with hindsight as effectively a U.S. policy decision to trade its own economic security for decades of (relative) world peace, increased global productivity, and increased living standards (16:52). Brent then closes out the discussion with the latest installment of his “Managing Up” segment (21:57), after which Mike makes some (further) book recommendations based on the discussion for those interested in further exploring some of the idea and concepts covered during the discussion: Robert Lighthizer, No Trade Is Free: Changing Course, Taking on China, and Helping America's Workers (2023), https://www.amazon.com/No-Trade-Free-Changing-Americas/dp/0063282135 John Perkins, Confessions of an Economic Hitman (1st ed. 2004, currently on the 3rd ed. 2023), https://a.co/d/0fdEyBAg W. Timothy Galloway, The Inner Game of Tennis (first published in 1972) (now a 50th anniversary edition is available), https://a.co/d/0hxybPKN Daniel Kahneman, Thinking Fast and Slow (2011), https://a.co/d/03Q0vF0M Michael Lewis, The Undoing Project (2016), https://a.co/d/09lcTL1M More about Carole: https://www.linkedin.com/in/carole-basri-038998/ Contact Brent: [email protected] Contact Mike: [email protected] Interested in learning more about the March 10, 2026 event? Contact Mike & Brent at the email addresses above.

Mike and Brent return for the new year with a refresher on The Fraud Diamond Framework(SM) introduced in Episode 34 and an explanation of how it would apply in practice as trade compliance professionals try to expect the unexpected in 2026. They discuss the importance of designing and implementing “compliance backstops” as geopolitical guardrails (01:47), how Stoic philosophy and the good work of Mo Bunnell (CEO and Founder of Bunnell Idea Group, author of Give to Grow) help build resiliency (03:40), review The Fraud Diamond Framework(SM) (05:57), describe how the framework can help trade compliance personnel to make and defend triage decisions (10:59), the implications of many trade compliance programs reaching a point in their evolution where they need to be able to demonstrate true integrity and effectiveness (13:45), the new 25% tariffs on certain semiconductors (14:38), and notable economic sanctions enforcement decisions related to lawyers’ advice or lawyers themselves (15:56). They conclude with Brent’s first Managing Up of 2026 (21:04).

Mike and Brent welcome author and compliance professional Severin Wirz to the pod to discuss his first book, Bribery Beyond Borders: The Story of the Foreign Corrupt Practices Act. They discuss with Severin his inspiration for writing the book (02:44), the book’s focus on the people and personalities involved in the events between 1975 and the 1977 passage of the FCPA (05:50), the political and geopolitical scandals that kept up the momentum for a law banning overseas bribery (06:59), what his research uncovered beyond the traditional FCPA origin story (10:49), the relevance of the Cold War to the FCPA’s passage—specifically how corruption by capitalists fed into Communist propaganda (12:39), how the political “sausage” was made (16:33), stories of personal courage and risk-taking that made the FCPA possible (18:27), the use of the phrase “post-Watergate morality” as a critique of the FCPA and other reform efforts (21:48), how anti-corruption laws actually help American companies competing for business overseas (29:21), where the FCPA stands today (31:17), and how corruption is a social construct that, to paraphrase former federal appellate judge and author himself John Noonan, to exist as a legal concept must first exist in the minds of everyday people (35:40). Mike and Brent then conclude with another installment of Brent Carlson’s “Managing Up” (38:14). Bribery Beyond Borders: The Story of the Foreign Corrupt Practices Act— Learn more at Corporate Compliance Insights here: https://www.corporatecomplianceinsights.com/bribery-beyond-borders-fcpa-severin-wirz/ Available at Amazon here: https://www.amazon.com/Bribery-Beyond-Borders-Foreign-Practices/dp/1735028592 More about Severin here: https://www.linkedin.com/in/severin-wirz-3574b574/ Contact Brent: [email protected] Contact Mike: [email protected]

Mike & Brent explore the classic “Fraud Triangle” of pressure, opportunity, and rationalization and discuss Brent’s creation of a new “Fraud Diamond Framework” (SM) to help trade compliance (and other) professionals who are looking not to explain past misconduct but instead to prevent future misconduct. They discuss recent news and developments in the export controls world (00:55), how seemingly inconsistent headlines are actually consistent with each other (04:05), and how Edward Fishman’s “impossible triad” concept continues to be a useful tool for understanding what’s happening in geopolitics and trade competition (06:22), and then they launch into their discussion of Brent’s Fraud Diamond Framework (SM) (08:05). Regarding the Fraud Diamond Framework (SM), they discuss the classic fraud triangle and the backward-looking perspective from which it was derived (09:18), and then explain the Fraud Diamond Framwork’s four elements of pressure (12:08), opportunity (13:06), something that’s too good to be true that comes at a critical time for the business (14:06), and signs of concealment (15:48). Brent next explains the Fraud Diamond Framework (SM) through a historical case study pulled from his own prior experience helping a client with a compliance commercial fraud dispute involving the acquisition of a business in China (17:35), after which they explain how the Fraud Diamond Framework (SM) can help trade compliance teams today (23:02). They conclude with another installment of Brent’s always popular “Managing Up” segment (24:43). Contact Brent: [email protected] Contact Mike: [email protected] “Chokepoints: American Power in the Age of Economic Warfare” by Edward Fishman: https://a.co/d/3Phvprs Brent’s original NYU PCCE post, “When Loopholes Create Liability Pitfalls: A Fresh Look at Export Controls” (Aug. 25, 2023): https://wp.nyu.edu/compliance_enforcement/2023/08/25/29814/

As the geopolitical and national political winds continue to swirl, Mike & Brent go back to basics to level-set and provide some foundational first principles of export controls compliance. They discuss the roller-coaster of the Affiliates Rule suspension (01:44); why the real risks from a compliance and enforcement perspective lay just outside of the Rule (02:37); how General Prohibition 10, the full definition of “knowledge” to include “an awareness of a high probability,” and the various inchoate provisions (i.e., causing, aiding and abetting, solicitation and attempt, conspiracy, acting with knowledge, misrepresentation and concealment, intent to evade, and failure to comply with recordkeeping requirements) are the foundational anti-diversion provisions under the U.S. Export Administration Regulations (EAR) (03:02); great listener feedback about how the Affiliates Rule shaped the in-house discussion of diversion risk (05:23); developing and implementing a high probability protocol as the only way to stay grounded in dynamic and challenging times (08:33); recent legislative proposals and hearings, including a recent hearing by a subcommittee of the House Foreign Affairs Committee focused on export controls loopholes, and the dangers of a dissatisfied U.S. Congress (09:42); why the definition of “knowledge” under the EAR is not mere legalese to be lost in the 1,467 pages (as of January 1, 2025) of the EAR but is instead the path forward for both government and industry (14:18); the details and implications of General Prohibition 10 (17:11); the details of the full definition of “knowledge,” including what we can learn from its history in the U.S. Foreign Corrupt Practices Act and, before then, the Model Penal Code (18:48); and recent enforcement activity by DOJ and BIS, and what the activity signals about the government’s next enforcement moves (22:30). They then conclude with the latest installment of Brent’s increasingly popular “Managing Up” segment (27:14). Contact Brent: [email protected] Contact Mike: [email protected] Brent’s latest NYU Program on Corporate Compliance & Enforcement (PCCE) post, “From Peanuts to Elephant-Sized Penalties: A Fresh Look at Recent U.S. Export Controls Enforcement Developments & Future Trends” (Oct. 31, 2025): https://wp.nyu.edu/compliance_enforcement/2025/10/31/from-peanuts-to-elephant-sized-penalties-a-fresh-look-at-recent-u-s-export-controls-enforcement-developments-future-trends/

Mike & Brent draw inspiration from the current Broadway run of Waiting for Godot starring Keanu Reeves and Alex Winter to suggest some first principals of risk-based export controls compliance to trade compliance teams. They discuss the futility of the oft-reported sentiment in the trade compliance press of wanting more or clearer guidance from the U.S. government about export controls risk management is not necessary, because the guidance is already here and the “high probability” standard offers a path forward (01:03); how the “high probability” standard and a return to anti-diversion first principles is a way to avoid a repeat of the compliance whipsaw effect occasioned by the announcement, then suspension, of the Affiliates Rule (a/k/a the 50% Rule) (03:47); how an example of this is focusing on your compliance and enforcement risks under General Prohibition 10 and the inchoate provisions of U.S. export controls (07:10); how neither the Affiliates Rule’s adoption nor its suspension changed GP10 or the other anti-diversion regulations under U.S. export controls (12:03); why efforts to comply with the Affiliates Rule were not wasted (14:23); how to deal with and overcome “compliance fatigue” in organizations (16:04); Brent’s latest NYU PCCE post (17:59); and why there was an over-focus on item-based classifications relative to knowledge-based end-use and end-user catch-all provisions and GP10 (19:17). They then conclude with a righteous installment of Brent Carlson’s “Managing Up” (21:36). “Waiting for Godot” starring Keanu Reeves and Alex Winter is currently playing at the Hudson Theater in New York City until January 4, 2026. For tickets: https://boxoffice.nyc.com/waiting-for-godot/13147/calendar/ Brent’s latest NYU Law School Program on Corporate Compliance & Enforcement post, from October 31, 2025: https://wp.nyu.edu/compliance_enforcement/2025/10/31/from-peanuts-to-elephant-sized-penalties-a-fresh-look-at-recent-u-s-export-controls-enforcement-developments-future-trends/ Brent’s email: [email protected] Mike’s email: [email protected]