This transcript was auto-generated using Adobe Premiere Pro.
00;00;01;23 - 00;00;35;25
Gregg Sofer
Ever wonder what is going on behind the scenes as the government investigates criminal cases? Are you interested in the strategies the government employs when bringing prosecutions? I'm your host, Gregg Sofer, and along with my colleagues and Husch Blackwell's White Collar, Internal Investigations and Compliance team, we will bring to bear over 200 years of experience inside the government to provide you and your business thought provoking and topical legal analysis as we discuss some of the country's most interesting criminal cases and issues related to compliance and internal investigations.
00;00;37;05 - 00;01;12;27
Gregg Sofer
Welcome again to the latest episode of The Justice Insiders. More than a year ago, we had a program that had Cortney Morgan, who is a partner in our Washington, D.C. office and the head of Hush Blackwell's International Trade team on to discuss the trade law implications of Russia's invasion of the Ukraine. After more than a year of conflict and with no end in sight, I wanted to invite Cortney back on the show to discuss what our policy responses have been and how those have implicated and impacted businesses here in the United States and all around the world.
00;01;12;28 - 00;01;15;03
Gregg Sofer
Cortney, thank you so much for joining us today.
00;01;15;17 - 00;01;17;16
Cortney Morgan
Thanks for having me. It's great to be back.
00;01;18;08 - 00;01;40;10
Gregg Sofer
So I think we should start with sort of a census of what has happened since the sanctions, the invasion of Russia occurred in February, February 24th of last year. The sanctions came pretty quickly. I think we discussed this in the last episode, how fast they were put together and how fast they were actually imposed on U.S. companies. And that was a real challenge at the beginning.
00;01;40;28 - 00;01;53;24
Gregg Sofer
But now we've had a year or so to understand the sanctions and to see them play out. And you're on the forefront of all of this. Wanted to get your thoughts about how it has played out and what you're seeing a year later.
00;01;54;11 - 00;02;22;21
Cortney Morgan
Yeah, well, thanks for having me on again. A lot has happened in a year. As you alluded to, there are not a lot of new sanctions that came sort of fast and furious in 2022, a year ago. But what we've seen over the last year is there's a lot more on the export controls side. There's been, you know, a number of months in a number of new iterations of targeted export controls that really cover almost everything going to Russia or Belarus.
00;02;23;10 - 00;02;45;14
Cortney Morgan
So it's tightened over time. And what we've seen as companies, I think they were weighing the risk sort of at the beginning, I think over the last year. Most companies that we work with at least have all sort of come to terms with this doesn't seem like it's ending any time soon. And they've made business decisions and compliance decisions.
00;02;46;03 - 00;03;14;10
Cortney Morgan
Either terminate operations there or to, you know, to get out of the market or figure out alternatives. And some of those were really painful decisions, but decisions that many of them felt they had to make. And there's obviously a personal element to it as well with employment and people there. But what we've seen, I think, over the last year or so is just a real uptick in terms of activism and for not necessarily enforcement.
00;03;14;10 - 00;03;37;18
Cortney Morgan
Yes, some enforcement, but more investigations going on by commerce and by customs and a lot of a lot of questions, a lot of follow up on shipments and just a lot of questions that leaves a lot of our clients wondering whether they're doing enough in terms of compliance and how to get ahead of it. So that's kind of where we stand.
00;03;38;05 - 00;04;03;13
Gregg Sofer
That's interesting. I mean, first of all, there's a geopolitical aspect to this which is gauging how long these sanctions will be in place and how devoted the U.S. government is to actually enforcing them. It sounds like that we've passed that threshold where folks have decided from a business perspective that that page has been turned. And this is this is going to be permanent or at least longstanding enough that it's going to affect your business for the long haul.
00;04;03;24 - 00;04;33;13
Gregg Sofer
So to disengage essentially. Of course, nobody really knows how this will play out on the ground militarily and geopolitically, but it's been back and forth and it certainly seems from the reporting on what's going on, on the ground, that this is going to last for a significant period of time. And even if it were to resolve itself, it's likely that these sanctions have effect and just generally the whole geopolitical situation is affected for the long term U.S., Russia relationships.
00;04;34;05 - 00;04;58;14
Gregg Sofer
So assuming the companies that we are and our clients that we deal with have disengaged. The question I think that comes up in this came up well before the Russia sanctions and it comes up a lot and the export enforcement and import regulations as well is where does the company's due diligence have to go? Where does it have to stop?
00;04;58;15 - 00;05;25;17
Gregg Sofer
In other words, you've now disengaged from a Russian corporation or a listed entity. But that's not good enough, is it? The companies are required to do some significant know your customer due diligence work to determine ultimately where their products are going or coming from and whether or not they're dealing with an entity ultimately that is listed or sanctioned in some way.
00;05;25;17 - 00;05;26;05
Gregg Sofer
Isn't that right?
00;05;26;13 - 00;05;53;11
Cortney Morgan
Yeah, for sure. And a lot of those are for companies that have compliance measures in place that that due diligence are those measures have been in place before. But I think they're even more you're digging even deeper now into the supply chain and and sort of where your shipments are going. So, you know, on the commerce side for the export administration regulations we have, the standard is is reason to know and knowledge.
00;05;54;00 - 00;06;18;09
Cortney Morgan
And then on the exact side of the House on sanctions is really a risk based approach. So on the export controls side, I mean, there's a number of red flags that companies should be looking for, looking at, you know, if they have a customer that a customer in a third countries, a Turkey or the Emirates, and is it, you know, is it a location they've worked with before?
00;06;19;17 - 00;06;42;04
Cortney Morgan
Are these familiar customers? Have they shipped there before? Is anything about the transaction changing? There's a number of red flags we encourage them to look at. But the bigger issue or what we're seeing right now is there's just a lot of knowledge that is in on their side of the equation. But what we're hearing from from commerce sort of from questions that we're getting about where shipments end up.
00;06;42;21 - 00;07;07;22
Cortney Morgan
So a lot of goods going to third countries that seem to end up and end up in Russia and Belarus as well. So there's there's sort of the due diligence you do on the front end, but also be prepared for questions you may get from commerce or customs. Sometimes they're detaining shipments because they know something related to the freight forwarder or to some party in the supply chain that may not be available to the U.S. party.
00;07;07;22 - 00;07;37;28
Cortney Morgan
So we're trying to encourage our clients to be sort of as active as possible on the front end, to not only get the information on the end user, but, you know, get in a new statement, ask about anyone in the string, the supply chain before the goods actually get to the end user and just document that. So you can present it to to commerce or to then any of the authorities and then start asking questions.
00;07;38;01 - 00;08;00;08
Gregg Sofer
I think that's really interesting. And something that folks have to understand is that the regulators are often working in the other direction or from the other direction. They start with product A, ended up in the wrong entities, hands in the wrong place and subject to the regulation, sanctions, whatever it may be. And then they're going to now track that all the way back.
00;08;00;08 - 00;08;23;02
Gregg Sofer
And that could, as you point out, result in a question to your company, because you were the supplier, even though there may have been two or three stops in between. So my question to you to begin with is, so how deep does a company have to dig? You talked about some prophylactic measures and documenting what they've done, but this is not BIS or OFAC or the Department of Justice.
00;08;23;02 - 00;08;38;15
Gregg Sofer
This is a company trying to make money. What is what level of digging is required for this so-called reason to know? Or are you just looking for red flags in the process? Which of those things is is the right kind of advice for companies?
00;08;38;20 - 00;09;03;04
Cortney Morgan
Yeah. So I think the red flags definitely. But I think even more than that know screening the party against the restricted parties lists. But I think that's sort of a threshold or table stakes, right. They need to definitely do that. But also doing desk research, looking at websites, making sure the address that you have for the customer is actually an address.
00;09;03;04 - 00;09;36;15
Cortney Morgan
Sometimes we look at Google and try to find actual pictures of the facility and make sure it's going, you know, that it actually exists. If you have sales teams in those locations that can go out and actually, you know, there's also plenty of companies you can hire to do background research on companies. So if it's a large enough transaction for you or this is going to be, you know, an ongoing customer that may be worth pursuing as well, but definitely doing more than just the restricted parties screening.
00;09;36;15 - 00;10;08;25
Cortney Morgan
I would also be actively trying to get as much information as you can on the company, the ownership, and especially if they're in any of these countries that sort of are being flagged as actives, transshipment points, Turkey, the Emirates, and those are ones that you should be asking more questions and just just preventatively, but also to protect yourself and then the sort of belt and suspender as well as I'm getting in in your statement.
00;10;08;25 - 00;10;19;20
Cortney Morgan
Right. So, you know, the customer recognizes that these goods are subject to export controls, that they can't be diverted, they won't be diverted, things like that. Those are all different measures.
00;10;20;07 - 00;10;54;10
Gregg Sofer
Yeah, that's your prophylactic move right there, at least at that point. If the government comes knocking, you say, hey, look, we listened to you, we told you it's supposed to go here. It can't go there. And if you do that, it's not on us. It's on you. But even with all of this, there are times, as we pointed out, where the investigators and by the way, it's clear that BIS that's the Bureau of Industry and Security inside of Commerce, the Department of Justice has created an entire unit that's responsible for doing these kinds of investigations.
00;10;54;10 - 00;11;16;08
Gregg Sofer
Treasury's working hard. A lot of resources have been put into enforcing the Russia sanctions, but also this. This extends to China and a number of other countries around the world. So it appears that we're in a period of increased enforcement or at least the likelihood of increased enforcement. You said that you're seeing a lot more investigative activity, which, of course, precedes enforcement.
00;11;16;08 - 00;11;43;26
Gregg Sofer
So we could expect to see enforcement after the investigation, presumably. And so let's say, unfortunately, your product did end up in the wrong place or with the wrong freight forwarder or in the wrong third parties hands. And they ended up shipping it to a known bad actor in the world or something that's been precluded under the or other regulations.
00;11;43;26 - 00;11;49;03
Gregg Sofer
When you get that first letter, let's say, from BIS, what's going through your head?
00;11;49;23 - 00;12;12;18
Cortney Morgan
So first, you know, before we would figure out how to respond, we try to get a lay of the land and figure out, is this an isolated incident? Is a larger problem? Is it something we missed? Right. You go back through because of, you know, mistakes happen something. But was there anything deliberate? Right. Is it is it a larger problem or are we talking about negligence or are we talking about something more serious?
00;12;12;27 - 00;12;38;07
Cortney Morgan
So we try to take a look at the facts and what we have and what the situation is. And then if there's, you know, an ability to be cooperative or it really depends on where you are in the transaction. But can you avail yourself of a voluntary self-disclosure? Ideally, you get cooperative and mitigate mitigating credit with the IRS for that.
00;12;39;02 - 00;12;43;19
Cortney Morgan
The same with OpEx. So trying to get to them before there's a larger investigation.
00;12;44;08 - 00;13;07;04
Gregg Sofer
You know, we've talked a lot on the podcast about self-disclosure and what a difficult issue it is for companies. The government very much wants companies to disclose information voluntarily, and in fact, they've been putting policies in place for a long time about that and really emphasizing them of late to reward disclosures and that kind of behavior and to punish the withholding of information in that context.
00;13;07;28 - 00;13;30;29
Gregg Sofer
But there's also risks that come with disclosure. You might not have all the facts or the information, particularly at the beginning of a of an incident or an investigation. And if you haven't been able to properly vet the information, you could actually give the government errant or wrong information, and that could cause all kinds of problems. You expose yourself, for instance, to making false or incomplete disclosures at that point.
00;13;30;29 - 00;13;46;07
Gregg Sofer
And there's really no guarantee that the disclosure will ward off penalties or even criminal prosecution. The government doesn't sign a piece of paper at the beginning saying, if you give us this, we're not going to come after you. So how do you counsel your clients on this issue, particularly in those initial fraught moments?
00;13;47;13 - 00;14;12;15
Cortney Morgan
Yeah, so I think every you know, every company is different. Size becomes a factor, right. That that engagement in the market, you know how big a situation we're talking about. And yeah, I mean, I think every company weighs the risk of whether before the most recent guidance came out, whether to move forward to make a disclosure. Is this something we can just correct and fix?
00;14;12;15 - 00;14;43;00
Cortney Morgan
And maybe it's not really something we need to bring to his attention or attention. But I think given the uptick in and sort of personnel and at DOJ and BIS and seeing there is this enforcement posture and, you know, hearing statements like sanctions or the new FCPA and, you know, sanctions enforcement. So I think there is more there's more concern on the part of companies and they want to do the right thing.
00;14;43;20 - 00;15;14;00
Cortney Morgan
But there is there's this sort of danger I see where and I've seen it many times where you make disclosures and then you get a lot of questions from front that you're now sort of and it's what a company doesn't want is to be on their radar. Right. You know, because there's also an outreach portion of every disclosure when you're assigned to an agent, they then come out to you and do an outreach session and they want you to let them know if there are any issues and things like that.
00;15;14;00 - 00;15;41;19
Cortney Morgan
So. So there is that, you know, you always have to balance that risk. But sometimes and many times I think for companies, they want to put their best foot forward. They want to wipe the slate clean, fix the issue, move forward with it and mitigate any potential penalty. So I think for the most part, most companies generally, you know, generally go forward with a disclosure, but sometimes some don't.
00;15;41;20 - 00;15;45;01
Cortney Morgan
It's not necessarily in their best interest at the time in place.
00;15;45;01 - 00;16;08;15
Gregg Sofer
So yeah and then the you know, whether you make a disclosure or not, the, the company always wants to understand is constantly asking, I know my clients ask me, well, what, what is the government thinking? What are they why are they asking this question? My experience is that depending on what what agency you're dealing with, you get varying degrees of answers to that.
00;16;08;15 - 00;16;24;24
Gregg Sofer
It also depends on the individual investigator sometimes or what the nature of the investigation is, obviously is a huge part of this, but often I'm unable to answer those questions. I can tell folks, based on my 30 years of experience in the government, what I think the government is thinking, occasionally someone will actually tell me what's going on.
00;16;24;24 - 00;16;34;08
Gregg Sofer
But many times the government has to be or chooses to be very tight lipped about it and is not responding to two answers. Have you experienced that kind of thing as well?
00;16;34;27 - 00;16;56;18
Cortney Morgan
Yeah, I mean, it can be very difficult where you get questions. You know, we've had a number of them where we get questions on a transaction or on a shipment and then, you know, our client will just want to know, is this customer bad actors or something we're not seeing on our end? We've done all the due diligence I talked about before, but we're not seeing any issues here.
00;16;57;01 - 00;17;18;00
Cortney Morgan
You know, commerce, can you please help us? Should we terminate this customer? Should we? Because then you get into tight situations, too, right? You have contractual issues. You have. So you don't want to make any rash decisions. And but you also want to sort of identify the issue or bring closure to it. And I found that they're just very secretive about it.
00;17;18;00 - 00;17;39;08
Cortney Morgan
They can't share the information. And it's just it's difficult. It's you're kind of left in limbo. You wait a couple of months and then maybe it's just better to stop transacting business with this customer. And so, yeah, it's a very difficult process. And I wish I've seen it resolved better where we get a report, but I haven't seen it to date.
00;17;39;08 - 00;17;58;02
Gregg Sofer
So, you know, it's definitely not unusual during an investigation for the government to ghost you or just disappear for a long time. And yet our clients are always asking justifiably for answers. They want to know what people want. They want to know what's going to happen next. They want to know why the government's doing this or asking about one thing or another.
00;17;58;21 - 00;18;18;09
Gregg Sofer
And as you point out, they may have contractual obligations to consider as well. It's not always an easy thing or even an advisable thing to walk away from a commercial relationship. Even if the government is inquiring about your business partner, it makes for a complicated and difficult situation for sure. Courtney, can you tell us a little bit about your experience with trans shipping?
00;18;18;21 - 00;18;26;29
Gregg Sofer
I'm not sure. Everyone in our audience knows exactly what trans shipping is. You referred to it earlier and it's certainly a focal point of the sanctions regime.
00;18;27;28 - 00;18;59;12
Cortney Morgan
Yeah. So trans shipping is goods are destined for, you know, destined for one country. They end up going through a third country. So by example, let's say we have goods shipping from the U.S. They're destined for Turkey and they end up in Russia. Did they not? Unbeknownst to you, you did none of the paperwork for that out. You have an end you statement from the customer that the goods won't be sent anywhere else.
00;18;59;21 - 00;19;34;01
Cortney Morgan
They're going to be consumed. They're used there. And they you then hear from government authorities that they have you know, sometimes they have other paperwork that shows the goods. Actually, the same invoice that you have showing the goods going to Turkey or going to another country. Something's changed about the paperwork, but we also have it on the import side as well, where transshipment is a big enforcement area right now because it's coupled transshipment and evasion, where there are a number of antidumping and countervailing duty orders.
00;19;34;01 - 00;19;56;10
Cortney Morgan
So those are orders that the cases in the US brought before the International Trade Commission, the Department of Commerce, where U.S. companies will come together to sort of challenge that a foreign producer or foreign companies are sending goods to the US at below market value. And so.
00;19;57;23 - 00;19;59;16
Gregg Sofer
Dumping them into the United States.
00;19;59;25 - 00;20;23;18
Cortney Morgan
And into the U.S. market. So what we're seeing a lot of right now is customs is very active in challenging sometimes the origin of goods. Right. Alleging that the goods are being transferred through a third country. So, you know, saying these goods are really Chinese goods and subject to an anti-dumping order, but we're really buying goods from Canada and we understand them to be Canadian origin.
00;20;23;18 - 00;20;45;11
Cortney Morgan
We have paperwork that says that we have certifications from the supplier, but something on customs that they have reason to believe that the goods are Chinese origin. So you see it on both sides on the import and export side. But we're seeing enforcement on both ends right where we're getting a lot of questions from customs about it, a lot of detained containers, detain shipments.
00;20;45;11 - 00;21;04;28
Cortney Morgan
And similarly, on the export side, you have customs doing the same role, but enforcing for commerce. So they will hold shipments and say, oh, this these goods look like they're actually going somewhere else. And we've seen instances where they show us documents that completely are different than the documents we had on the transactions.
00;21;05;06 - 00;21;16;24
Gregg Sofer
So and so can you can you talk a little bit about that? So there's docket, as you pointed out numerous times, there's lots of documents that accompany these kinds of transactions. How do you end up with different sets of docks.
00;21;17;11 - 00;21;45;07
Cortney Morgan
So that ideally the invoice should be the same? Right. The invoice, I mean, because you're getting you're issuing the invoice, you're the on the export side, at least then you'll have a bill of lading, you'll have a packing loss, you'll have the actual export documents. And we see this most often when when our client isn't necessarily the exporter on the shipment, but you have under the export administration regulations, you have certain responsibilities.
00;21;45;16 - 00;22;20;21
Cortney Morgan
If your the party who's arranging the goods for export. So you have certain data elements and information that you're required to give to the party who's actually the exporter. So what we're seeing a lot of is foreign companies will designate a US agent, a US company to handle like a freight forwarder to handle their exports and we, some of our clients will hand the goods off and they have the goods off with the paperwork saying it's going to Country X and then we come to find out the freight forwarder has prepared paperwork going to a completely different location.
00;22;21;29 - 00;22;41;12
Cortney Morgan
And so it happens and it I mean, it's not something that we could have we asked all the questions at the front end. Right. We got we get it. In a new statement, we investigated the company. We looked at their location and we but things happen that are out of your control because you don't have the goods at that point.
00;22;41;12 - 00;22;59;12
Gregg Sofer
So and I assume that people are making lots of money finding ways to get products, either dump them into the United States or getting them to a sanctioned country like Russia. So there's a large profit margin in being able to do that.
00;22;59;20 - 00;23;25;10
Cortney Morgan
Yeah, for sure. And yeah, as you alluded to on the import side, you're skirting very significant. You have the China tariffs, right, the 25% tariffs, but then you also can have anti-dumping and countervailing duties that can be upwards of 100, 200% more duties. So there's very, very consequential impact there. There was a huge loss of revenue to customs that they're very interested in.
00;23;25;10 - 00;23;46;20
Gregg Sofer
So so we've talked a lot about the Russia sanctions. We've mentioned China a couple of times. What are the other hot button sort of issues these days? I know for a while and I think still there's slave labor issues. What else are you seeing out there that that our clients and folks in general should should know about.
00;23;46;25 - 00;24;13;28
Cortney Morgan
Yeah biggest area and you touched on it forced labor but now it's more of that the weaker sanctions so we call it also has the acronym weak or Forced Labor Protection Act which went into effect last year. And there's definitely a lot more manpower, a lot of sort of concerted effort on customs and to to really start to enforce those restrictions.
00;24;13;28 - 00;24;39;17
Cortney Morgan
And so we're seeing a lot of detentions where there's very little very similar to the export side, where there's an investigation ongoing. They will detain a shipment and you get no information as to why they think these goods are from the weaker region. So it causes a lot of a lot of issues for companies. A lot of these goods are in the textile, textile space.
00;24;39;21 - 00;25;06;12
Cortney Morgan
They're starting to target and target automotive goods. So the next tranche we're looking at is aluminum products. They've been saying automotive products, automotive parts is really the area. But customs has also said they're open to anything aluminum. So but what we've seen is they will detain a shipment and you basically it's a it's your job to disprove why the goods are not sourced from that region yet.
00;25;06;12 - 00;25;30;01
Cortney Morgan
You have no idea what portion, whether it's the thread, whether it's the fabric, whether it's the buttons on the material, like what it is that they think is implicated. So, you know, you spend, you know, clients are spending hours and millions of dollars to try to trace their supply chain and get their suppliers to provide all this information.
00;25;30;11 - 00;25;50;25
Cortney Morgan
And then it sort of goes into a black box at customs where they just they decide to continue to they force you to do shipments and you're left with not knowing the result. You don't get an investigative report or anything like that. So you're just forced to export the shipment and then wonder, is this going to happen to all my shipments after this?
00;25;50;25 - 00;25;57;04
Cortney Morgan
Right. Stop using that supplier. Do I move to another one? So it's a very difficult situation.
00;25;58;01 - 00;26;18;00
Gregg Sofer
Difficult indeed. And the sanctions are still evolving. I mean, our efforts to date have not resulted in a military or political resolution of the conflict in Ukraine. And we're still seeing additional layers of sanctions, as well as other proposed actions in addition to what's already been implemented. I know your team is staying on top of all this activity.
00;26;18;00 - 00;26;25;00
Gregg Sofer
Cortney, can you share with us, please, the blog that you all maintain where the audience can find up to date information on trade policy?
00;26;25;23 - 00;26;54;04
Cortney Morgan
Sure. Yeah, it's called the International Trade Insights, and we try to do probably a couple of times a week updates on all areas of trade. So a lot of the import related issues, export controls, sanctions, we also cover supply chain and logistics issues. So intellectual property infringement, but I would say the bulk of our content of late has been Russia sanctions related.
00;26;54;28 - 00;27;17;19
Cortney Morgan
Really the export controls as well. And then some recent enforcement decision, things like that that are have really significant, significant penalty implications, which we haven't seen huge penalties like that out of vice before. You've seen them out of whack. And as I said, a number of settlement agreements in the last few weeks.
00;27;17;19 - 00;27;20;26
Gregg Sofer
Can you just tell those of our listeners don't know what OFAC is?
00;27;20;26 - 00;27;46;24
Cortney Morgan
What stands for So OFAC is the Office of Foreign Assets Control. It's a part of the Department of Treasury. And I like to say they deal with the financial implications. So I mean, that embargoes and sanctions, but dealing with sort of financial transactions in the moving of goods back and forth where commerce is really more focused on the actual export of items and technology.
00;27;46;24 - 00;28;23;19
Cortney Morgan
And I think that's actually something that was really different about the Russia and Belarus sanctions. As to your point of the difficulty of whether it's really have it having the stifling effect that maybe the government was hoping for, I think that's why we're seeing so much activity on the export control side, because there were so many U.S. goods right then, whether it was luxury goods, whether it was we're seeing it now in the chem bio area where there's a lot of equipment, that standard laboratory equipment that now is now would require a license to be exported to Russia.
00;28;23;19 - 00;28;47;29
Cortney Morgan
And you can't get licenses for that. So they're taking a very broad brush to what now requires a license. And I think that's deliberate because they know that goods are being ending up there. Right. We're seeing a lot of that. A lot of I guess maybe oligarchs or wealthy Russian individuals had aircraft, things like that. You know, they targeted the aircraft.
00;28;47;29 - 00;29;03;03
Cortney Morgan
But now those aircraft need parts, right? So parts thereof. I'm hearing about that as well. Parts are coming from third countries that have to be U.S. parts. Right. They were never destined to go to Russia, but they're now being shipped from third countries.
00;29;03;11 - 00;29;29;08
Gregg Sofer
Right. As we said before, I mean, apart sitting in a third country for an oligarch's plane, a Russian oligarchs plane that used to be worth three bucks today. Today is probably worth 300 because. Right. They're going to a real tough time just calling for the United States to get it. It's hard to hard to control that. And that's part of what the regime is trying to the export control regime is trying to control.
00;29;29;08 - 00;29;57;25
Gregg Sofer
But it's difficult when things are the unintended consequences of of really policing this stuff and licensing it, controlling its movement. It causes price increases. And so Putin's energy costs, for instance, energy profits are up, some say as much as 18% as long as he can sell the energy somewhere for a higher price, even if he sold a lot less of it, the sanctions just don't hurt him as much.
00;29;58;28 - 00;30;05;04
Gregg Sofer
Well, Cortney, thank you so much for coming on. Really appreciate your input. Do you have any other final thoughts before we leave?
00;30;05;16 - 00;30;35;19
Cortney Morgan
No, I think I think we've covered we've covered a lot. I think I guess I would just say companies seem to be doing a lot in the diligence phase in trying. It's always been preventative. But I think we talked a lot about sort of the activist nature of things going on right now. So to the extent they don't have compliance plans or due diligence measures in place, I would encourage them to to get on top of that and try to figure it out before bias comes to talk to you about.
00;30;35;24 - 00;30;47;25
Gregg Sofer
It's a great point. An activist, resourced government requires an activist resource compliance department and compliance. Okay. Well, thank you again so much for coming on now.
00;30;47;26 - 00;30;48;23
Cortney Morgan
Thanks for having me.
00;30;48;29 - 00;31;06;22
Gregg Sofer
Take care. Thanks for joining us on The Justice Insiders. We hope you enjoyed this episode. Please go to Apple Podcasts or wherever you listen to podcasts to subscribe rate and review the Justice Insiders. I'm your host, Gregg Sofer. And until next time, be well.