Export Controls Without Borders: A New Era of Global Compliance

The recent enforcement activity against Robert Bosch GmbH has sent shockwaves through the business world, highlighting the far-reaching implications of U.S. export controls on foreign-made products. The Foreign Direct Product Rule (FDPR) was once an obscure regulatory provision but has expanded in recent years to become a primary mechanism for extraterritorial control over global technology supply chains.

This shift in the risk calculus for multinational companies operating abroad is driven by a fundamental change in understanding: even non-U.S. companies using U.S.-origin technology at any stage can be subject to U.S. export rules. The FDPR’s expansion of jurisdiction is not limited to specific companies or countries but applies broadly, making compliance a pressing concern for global businesses.

The FDPR originated as a Cold War-era provision designed to prevent the transfer of U.S.-derived technology to Soviet bloc nations in 1959. It remained largely dormant until May 2020, when the Bureau of Industry and Security (BIS) expanded it to target Huawei Technologies specifically. This marked a turning point for the FDPR, as it began to be used as a powerful tool to restrict access to advanced technologies.

The rule has since been deployed in swift and decisive expansions. In February 2022, the FDPR was part of the U.S. sanctions response to Russia’s invasion of Ukraine, restricting Moscow’s access to foreign-made electronics, avionics, and other dual-use goods. The October 2022 issuance of sweeping new export controls targeting China’s advanced semiconductor, artificial intelligence, and supercomputing sectors further solidified the FDPR’s position as a cornerstone of U.S. extraterritorial control.

The June 2026 resolution involving Robert Bosch GmbH serves as both a success story and a cautionary tale for companies navigating this complex landscape. While the company’s voluntary self-disclosure, full cooperation, and timely remediation may have earned them a declination from prosecution under the Commerce Control Eligibility Program (CEP), the $11.4 million disgorgement and $36.2 million civil penalties imposed by BIS are a stark reminder of the consequences of non-compliance.

The FDPR’s expansion has far-reaching implications for global businesses, forcing companies to reevaluate their compliance strategies and internal controls. As U.S. export controls extend beyond national borders, companies must contend with the prospect of being subject to extraterritorial jurisdiction based on the use of U.S.-origin technology in even the smallest component parts.

The Bosch case highlights a critical aspect of this new era: compliance expectations are rising rapidly. The company’s trade compliance personnel, who mistakenly believed the FDPR applied only to physical goods and ignored external warnings, exemplify the systemic failures that can occur when companies underestimate the complexity of U.S. export controls.

As global businesses adapt to these changing circumstances, it is essential to recognize the significance of this shift in the international regulatory landscape. The FDPR’s expansion represents a fundamental transformation in the way nations exercise control over their technology supply chains, one with profound implications for global trade and commerce.

Multinational companies will need to navigate this complex landscape carefully, anticipating how they will adapt to new compliance expectations and what role self-disclosure and cooperation will play in determining the fate of those who stumble into non-compliance. One thing is clear: the old rules no longer apply.