The De Minimis Rule and the Challenge of "Weathervane" Regulatory Language

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: brent@redflagsrising.com

More about Brent: www.redflagsrising.com/founder

Connect with Brent on LinkedIn: https://www.linkedin.com/in/brent-carlson-41ba692/

Contact Mike: michael.huneke@morganlewis.com

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