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Company Fined, Required to Audit Export Controls Due to Illegal Export

Tuesday, September 29, 2015
Sandler, Travis & Rosenberg Trade Report

The Bureau of Industry and Security has issued an order imposing various penalties against a Maryland company to resolve charges that it exported three spiral duct production machines and related accessories controlled under the Export Administration Regulations to an entity in China designated as a weapons of mass destruction proliferator. BIS states that the company did not check any of the U.S. government’s screening lists in connection with the preparation of this export and did not seek authorization from either BIS or the Office of Foreign Assets Control.

The order imposes a $50,000 penalty but will suspend it for two years and waive it thereafter provided that the company commits no further export violations during that time. The order also requires the company to complete an audit of its export controls compliance program and submit a report on this audit to BIS. If the audit identifies actual or potential EAR violations the company must promptly provide copies of the pertinent waybills and other export control documents and supporting documentation to BIS. Further, the company’s president, vice president of administration and treasurer, vice president of supply division, and sales representative must each complete an export compliance training on the EAR within 12 months.

If any of these conditions are not met, BIS may suspend the company’s export privileges for one year.

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