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$115,000 Fine for Unauthorized Deemed Export of Manufacturing Technology

Thursday, February 27, 2014
Sandler, Travis & Rosenberg Trade Report

The Bureau of Industry and Security announced Feb. 24 a $115,000 civil penalty against a California company for five violations of the Export Administration Regulations, including the unauthorized release of controlled manufacturing technology to a foreign national in the U.S. BIS notes that organizations that most commonly obtain licenses for such deemed exports include universities, high technology research and development institutions, and bio-chemical firms.

According to a BIS press release, the company voluntarily disclosed the unauthorized release of drawings and blueprints for parts and identification numbers for parts to a Russian national employed as an engineer at the company’s headquarters. Under the EAR, such information constitutes technology that is controlled for national security reasons. The press release notes that the company applied for a deemed export license after discovering the initial releases but failed to prevent additional releases while the license application was pending. BIS charged the company with knowledge of these additional releases and considered the company’s conduct to be an aggravating factor in the penalty assessment. The company was also charged with one violation related to the unauthorized transmission of technology to its subsidiary in China.

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