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Practice Areas

Companies Debarred from Defense Trade Activities for Unauthorized Exports

Tuesday, June 10, 2014
Sandler, Travis & Rosenberg Trade Report

The State Department has administratively debarred three companies and their principal officer from directly or indirectly participating in any activities that are subject to the International Traffic in Arms Regulations for three years in response to the unauthorized reexport and retransfer of night vision devices and related technical data. A press release notes that this action is the result of the department’s first administrative proceeding against a foreign individual and associated foreign entities by referral of a charging letter before an administrative law judge pursuant to ITAR section 128.4 and that the referral and debarment followed the respondents’ failure to answer the formal charges.

According to the press release, an extensive compliance review by the department’s Office of Defense Trade Controls Compliance found that the man and his associated companies reexported and retransferred defense articles in violation of department authorizations and used falsified export control documents. Upon notification of their ineligibility to engage in defense trade by the department, the man and one of the companies changed or established new business names and engaged third-party purchasers to conceal their activities and evade detection, and further reexports and retransfers of previously exported defense articles continued under these new business names. State notes that while the results of the compliance review indicated that no direct harm to U.S. foreign policy or national security occurred, the nature of the violations and the respondents’ efforts to conceal their continued involvement despite ineligibility prompted the department to formally charge the respondents with 366 violations of the Arms Export Control Act and the ITAR.

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