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Criminal Fine, Civil Penalty, Suspension of Export Privileges for Unlicensed Dual-Use Export

Tuesday, July 28, 2015
Sandler, Travis & Rosenberg Trade Report

The Department of Justice and the Bureau of Industry and Security’s Office of Export Enforcement announced July 24 that an officer of an Iranian corporation pleaded guilty on its behalf to conspiracy to evade export licensing requirements in connection with an attempt to smuggle to Iran a large horizontal lathe that has possible military as well as civilian applications. As part of a plea agreement that is subject to court approval, the company has agreed that the U.S. government will recommend a $250,000 criminal fine. The company has also agreed under a settlement with BIS to pay a $837,500 civil penalty, $250,000 of which will be suspended for two years and subsequently waived as long as the company complies with the terms of the plea agreement and any criminal sentence and satisfies certain additional conditions. The company, which has previously been placed on the Entity List, will also have its export privileges suspended for two years.

Under U.S. law and regulations, U.S. companies are forbidden to ship dual-use items to Iran without first obtaining a license from the U.S. government. A joint agency press release states that the company, aware that it was unlikely that such a license would be granted for the shipment at issue, agreed with other alleged co-conspirators to falsely state on the shipping documents that the end-user was an affiliated company in the United Arab Emirates, knowing that the machine would subsequently be shipped to Iran after being off-loaded in the UAE.

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