Nearly $1 Million in Penalties for Attempt to Smuggle Dual-Use Item to Iran
The Department of Justice announced Jan. 6 that an Iranian corporation has been sentenced to pay a $100,000 criminal fine for conspiracy to evade export licensing requirements in connection with an attempt to smuggle to Iran a machine with possible military as well as civilian applications. The company has also agreed under a settlement with the Bureau of Industry and Security to pay a $837,500 civil penalty, $250,000 of which will be suspended for two years and then waived so long as the company complies with the terms of the plea agreement and any criminal sentence and satisfies certain additional conditions. The company will also be made subject to a two-year suspended denial of its export privileges and was previously placed on the Entity List, which identifies foreign parties that are prohibited from receiving listed items unless the exporter secures a license.
The machine at issue, a large horizontal lathe also described as a bar peeling machine, is used in the production of high-grade steel for the manufacture of automobile and aircraft parts. According to a DOJ press release, the company and its co-conspirators knew the U.S. government was unlikely to grant a license to export this item to Iran and therefore agreed to falsely state on the shipping documents that the end-user was an affiliated company in Dubai, knowing that the machine would subsequently be shipped to Iran.