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$3.5 Million in Fines for Illegal Exports and Reexports of Armored Vehicles

Thursday, September 03, 2015
Sandler, Travis & Rosenberg Trade Report

The Bureau of Industry and Security has issued orders imposing the following civil penalties in connection with unlawful reexports of U.S.-origin vehicles retrofitted with ballistic steel and bulletproof glass.

- $1.6 million against a United Arab Emirates parent company and its UAE subsidiary (with $750,000 suspended for three years)

- $1.6 million against a South Carolina subsidiary of the UAE parent (with $750,000 suspended for three years)

- $250,000 against a Canadian man who was the chairman, chief executive officer and sole or majority owner of all three companies referenced above

- $50,000 against a South Carolina man who was a director and vice president of operations for the U.S. subsidiary

The BIS orders also deny these entities’ export privileges for three years but suspend that penalty provided the amounts above are paid in a full and timely manner and no further export violations are committed during that time.

In addition, the three companies must complete and submit two audits of their export controls compliance programs, at least the first of which must be conducted by an unaffiliated third-party consultant with expertise in U.S. export control laws. If these audits identify actual or potential violations of the Export Administration Regulations the companies must promptly provide copies of the pertinent air waybills and other export control documents and supporting documentation.

The conduct at issue included (a) exports of vehicles to Venezuela without waiting for the BIS to issue an export license that had been applied for, (b) reexports of vehicles from the UAE in violation of a BIS license condition that no resale, transfer or reexport of the vehicles was permitted without prior U.S. government authorization, and (c) false or misleading statements to BIS in connection with license applications.

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