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$200,000 Penalty for Brokering Exports of Defense Articles

Friday, October 07, 2016
Sandler, Travis & Rosenberg Trade Report

The State Department announced Oct. 5 that a Nevada company and its president have agreed to enter into a consent agreement to resolve two alleged civil violations of the Arms Export Control Act and the International Traffic in Arms Regulations.

Based on a compliance review, State’s Office of Defense Trade Controls Compliance alleged that the company president engaged in brokering activities for the proposed transfer of defense articles to Libya, a proscribed destination under the ITAR, despite State’s denial of the company’s requests for the required prior approval of such activities. State notes that the defense articles were not actually shipped to Libya and that the company president cooperated with DTCC in its review.

Under the terms of the consent agreement State will suspend a $200,000 penalty provided the agreement is not materially violated. In addition, the company president will refrain from participating in activities subject to the ITAR for four years. State determined not to administratively debar him based on his cooperation, and the Department of Justice dropped a related criminal case in light of the consent agreement.

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