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$100,000 Penalty for Conspiracy to Export Controlled Items to China

Monday, April 30, 2018
Sandler, Travis & Rosenberg Trade Report

The Bureau of Industry and Security has imposed a $100,00 civil penalty against a U.S. company and its owner for violating the Export Administration Regulations by exporting electronic equipment controlled on national security grounds to China without the required BIS export license.

According to BIS, the entities obtained the equipment from U.S. manufacturers in what they made to appear as domestic transactions and then exported the items while taking steps to avoid export control scrutiny and detection. These steps included concealing the type of equipment involved, its value, and/or its ultimate destination; using packaging that was deliberately relabeled to falsely identify the items inside; and transshipping the equipment via Hong Kong while falsely stating on export transaction documents that Hong Kong was the ultimate destination.

BIS is suspending half of the civil penalty as well as a five-year denial of export privileges for five years, and will waive these measures thereafter, provided that the company and its owner pay the other half of the penalty, comply with the provisions of the settlement agreement, and commit no further export violations during that time.

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