$35,000 Penalty, Compliance Audit for Unlicensed Exports to India
The Bureau of Industry and Security has issued an order imposing a $35,000 civil penalty against a New Jersey company to settle charges that it violated the Export Administration Regulations by exporting gas storage containers and related tools and accessories designated as EAR99 to an Indian entity on the BIS Entity List. Although this company is an experienced exporter, BIS states, it failed to screen the Entity List in connection with these transactions and failed to seek or obtain the required BIS licenses. It also erroneously listed the items as eligible for shipment without a license (NLR) on the shipper’s letter of instructions for each shipment.
In addition to paying the civil penalty, the company will have to hire an unaffiliated third-party consultant with expertise in U.S. export control laws to conduct an external audit of its compliance with those laws (including recordkeeping requirements) with respect to all exports, reexports, and transfers (in-country) subject to the EAR. This audit must cover a 12-month period and be in substantial compliance with the Export Management and Compliance Program sample audit module. If the audit identifies actual or potential EAR violations the company must promptly provide copies of the pertinent invoices, waybills, and other export control documents and supporting documentation to BIS.
If the company fails to pay the civil penalty in a full and timely manner or timely complete the audit and submit the results, BIS may deny the company’s export privileges under the EAR for one year.