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Companies Indicted on Charges of Evading Trade Sanctions

Friday, December 06, 2019
Sandler, Travis & Rosenberg Trade Report

The Department of Justice reports that a newly unsealed indictment has charged U.S., Russian, and Italian companies and nationals in a conspiracy to evade international trade sanctions. The charges of conspiring to violate the International Emergency Economic Powers Act and the Export Control Reform Act carry penalties of up to five years in prison and a $250,000 fine, and the charges of conspiracy to commit wire fraud and launder monetary instruments carry penalties of up to 20 years in prison and a $500,000 fine.

According to the indictment, a Russian government-controlled business contracted to purchase from a U.S.-based manufacturer a power turbine designed and manufactured for integration with gas generators to enable direct drive of high-power gas compressors. Evidence in the case established the intent of the Russian company to use the turbine on a Russian Arctic deepwater drilling platform, which was expressly prohibited by the Department of Commerce for reasons of national security. In an attempt to evade this restriction, the parties conspired to conceal the true end-user of the turbine from both the U.S. manufacturer and the U.S. government by submitting false documentation stating that the turbine would be used by a U.S. company in and around Atlanta.

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