Background

The attempted smuggling of a dual-use export-controlled item to Russia has resulted in the forfeiture of approximately $826,000.

According to a press release from the Department of Justice, beginning in 2018 operators of a foreign corporation conspired with the operator of a company in a separate country, as well as individuals in Russia and a Russia-based company, to smuggle a jig grinder manufactured in the U.S. to Russia. This item is a high-precision grinding machine system that does not require a license to export to European Union countries but does require a license for export and reexport to Russia because of its potential application in nuclear proliferation and defense programs. However, DOJ states that the companies at issue did not apply for, receive, or possess a license or authorization from the Department of Commerce for this shipment.

DOJ notes that several individuals and companies involved in this alleged scheme have been charged with conspiracy, violation of the Export Control Reform Act, smuggling goods from the U.S., and international money laundering conspiracy offenses.

DOJ adds that the investigation was coordinated through Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing the sanctions, export controls, and economic countermeasures the U.S. and others have imposed in response to Russia’s invasion of Ukraine.

For more information on ensuring your company is in compliance with restrictions on exports to Russia, please contact Kristine Pirnia at (202) 730-4964 or via email.

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