Background

The Bureau of Industry and Security has issued an order imposing a $469,060 penalty against a U.S. company for conspiring to export semiconductor manufacturing equipment to a Chinese company on the Entity List without the required BIS license.

Prior to engaging in this transaction the U.S. company was informed that the Chinese company was on a black list and that its name should not be shown on shipping documents. The U.S. company responded that it could continue with the transaction because the Chinese company was not its customer but that of its distributor. It also continued to ship items to the Chinese company after becoming aware it was on the Entity List on the belief that the license requirement did not apply to consumables and accessories.

BIS is suspending all but $50,000 of this penalty for a year and waive it entirely once the U.S. company takes one of the following actions.

- dissolves or ceases its business operations

- is acquired by a U.S.-based company that (1) maintains a written code of conduct that includes a corporate commitment to follow the direction of U.S. export control regulatory authorities, including U.S. regulations on exports and reexports of controlled commodities and technologies, and (2) employs trained personnel to ensure such compliance

- completes the one-year probationary period with no further export violations

For more information on compliance with export controls, please contact attorney Kristine Pirnia via email.

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