The Bureau of Industry and Security has issued an order penalizing a U.S. company and its president for multiple and intentional violations of U.S. export laws and regulations. BIS notes that the penalties imposed reflect admissions of liability as well as guilty pleas, convictions and sentences in a related federal criminal prosecution.
According to BIS, these entities conspired with a computer and electronics equipment distributor to conceal and misrepresent the identity of the exporter or U.S. principal party in interest on shipper’s export declarations or Automated Export System records by using the name and exporter identification number of a separate company without its knowledge or consent. This allowed the distributor to repeatedly export the equipment anonymously and contrary to the terms of its distribution agreement with the U.S. manufacturer and enabled the penalized company to obtain the distributor’s substantial forwarding business, which involved hundreds of transactions valued in total at approximately $22 million. The entities also made false statements to BIS special agents investigating this scheme, and attempted to get the second company to do the same, in an effort to further the conspiracy and avoid detection.
The BIS has therefore issued an order that assesses a civil penalty of $500,000 on both the company and its president but suspends $350,000 of that penalty for five years (and waives it thereafter) provided they commit no further export violations during that time and fully comply with the sentences imposed in connection with their convictions. The BIS order also denies each of their export privileges for five years but suspends this denial during a five-year probationary period (and waives it thereafter) provided they pay the civil penalty, comply with their criminal sentences and commit no further export violations during that time.