The Bureau of Industry and Security has issued an order imposing a $1.5 million civil penalty against a company regarding 13 alleged violations of the Export Administration Regulations.
BIS alleged that over the course of a year this company caused, counseled, procured, or aided the in-country transfer of nearly 900 items subject to the EAR (under EAR99) to a Chinese company on the Entity List without the required BIS license or other authorization. BIS states that the company knew this restricted entity was the end-user and that the items would be transferred in-country for use in constructing a semiconductor fabrication facility.
However, due to its inadequate corporate compliance controls, the company did not appreciate the applicability of U.S. export controls over in-country transfers of goods subject to the EAR by China-based distributors to a customer in China. When it discovered the transfers it investigated the matter, voluntarily disclosed the transactions to BIS, and retained outside counsel to investigate.
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