Background

The Bureau of Industry and Security has imposed a $350,000 civil penalty against a U.S. company for violating the Export Administration Regulations. However, $300,000 of this penalty will be suspended for two years and then waived provided the company commits no further export violations during this time.

BIS states that on three occasions the company exported certain laser systems controlled for national security and anti-terrorism reasons to China without the required licenses. BIS notes that in transaction documentation for these shipments the company erroneously listed the applicable ECCN as EAR 99 and indicated that no license was required. The company also directed a freight forwarder to file electronic export information in connection with each of these exports that listed Hong Kong as the ultimate destination despite knowing that the goods were destined for China.

Separately, the company exported a different laser system to a university in China that was listed on the Entity List without seeking or obtaining the required export license. BIS notes that although the company was aware of the agency’s investigation into other violations it still did not have in place an export control compliance program that included screening foreign customers against U.S. export controls lists.

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

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