The Bureau of Industry and Security has issued separate orders imposing civil penalties against U.S. companies for alleged violations of the Export Administration Regulations.
In one order BIS assessed a $1 million penalty to settle charges that the company caused exports from abroad of items subject to the EAR without the required BIS authorization. Exports or re-exports from abroad of foreign-made commodities are subject to the EAR if they incorporate a controlled U.S.-origin commodity valued at greater than 25 percent of the total value of the foreign-made good, the order states, but here the company incorrectly concluded that the exports at issue did not meet that threshold because it used erroneous methods to value them. BIS alleged that the company also used a pricing structure designed in part to evade EAR licensing requirements by lowering the value of controlled U.S. content. The company was also charged with an unlicensed export of items subject to the EAR to an address identified on the BIS Entity List.
In another order BIS levied a penalty of nearly $375,000 against a company charged with uploading specifications for an item controlled for national security and regional stability reasons under the EAR to a portal operated by a Chinese manufacturer located in China. A license was required for such activity, with no license exceptions available, but the company did not seek or obtain any such license. The company then bought items from the Chinese manufacturer that were produced based on those specifications and supplied those items to the U.S. Navy using packaging and a specification sheet that falsely represented the identity of the manufacturer.
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