Background

A U.S. company will pay a $60,000 civil penalty to settle Bureau of Industry and Security charges that it violated U.S. exports rules. The company will also be required to complete an export compliance training within the next year.

According to a BIS order, the company sold a five-axis benchtop milling machine, which is controlled on nuclear nonproliferation and anti-terrorism grounds, to the United Arab Emirates without the required BIS license. BIS states that the company knew or had reason to know of the license requirement because it had previously applied for and received such licenses for exports of this item to other destinations.

BIS notes that the company also (1) failed to obtain end-user information for this transaction even though the item was paid for prior to shipment by a third party, also in the UAE, that had not been previously involved in the transaction and (2) should have conducted due diligence because items controlled on nuclear nonproliferation grounds can be of significance for nuclear explosive purposes and the UAE was known as a transshipment point to Iran.

BIS notes that $35,000 of the penalty will be suspended for two years and subsequently waived if the company commits no further export violations during that time.

For more information on ensuring that your company complies with applicable export controls, please contact attorney Kristine Pirnia via email.

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