ROSCOE C. HOWARD, JR.
United States Attorney for the
District of Columbia

Judiciary Center
555 Fourth St. N.W.
Washington, D.C. 20530

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Channing Phillips (202) 514-6933
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For Immediate Release - July 17, 2003

Washington, D.C. - United States Attorney Roscoe C. Howard, Jr. and Department of Commerce Acting Assistant Secretary for Export Enforcement Lisa A. Prager announced that DSV Samson Transport, a freight-forwarding company based in New Jersey, pleaded guilty today in U.S. District Court for the District of Columbia before the Honorable Royce C. Lamberth to a two-count Information, charging violations of the International Emergency Economic Powers Act and the Export Administration Act. In pleading guilty, DSV Samson admitted to forwarding over 30 shipments to India, between November 1999 and May 12, 2001, despite being warned by Special Agents from the Office of Export Enforcement on at least three occasions that such shipments would be in violation of Department of Commerce export controls designed to prevent nuclear proliferation. DSV Samson Transport was immediately sentenced by the Court to a $250,000 fine, an $800 special assessment and five years of probation.

Separately, the Department of Commerce’s Bureau of Industry and Security and DSV Samson have tentatively agreed that DSV Samson will pay a civil penalty of $399,000 to resolve related administrative charges.

In announcing today’s guilty plea and sentencing, United States Attorney Howard warned that “freight forwarders are the last link in the export chain and must not knowingly make shipments from the United States that do not comply with the export laws for the safety and protection of our national interests. Because of the position that freight forwarders hold in the chain of international commerce, they have a unique opportunity to ensure export compliance. Freight forwarders, and anyone else with responsibility for compliance with U.S. export laws, will be held responsible for such compliance, particularly when our national security is at issue.”

Acting Assistant Secretary of Commerce for Export Enforcement Prager stated, "this case demonstrates that the Department of Commerce will hold freight forwarders accountable for fulfilling their responsibilities under our export control laws. Forwarders play a key role in the global supply chain. As such, it is important that they be extremely attentive to their export control obligations."

Freight forwarders are in the business of forwarding shipments for their exporting customers. A freight forwarder does not itself manufacture or sell goods, but provides the service of arranging and monitoring the intermediate stages of air, sea, or ground transport necessary for an exporting customer's shipment to reach its intended destination. The law imposes upon all parties, including freight forwarders, an obligation to refrain from knowingly participating in illegal export transactions.

In May 1998, India detonated a nuclear test device. In response to this test, in November 1998, the Department of Commerce expanded the “Entity List,” a list of organizations published in the Export Administration Regulations (“EAR”), to include end-users of concern in India, thereby imposing a licensing requirement on virtually all exports to these organizations.

According to the government’s evidence, from December 1998 to June 1999, DSV Samson Transport, Inc. caused six illegal exports of items, valued in total over $13,500, such as radio frequency test equipment, a pulse generator, and an oscillator to the Government of India, Directorate of Purchase and Stores, Department of Atomic Energy, in India, which was an organization listed on the Entity List, without the required Department of Commerce licenses.

On June 29, 1999, a Special Agent from the Department of Commerce’s Office of Export Enforcement (“OEE”) warned the sales manager at DSV Samson Transport, Inc. in New Jersey that Bharat Heavy Electricals was listed on the Entity List, and gave the sales manager OEE outreach materials that included a description of the civil and criminal penalties that can be assessed for violations of the EAR. This information also included phone numbers for questions or self-disclosures of previous violations. Shortly thereafter, the sales manager sent an e-mail to his staff specifically addressing the Entity List and warning that shipments to India, among other countries, must be checked against the Entity List and if the consignee of the shipment appeared on the list, an export license would be required “regardless if the shipper is sending a paper clip or just documents.”

In August 1999, a different OEE agent, on a routine outreach visit, met with the sales coordinator and export supervisor of DSV's California office, who denied knowledge of the Entity List and the EAR. The agent warned the DSV employee of the firm’s obligations and the potential penalties for violations. Thereafter, the sales coordinator and export supervisor sent a memorandum to DSV sales and export personnel referencing a shipment DSV had forwarded to a listed entity, that was later found to be illegal, warning of potential fines and jail terms for future violations, and referring them to the Department of Commerce web page for the EAR and further information about licensing and compliance.

In October 1999, an OEE Special Agent contacted a DSV export supervisor in New Jersey regarding a possible illegal export by DSV in May 1999. The export supervisor acknowledged that there may have been illegal shipments prior to the June 1999 visit, but told the agent that DSV was in compliance thereafter.

From November 13, 1999, to February 17, 2000, DSV forwarded nine illegal shipments of items, valued in total over $36,800, such as lenses, electronic equipment, and instruments to the Government of India, Directorate of Purchase and Stores, Department of Atomic Energy, to Bharat Heavy Electricals, and to the Nuclear Power Corporation of India, which were organizations listed on the Entity List, for which export licenses were required. DSV forwarded these shipments with the knowledge that its customers, who were exporting the items, had not obtained the required export licenses.

On March 17, 2000, the Department of Commerce changed its policy of presumption of denial for certain items being exported to organizations in India on the Entity List, but a license was still required for exports to such entities and was subject to case-by-case basis review.

From April 2000 to May 2001, DSV forwarded 21 illegal shipments of items, valued in total over $102,200, such as a power supply, software, a transducer, a radioisotope, and oscillators to the Government of India, Directorate of Purchase and Stores, Department of Atomic Energy, to Bharat Electronics, Ltd., and to Bharat Heavy Electricals in India, all organizations then on the Entity List. Again, DSV forwarded these shipments with the knowledge that its customers, who were exporting the items, had not obtained the required export licenses.

In addition, DSV representatives have made assurances to the U.S. Department of Commerce that an extensive export compliance program has been implemented that it intends to be a model for the international freight forwarding business.

In announcing today’s conviction, U.S. Attorney Howard and Acting Assistant Secretary of Commerce for Export Enforcement Prager commended the work of OEE Special Agents Michael Imbrogna and Scott Dunberg. They also praised Assistant United States Attorney Wendy Wysong.