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For Immediate Release
June 3, 2003

Contact:
BIS Public Affairs
(202) 482-2721

COMMERCE DEPARTMENT FINES KANSAS FIRM FOR UNLICENSED PETROLEUM EXPORTS

Acting Assistant Secretary of Commerce for Export Enforcement Lisa A. Prager announced today that a $200,000 civil penalty has been imposed on Flint Hill Resources L.P. - formerly known as Koch Petroleum Group, L.P. - of Wichita, Kansas to settle allegations that the company exported crude petroleum from the United States to Canada without the required U.S. Government authorization. The Commerce Department controls the export of crude petroleum to any foreign destination to protect the domestic supply.

The Commerce Department's Bureau of Industry and Security (BIS) alleged that between July 1997 and March 1999, Koch Petroleum committed 40 violations of the Export Administration Regulations by exporting crude petroleum to Canada on 20 occasions without the required export licenses and Shipper's Export Declarations. Acting Assistant Secretary Prager noted that in determining the amount of the penalty, BIS gave consideration to the facts that Koch Petroleum voluntarily self-disclosed the violations, stopped exports of oil once the violations were discovered, and enhanced its export compliance program.

BIS administers and enforces export controls for reasons of national security, foreign policy, nonproliferation, anti-terrorism, and short supply. Criminal penalties and administrative sanctions can be imposed for violations of the Export Administration Regulations.

Acting Assistant Secretary Prager commended Special Agent John Ruiz of the Office of Export Enforcement's field office in Dallas, Texas, who conducted the investigation of this case.


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