Saint-Gobain Settles Charges of Unlicensed Exports

The U. S. Department of Commerce today announced that Saint-Gobain Performance Plastics, Inc. (SGPPL) of Garden Grove, California, agreed to pay a $697,500 civil penalty to settle charges that it exported controlled Teflon-coated valves and pumps in violation of the Export Administration Regulations (EAR).

The Commerce Department’s Bureau of Industry and Security (BIS) charged that, on 189 occasions between November 1998 and September 2000, SGPPL or Furon Corporation (acquired by SGPPL in 1999) exported controlled valves and pumps to Israel and Taiwan without the required export licenses from the Department of Commerce. BIS also charged that SGPPL failed to file a Shipper’s Export Declaration (SED) for some of these shipments and filed SEDs for others which falsely indicated that the shipments did not require an export license.

BIS controls valves and pumps that have the interior (or wetted portions) coated with a fluoropolymer (such as Teflon) that is highly resistant to corrosion from chemicals. Teflon-coated valves and pumps are controlled by BIS for chemical/biological warfare purposes and for anti-terrorism purposes.

Of the 189 violations that BIS claimed that SGPPL committed, 123 of the violations were committed by the Furon Corporation prior to its acquisition by SGPPL in 1999. Under the principles of successor liability, corporations may be held liable for violations of export control laws committed by businesses that they acquire.

Assistant Secretary for Export Enforcement Julie L. Myers stated: “Cases such as this demonstrate the importance of voluntary self-disclosures. Consistent with BIS’s recently issued civil penalty guidance, the penalty in this case could have been significantly less if the company had voluntarily self-disclosed the violations.”

Ms. Myers also commended Senior Special Agent James W. Lowry of BIS’s Los Angeles Field Office for his efforts in the investigation.