California Biotech Firm Settles Charges of Unlicensed Exports of Biological Toxins

The U.S. Department of Commerce today announced that EMD Biosciences, Inc. (EMD) of San Diego, California, has agreed to pay a $904,500 civil penalty to settle charges that it exported biological toxins to Canada in violation of the Export Administration Regulations (EAR). Under the terms of the Settlement Agreement, EMD’s export privileges under the EAR were denied for a period of two years, all of which is suspended provided that EMD commits no violations of the EAR during the period of suspension.

The Commerce Department’s Bureau of Industry and Security (BIS) charged that, between June 2002 and July 2003, EMD committed 134 violations of the EAR stemming from 67 exports of biological toxins to Canada that were made without obtaining required Department of Commerce export licenses.

"Exports of biological toxins are closely controlled to prevent them from being used by hostile entities and terrorists to produce biological weapons. The Commerce Department aggressively enforces these controls, and will impose significant penalties to companies like EMD that repeatedly fail to comply with regulatory requirements,” said Wendy L. Wysong, Acting Assistant Secretary of Commerce for Export Enforcement.

BIS enforces export control and related public safety laws to advance U.S. national security, foreign policy, and economic interests. Export controls on biological toxins are part of U.S. obligations as a member of the Australia Group, a multilateral regime whose members are committed to curbing the proliferation of chemical and biological weapons. All member countries are committed to maintaining export controls on both chemicals and biological toxins that could be used for weapons proliferation purposes.

EMD was formerly known as CN Biosciences, Inc. (CN), and previously paid civil fines for unlicensed exports of the same and similar toxins. In 1999 CN agreed to pay a civil penalty of $708,000 to the Commerce Department to settle charges that between July 1992 and January 1994, CN made 171 unlicensed shipments to various destinations in violation of the EAR. $354,000 of the civil penalty was suspended for one year provided that the company committed no further violations of the EAR during that time.

Acting Assistant Secretary Wysong commended the Special Agents of BIS’s Office of Export Enforcement, Los Angeles Field Office, for their work in this investigation.