SOUTH AFRICAN COMPANY SETTLES CHARGES OF UNLICENSED RESALE OF CYANIDES TO UNAUTHORIZED END USERS

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For Immediate Release: November 17, 2005
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South African Company Settles Charges Of Unlicensed Resale Of Cyanides To Unauthorized End Users

The U.S. Department of Commerce today announced that ProChem (Proprietary), Ltd., as successor corporation to Protea Chemicals (Proprietary), Ltd., based in Gauteng, South Africa, agreed to pay civil penalties totaling $1.54 million to settle administrative charges pertaining to unauthorized resales of U.S.-origin sodium cyanide and potassium cyanide to end users in South Africa. These resales were made in violation of conditions set forth in Department of Commerce licenses issued to Protea and in violation of the Export Administration Regulations (EAR).

“It is absolutely imperative that recipients of BIS export licenses follow the terms and conditions associated with their licenses,” said Darryl Jackson, Assistant Secretary of Commerce for Export Enforcement. “This case demonstrates how seriously the Department of Commerce treats violations of export license conditions.”

The Department of Commerce’s Bureau of Industry and Security (BIS) charged that, on 112 occasions between November 1999 and December 2003, Protea resold U.S.-origin sodium cyanide and potassium cyanide to various unauthorized business entities in South Africa. BIS further charged that Protea committed an additional 112 violations of the EAR by reselling these controlled commodities with knowledge that conditions on its Department of Commerce licenses did not authorize resale to the end users.

BIS controls the export of potassium cyanide and sodium cyanide for chemical and biological weapons proliferation reasons. These chemicals are considered precursor chemicals for potential chemical weapons. BIS imposed a condition on the licenses issued to Protea prohibiting the resale of the chemicals to users not specifically listed on the licenses.

The Department of Commerce administers and enforces export controls for reasons of national security, foreign policy, nonproliferation, anti-terrorism and short supply through the EAR. Criminal prosecution and administrative sanctions may be imposed for violations of those regulations.

Assistant Secretary Jackson commended BIS’s Washington Office of Export Enforcement for its work in this investigation.