TAIWAN FIRM SETTLES CHARGES OF ILLEGAL EXPORTS TO THE PRC

WASHINGTON – The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced today that Johnson Trading & Engineering Company, Ltd. of Taiwan has agreed to a $90,000 civil penalty to settle charges that it knowingly caused the unlicensed export of computer chips to the People’s Republic of China (PRC) in violation of the Export Administration Regulations (EAR). BIS also charged that Johnson Trading took action to evade the EAR.

“BIS is taking a hard-line with license exceptions being used to evade licensing requirements,” said Kevin Delli-Colli, Deputy Assistant Secretary for Export Enforcement at BIS. “The conditions and restrictions on all EAR license exceptions should be strictly adhered to by both exporters and consignees.”

BIS charged that, between February 2003 and December 2003, Johnson Trading took action to evade the EAR and knowingly caused the unlicensed exports of computer chips from the United States, via Taiwan and Hong Kong, to the PRC.   On seven occasions, Johnson Trading ordered the computer chips from a U.S. exporter and falsely represented to that exporter that the country of ultimate destination was Taiwan.  Following the shipment of the computer chips to Taiwan, Johnson Trading arranged and facilitated for the items’ subsequent shipment to the PRC via Hong Kong.  The computer chips in question were subject to the EAR and controlled for national security and anti-terrorism reasons.

Johnson Trading also agreed to a suspended five-year denial of export privileges and to an audit of the company’s export compliance program. If the company complies with other terms of the agreement, $30,000 of the $90,000 penalty will be suspended.

Deputy Assistant Secretary for Export Enforcement Delli-Colli commended the Washington Field Office for its work on the investigation.

Background
BIS controls exports and re-exports of dual-use items, technology and software for reasons of national security, foreign policy, nuclear nonproliferation, chemical and biological weapons, nuclear non-proliferation, regional stability, and short supply.  Criminal penalties and administrative sanctions can be imposed for violations of the EAR.

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