Texas Company Agrees to a Civil Penalty of $99,000 for Illegal Exports of Telecommunications Equipment to Cuba

The U.S. Department of Commerce today announced that LogicaCMG, Inc., of Houston, Texas, agreed to pay a $99,000 civil penalty to settle nine charges that predecessor and affiliated entities, CMG Telecommunications of Nashua, New Hampshire, and CMG Wireless Data Solutions of Brazil, violated the Export Administration Regulations (EAR) in connection with unlicensed export of telecommunications equipment through Panama to Cuba.

“This case illustrates that the U.S. Government will aggressively investigate and prosecute efforts to evade the dual-use export control system. It also illustrates the dangers for companies that do not conduct proper due diligence in mergers and acquisitions,” Assistant Secretary Darryl W. Jackson said.

The Commerce Department’s Bureau of Industry and Security (BIS) charged that from July 2001 through October 2001, CMG Telecommunications and CMG Wireless Data Solutions conspired to export and did export a single node short message service center (SMSC) from the United States through Panama for ultimate delivery to an end-user in Cuba without the required export license. The equipment was controlled for national security, anti terrorism and encryption item reasons. BIS further charged that CMG Telecommunications took actions to evade the provisions of the EAR by concealing the fact that Cuba was the country of ultimate destination and acted with knowledge of a violation when it transmitted technical data to Cuba by e-mail to assist in the installation of the SMSC without getting the required export license.

Nearly all exports of dual-use items to Cuba require a license from the Department of Commerce. Consistent with U.S. law, the Department of Commerce does not issue licenses for, or otherwise authorize, most types of exports to Cuba. However, exceptions have been made for certain limited categories of exports such as agricultural exports or certain exports in support of the Cuban people.

“I would like to commend our Special Agents from the Boston Office of Export Enforcement for their excellent work on this case,” added Assistant Secretary Jackson.

LogicaCMG also pled guilty in the U.S. District Court, District of New Hampshire on April 25 to violating the International Emergency Economic Powers Act for the unlicensed export of the SMSC through Panama to Cuba and was ordered to pay a $50,000 criminal fine.