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In
FY 2000, BXA's Office of Export Enforcement (OEE) and the Office of Enforcement
Analysis (OEA) continued their programs to prevent and investigate dual-use
export control violations and thereby protect important national security
and foreign policy interests safeguarded by the Export Administration Act
(EAA) and Export Administration Regulations (EAR). Additionally, Export Enforcement's
Office of Antiboycott Compliance continued to administer and implement the
antiboycott policy and program articulated in Section 8 of the EAA.
BXA's Export Enforcement arm has 162 trained professionals, including 104 special agents, who enforce the EAA and the EAR, the Fastener Quality Act, and the Chemical Weapons Convention Implementation Act. Export Enforcement educates exporters, interdicts illegal exports, and prosecutes violators. Working closely with BXA's licensing officers and policy staff, BXA's export law enforcement officers apply their special skills and understanding of the export control system to minimize exports of potentially damaging dual use items to unreliable users.
When there is reason to believe that the EAA or EAR have been violated, Export Enforcement's special agents and compliance officers investigate and recommend the initiation of appropriate charges. During FY 2000, $1,107,500 in civil penalties and $689,300 in criminal fines were imposed for export control violations of the EAA and EAR. A total of $164,000 in civil penalties for antiboycott violations of the EAA and EAR was imposed.
The Office of Export Enforcement (OEE) is headquartered in Washington, D.C. Its Investigations Division has eight field offices, located in Los Angeles; San Jose; Chicago; Dallas; Miami; Boston; New York; and Herndon, Virginia. Special agents are empowered to make arrests, carry firearms, execute search warrants, issue subpoenas, and seize items about to be illegally exported.
OEE's Intelligence and Field Support Division, located at headquarters, is staffed by special agents and analysts. This staff serves as a conduit between the intelligence community and OEE's field offices.
OEA assists OEE's field offices and BXA's licensing offices by receiving and disseminating export control-related information. OEA also makes recommendations to BXA's licensing officers concerning pending license applications based on intelligence and investigative information.
OEE and OEA routinely review all incoming license applications. During FY00, BXA enforcement personnel examined 6,118 export license applications in considerable detail to assess diversion risks, identify potential violations, and determine the reliability of proposed consignees as recipients of controlled U.S.-origin items. Based on this review, EE recommended that 148 license applications either be rejected or returned without action because of diversion risks or other enforcement concerns. Together, these applications represented $86,888,379 in potential illegal trade.
In addition, as part of BXA's ongoing responsibility for preventing illegal exports before they occur, 281 pre-license checks (PLCs) were completed in FY00, and enforcement staff recommended that 32 license applications be rejected or returned without action. Together, these applications represented $14,434,832 of trade in situations in which violations of the EAA and EAR may have occurred had the transactions been completed. As a result of unfavorable PLC replies, eleven referrals were forwarded to OEE's field offices for further investigation.
Post-shipment verifications (PSVs) are performed to ensure that the commodities exported under certain export license authorizations are in fact received at the location designated on the export license and are being used in accordance with the stated and authorized end-use and in compliance with imposed license conditions. In 2000, EE agents conducted 684 PSVs. Four hundred seventy three of these were conducted by OEE special agents as part of the Safeguards program, while the other 211 were conducted by Foreign Commercial Service or other personnel assigned by American embassies. Forty-five PSVs produced information that required further enforcement action such as the initiation of investigations, license application screening, and license revocations.
During FY 2000, OEE conducted numerous investigations, some of which led to both criminal and administrative sanctions. It also issued 192 warning letters in cases of minor violations, informing the recipients that OEE had reason to believe they had violated the EAR, and that increased compliance efforts were warranted.
Chemical Weapons Convention<
Under the Chemical Weapons Convention (CWC) Implementation Act of 1998, certain commercial chemical production and processing facilities are required to submit data declarations and to permit international inspections. In preparation for fulfilling its responsibilities under this legislation, OEE participated in host team training for CWC inspections, as well as a mock inspection exercise with BXA's Export Administration and the Office of Chief Counsel for Export Administration at a chemical production and processing facility. OEE worked with the State Department and other government agencies to clarify OEE's enforcement roles under the CWC implementing legislation and regulations.
OEE worked with other BXA offices and Office of Chief Counsel for Export Administration on drafting an administrative warrant to be served on commercial facilities that refuse to grant consent for inspections. OEE also worked with other BXA officials to review inspection reports and declarations for possible record-keeping violations.
National Defense Authorization Act of 1998
The National Defense Authorization Act (NDAA) enacted on November 18, 1997, contains provisions requiring regulation and careful scrutiny of sales of high-performance computers (HPCs) to certain countries of concern. The NDAA requires those who wish to export high-performance computers to these countries to notify the Department at least ten days prior to export. During the ten-day period, relevant Government agencies review the pre-export notification. If any agency has an objection, a license is required. The NDAA also requires the exporters to submit a post-shipment report to the Department, and requires that the Department conduct post-shipment verifications (PSVs) on-site at the end user's location to verify the installation and the end use of each HPC.
EE maintains a high-performance computer division in OEA to coordinate and supervise all enforcement responsibilities under the NDAA. EE conducted the mandated PSVs and submitted the second NDAA Annual Report to the designated Congressional Committees on December 13, 1999. The report examined exports of HPCs to countries of the greatest proliferation concern, and the results of EE's PSVs for the reporting period of November 18, 1998, through November 17, 1999. As part of continuing training for all EE agents, EE also included special training sessions on the NDAA and high-performance computers.
Project Outreach
As part of its public education efforts, OEE special agents participated in numerous seminars and trade shows across the country. They also developed contacts with private sector firms through Project Outreach, a program which provides firms with specific export guidance, gives OEE a better understanding of the private sector's needs, and provides valuable investigative leads. OEE conducted 1,025 Project Outreach visits during the fiscal year.
Safeguards Verification Program
OEE's Safeguards Verification Program was developed in 1990 to ensure the legitimate use of strategic U.S. goods and technology by the newly emerging democracies of Central Europe, traditional points of diversion to the former Soviet Union. OEE's Safeguards Verification Program has expanded worldwide to conduct on-site pre-license and post-shipment checks using Export Enforcement personnel instead of officers from Commerce's U.S. and Foreign Commercial Service. The Safeguards Verification Teams travel overseas to determine the disposition of licensed or otherwise controlled U.S.-origin commodities, particularly those of proliferation concern. These Safeguards Verification Teams also assess the suitability of foreign firms to receive U.S.-origin licensed goods and technology and conduct educational visits to foreign firms, often in cooperation with host government officials.
International Law Enforcement Cooperation
In FY 2000, Export Enforcement (EE) expanded its international cooperative efforts. Working with its BXA and interagency counterparts, EE had a number of significant achievements.
Senior export enforcement officials, including the Assistant Secretary, spent much of the year working with other countries on "best practices" for effective export enforcement. As a result of these efforts, the Wassenaar Arrangement's General Working Group adopted the best practices drafted by EE.
This past year, EE's export control attache at the U.S. Embassy in Beijing conducted numerous post shipment visits in the People's Republic of China. Secretary Mineta made a public announcement when the number of checks reached 100 in September 2000. EE conducted these visits under the End-Use Visit Arrangement, which it successfully negotiated with its counterparts at China's Ministry of Foreign Trade and Economic Cooperation. In addition, EE helped organize the first-ever U.S. - China export control seminar designed for businesses from those two countries, held in October 2000.
EE worked with Hong Kong to increase its cooperation with the United States on enforcement matters. The October 1997 Agreed Minute, signed by Secretary Daley with his Hong Kong counterpart, continued to form the basis for U.S.-Hong Kong export control cooperation. Throughout the year, both in Hong Kong and Washington, officials worked together to ensure that U.S. products destined for Hong Kong were not illegally diverted to China. EE worked with Hong Kong Customs officials on a significant enforcement case -- ASL Limited, involving diversions of high-performance computers to China via Hong Kong.
EE also headed delegations to a number of enforcement seminars and workshops with other countries, including the first export enforcement workshops held with officials in Tashkent, Uzbekistan and Tblisi, Georgia. These meetings advanced the understanding of those countries of important export enforcement techniques.
EE also participated in U.S. export control seminars and workshops with more than 50 countries in the Newly Independent States (NIS), Central/Eastern Europe, the Baltic States, the Central Asian republics, and all significant countries in Asia. In all of these discussions, EE provided in-depth information on the practical methods to enforce export control laws and regulations.
This past year, EE continued to work with foreign counterparts as part of the DOD-FBI Counter Proliferation Program for Newly Independent States of the former Soviet Union and Central/Eastern European Countries. EE special agents were part of the U.S. government enforcement cadre which provided extensive training to enforcement authorities at the Budapest-based International Law Enforcement Academy.
EE also took part in discussions with the international nonproliferation regimes, including enforcement seminars of the Wassenaar Arrangement and the Missile Technology Control Regime and the plenary sessions of the Nuclear Suppliers Group. EE participated in the February 2000 Asian Export Control Seminar involving 19 Pacific Rim countries and chaired the seminar's enforcement panel.
Throughout the year, EE continued its enforcement assistance to the four nuclear NIS, as well as Baltic, Central European, Central Asian, and Caucasus states. The Assistant Secretary for Export Enforcement and other senior EE officials met with many Central European and NIS export control delegations in Washington, D.C. to provide perspectives on EE's investigative and preventive enforcement techniques.
As a result of these efforts, the governments of these countries have either implemented or initiated export control programs that incorporate effective enforcement concepts, including development of watch lists, end-use checks, a professionally trained investigative force, interagency and international law enforcement cooperation, and use of administrative and criminal sanctions and penalties.
Shipper's Export Declaration Review Program
As the volume of export licenses has decreased, EE has increased the number of Shipper's Export Declarations (SEDs) that it reviews. Under the SED Review Program, on-site reviews of selected SEDs are conducted by OEE Special Agents at U.S. ports. OEE Special Agents review numerous transactions before selecting a smaller target group for closer scrutiny.
A systematic review of SEDs at EE Headquarters is also conducted after shipments have occurred. These reviews focus primarily on licensed and license exception shipments, shipments bound for destinations of concern, and shipments of strategic commodities of proliferation concern. OEA receives microfilm copies of the actual SEDs and a computerized index of key data fields for every SED from the Census Bureau. OEA uses the index to produce a list of SEDs targeted for closer review. Following this review, OEA identifies SEDs that may indicate violations of the EAR and refers them to OEE. Over the past year, OEA referred 115 SEDs to OEE on the basis of these SED reviews.
Visa Application Review Program
EE initiated the Visa Application Review Program in 1990 to prevent unauthorized access to controlled technology or technical data by foreign nationals visiting the United States. Section 734.2(b)(1) of the EAR defines an "export" to include the release of technology or software to a foreign national in the United States (other than persons lawfully admitted for permanent residence in the United States). A release of technology to a foreign national is deemed to be an export to the home country of that person.
In FY 2000, EE restructured its Visa Application Review Program, developing new criteria and thresholds for evaluating incoming visa applications for targeting purposes. EE has narrowed its focus and is concentrating on specific products most often used in weapons of mass destruction projects. OEA's evaluation and analysis of visa application cable traffic involves preventive enforcement efforts such as recommending denial of certain visas, intelligence gathering, and the referral of enforcement leads to OEE's field offices for possible case development.
During FY 2000, OEA reviewed information on thousands of visa applications to detect and prevent possible EAR violations. Of these, 259 visa applications were referred to OEE's field offices for further investigation. In some instances, OEE special agents uncovered possible visa fraud on the part of the foreign applicant. These findings were forwarded to OEA and submitted to the State Department's Visa Fraud Unit for further investigation and action.
Macosia International Denied Export Privileges
On November 29, 1999, Commerce Department's Under Secretary for Export Administration issued an order affirming the recommended decision of the administrative law judge (ALJ) that imposed a seven-year denial of all export privileges against Macosia International, of Laredo, Texas. The ALJ found that Macosia had exported handcuffs and leg irons to Mexico without obtaining the validated export license required by the EAR. The investigation was conducted by OEE's Boston Field Office.
Lafayette Instrument Company, Inc. Penalized $10,000 to Settle Charges for Illegal Exports to the People's Republic of China
On December 8, 1999, the Commerce Department imposed a $10,000 civil penalty on Lafayette Instrument Company, Inc. (Lafayette), of Lafayette, Indiana, to settle allegations that it violated the terms of an export license. The Department alleged that, Lafayette, as licensee on a validated license, which authorized the export of U.S.-origin Factfinder polygraph machines to Hong Kong, but which prohibited the resale, transfer, or reexport of the polygraph machines without prior authorization from the U.S. Government, was responsible for contravention of the license provisions because the polygraph machines were transferred or reexported from Hong Kong to the People's Republic of China. The investigation was conducted by OEE's Chicago Field Office.
Gold Valley Technology Company Penalized $20,000 for Illegal Export to the People's Republic of China
On December 21, 1999, the Commerce Department imposed a $20,000 civil penalty on Gold Valley Technology Company (Gold Valley) to settle allegations that it violated a term of an export license involving a shipment of computers to the People's Republic of China. The Department alleged that, in September 1993, Gold Valley, located in Hong Kong, arranged for a shipment of computers to the People's Republic of China although it knew or had reason to know that it would violate a condition on the validated BXA license issued for the export. A portion of the penalty, $10,000, will be suspended for one year, then waived provided that as Gold Valley commits no violations during that time. The investigation was conducted by OEE's Herndon Field Office.
Two Hong Kong Companies and a New Jersey Company Penalized to Settle Charges of Export Violations
On December 22, 1999, the Department of Commerce imposed a $174,000 civil penalty and a five-year period of denial of export privileges on Hua Ko Electronics Co., Ltd., a Hong Kong company which had been denied export privileges, for ordering and receiving U.S.-origin goods in violation of its denial order. The Department alleged that, Hua Ko Electronics, a company denied all U.S. export privileges by Order dated November 29, 1989, ordered and received commodities exported from the United States, contrary to the terms of the Order. A portion of the civil penalty, $87,000, and the five-year denial period, will be suspended for five years, then waived provided that Hua Ko Electronics commits no violations of the EAR during the suspension period.
In a related matter, on the same date, the Department imposed a $38,500 civil penalty on Nanshing Color & Chemical Co., Ltd., also a Hong Kong company, for transferring U.S.-origin goods to Hua Ko Electronics Co. Ltd. The lesser civil penalty imposed was due in large part to Nanshing's cooperation in the investigation. A third company, General Chemical Corporation, of New Jersey, agreed to a $77,000 civil penalty to settle allegations that it exported U.S.-origin goods to Nanshing while knowing or having reason to know that Nanshing would transfer the goods to Hua Ko Electronics Co. Ltd. The investigation was conducted by OEE's Herndon Field Office.
Houghton International, Inc. Penalized $150,000 to Settle Charges of Unlawful Exports of Chemicals
On February 28, 2000, the Commerce Department imposed a $150,000 civil penalty on Houghton International, Inc., of Valley Forge, Pennsylvania, to settle allegations that the company illegally exported chemicals in violation of the EAR. The Department alleged that, on 20 separate occasions between August 1994 and August 1996, Houghton International, Inc. a manufacturer of specialty chemical products, exported chemicals to South Korea without the required export licenses. The investigation was conducted by OEE's New York Field Office.
Bayer Corporation Penalized $200,000 to Settle Charges for Unlicensed Exports
On March 1, 2000, the Commerce Department imposed a $200,000 civil penalty on Bayer Corporation, of Tarrytown, New York, to settle allegations that the company's Diagnostics Division exported U.S.-origin glucose and other reagents to various destinations. The Department alleged that, on 57 occasions between October 1994 and January 1997, Bayer Corporation exported glucose and other reagents from the United States to Hong Kong, Malaysia, Mexico, Singapore, South Africa, South Korea, and Taiwan, without obtaining the required export licenses. The Department also alleged that Bayer made false or misleading representations of material fact on an export control document. The U.S. government controls glucose and other reagents because of concerns that they may be used for chemical or biological weapons. The investigation was conducted by OEE's Herndon Field Office.
Ronald O. Brown Penalized to Settle Charges of Unlawful Exports to Russia
On March 2, 2000, the Department of Commerce imposed an $18,000 civil penalty and a three-year denial of export privileges on Ronald O. Brown, of Seattle, Washington, in connection with the unauthorized exports and attempted export of U.S.-origin shotguns to Russia. The Department alleged that Brown, individually and formerly doing business as Mirazh Limited, aided and abetted, on six occasions in 1994, in the export of shotguns to Russia without obtaining the required export licenses. The Department also alleged that Brown aided and abetted in the attempted export of one shotgun to Russia and, on two occasions, made false and misleading statements of material fact to a federal government agency. A portion of the civil penalty, $9,000, and the three-year denial period, will be suspended for three years, then waived provided that Brown commits no violations of the EAR during the suspension period. The investigation was conducted by OEE's San Jose Field Office.
LTX Corporation Penalized $15,000 for Allegedly Exporting to a Denied Person
On March 8, 2000, the Commerce Department imposed a $15,000 civil penalty on LTX Corporation, of Westwood, Massachusetts, to settle alleged violations of the EAR. The Department alleged that, in two separate shipments, one in 1995 and the other in 1996, LTX Corporation exported semiconductor test equipment to a Denied Person, Realtek Semiconductor Co., Ltd., Taipei, Taiwan, in violation of the EAR. Denied Persons are specific individuals or businesses that are prohibited from exporting or receiving exports of U.S.-origin goods. The investigation was conducted by OEE's Boston Field Office.
Guilty Plea for Illegal Exports to Libya and Sudan<
On March 9, 2000, International High Tech Marketing (IHTM), a Miami-based computer exporting company, pled guilty in the U.S. District Court, Southern District of Florida, Miami Division, to a criminal information charging the firm with five counts of violating IEEPA. The charges related to the illegal export of U.S.-origin computer equipment to Libya and Sudan, and making unlawful misrepresentations on export documents. The Court ordered the firm to pay a $250,000 criminal fine. The criminal information charged IHTM, a wholly-owned subsidiary of CHS Electronics, Inc., with two felony counts for illegally exporting computers and related items to Libya and Sudan, and three felony counts charging that the firm under-declared the value of export shipments thereby evading reporting requirements to the U.S. Government. The investigation was conducted by OEE's Miami Field Office.
California Freight Forwarder Penalized $20,000 to Settle Charges of Illegal Exports to the People's Republic of China
On March 20, 2000, the Commerce Department imposed a $20,000 civil penalty on U-Freight, Inc., a freight forwarder in South San Francisco, California, to settle allegations that the company arranged for a shipment of computers to the People's Republic of China (PRC), in violation of a condition on the Commerce export license. The Department alleged that, in September 1993,
U-Freight arranged for a shipment of Sun Microsystems computers to the PRC when it knew or had reason to know that the shipment was contrary to a condition on the export license. A portion of the penalty, $10,000, will be suspended for one year, then waived provided that U-Freight commits no violations of the EAR during the suspension period. The investigation was conducted by OEE's Herndon Field Office.
Haneflex Sales and Services Ltd, Penalized $20,000 to Settle Charges of Illegal Transfer
On April 11, 2000, the Commerce Department imposed a $20,000 civil penalty and a five-year period of denial on Haneflex Sales and Services Co. Ltd., a Hong Kong trading and distribution company, for alleged violations of the EAR. The Department alleged that, in January 1995, Haneflex sold and transferred U.S.-origin diffusion pumps to Shun Fat Metal and Iron Works in Hong Kong in violation of conditions of a license issued by BXA authorizing the export of the pumps to Haneflex in Hong Kong. The five-year denial period will be suspended for five years, then waived provided that Haneflex commits no violations of the EAR during the suspension period. The investigation was conducted by OEE's San Jose Field Office.
Illinois Tool Works, Inc. Penalized $142,000 to Settle Charges of Unlawful Exports of Chemical
On May 2, 2000, the Commerce Department imposed a $142,000 civil penalty on Illinois Tool Works, Inc. (ITW), of Glenview, Illinois, to settle allegations that the company illegally exported chemicals to Brazil in violation of the EAR. The Department alleged that, on seven separate occasions between March 1994 and October 1997, the Magnaflux Division of ITW exported U.S.-origin chemicals to Brazil without the required export licenses. The Department also alleged that Magnaflux made false or misleading statements on Shipper's Export Declarations (SEDs) or failed to prepare or maintain SEDs in connection with these exports. A portion of the civil penalty, $37,000, will be suspended for one year, then waived provided that ITW commits no violations of the EAR during the suspension period. The investigation was conducted by OEE's Chicago Field Office.
NEC Technologies, Inc. Penalized $25,000 to Settle Charges of Illegal Exports
On May 10, 2000, the Commerce Department imposed a $25,000 civil penalty on NEC Technologies, Inc. (NEC), of Itasca, Illinois, to settle allegations that NEC illegally shipped automated finger print identification systems to several countries in violation of the EAR. The Department alleged that, on five separate occasions in 1996, NEC exported U.S.-origin automated finger print identification systems, to Argentina, Peru, Singapore, South Africa and Taiwan, without obtaining the required export licenses. The Department also alleged that the company made false and misleading statements in connection with the exports. A portion of the penalty, $10,000, will be suspended for one year, then waived provided that the company commits no violations of the EAR during the suspension period. The investigation was conducted by OEE's Boston Field Office.
David Sheldon Boone Denied Export Privileges Following Conviction Under the Espionage Act
On June 13, 2000, the Commerce Department denied David Sheldon Boone all export privileges until February 26, 2009, pursuant to Section 11(h) of the EAA, based on his conviction under the Espionage Act. On February 26, 1999, Boone was convicted in the U.S. District Court for the Eastern District of Virginia for combining, conspiring, confederating and agreeing with other persons, both known and unknown, including officers of the Komitet Gosudarstvennoy Bezopasnosty (KGB), to knowingly and unlawfully communicate, deliver, and transmit, and attempt to communicate, deliver and transmit, documents and information to representatives and agents of a foreign government, specifically the U.S.S.R. and the Russian Federation, directly and indirectly, relating to the national defense of the United States.
Agreements Reached with Los Alamos and Lawrence Livermore National Laboratories in Export Investigations
On June 26, 2000, the Commerce Department reached agreements with Los Alamos National Laboratory (LANL), Los Alamos, New Mexico, and Lawrence Livermore National Laboratory (LLNL), Livermore, California, concerning alleged shipments of various commodities without the required authorization. The Department of Energy discovered that the labs may have made the unauthorized exports and brought the matter to the attention of the Department.
The Department alleged that LANL, on four occasions from 1994 to 1996, and LLNL, on one occasion in 1994, shipped commodities to Russia without obtaining the export licenses required under the EAR. The exports by LANL occurred under the Department of Energy Material Protection, Control and Accounting Program, designed to reduce the threat to U.S. national security posed by unsecured Russian weapons-usable nuclear material. The commodities consisted of devices for measuring nuclear material, a communications router, a 486 computer and a printer. The export by LLNL occurred under a separate lab-to-lab project.
The agreements require that LANL and LLNL conduct a joint teach-learn seminar with BXA on issues related to nuclear non-proliferation; conduct audits of past export transactions to certain countries and report the results to OEE; and insure continued training of National lab personnel on issues related to export controls in their strategic business planning. In addition, the Department of Energy agreed to assign personnel to BXA, on a temporary duty basis to provide basic technical support on nuclear matters and to provide high-level security clearances to OEE special agents. These investigations were conducted by OEE's Los Angeles and San Jose Field Offices.
EMC Corporation Penalized $13,000 to Settle Charges of Export Control Violations
On August 3, 2000, the Commerce Department imposed a $13,000 civil penalty on EMC Corporation on behalf of its Data General Division (formerly the Data General Corporation), Westboro, Massachusetts. The Department alleged that, Data General exported computer equipment to Israel in 1995 without the required authorization. The Department also alleged that Data General made a false statement on an export control document related to the shipment of computer equipment to Mexico. The investigation was conducted by OEE's Boston Field Office.
Expeditors International of Washington, Inc. Penalized to Settle Charges of Illegal Exports<
On August 9, 2000, the Commerce Department imposed a $5,000 civil penalty on Expeditors International of Washington, Inc., through its San Francisco office, for facilitating the export of U.S.-origin equipment to a Denied Person. The Department alleged that, Expeditors International, in 1995, facilitated the export of semiconductor test equipment from the United States to Taiwan. The export was destined to a Denied Person, Realtek Semiconductor Co., Ltd., of Taipei, Taiwan. It is a violation of the EAR for a person to take any action that facilitates the acquisition by a denied person, of any item subject to the Regulations. The investigation was conducted by OEE's Boston Field Office.
Federal Express Corporation Penalized $15,000 to Settle Charges of Illegal Exports
On August 10, 2000, the Commerce Department imposed a $15,000 civil penalty on Federal Express Corporation, of Memphis, Tennessee, to settle alleged violations of the EAR. The Department alleged that Federal Express, in 1996, facilitated the export of semiconductor equipment from the United States to Taiwan. The export was destined to a Denied Person, Realtek Semiconductor Co., Ltd., of Taipei, Taiwan. The Department also alleged that, Federal Express failed to maintain a proper record of the transaction. A person or company may not participate, directly, or indirectly, in an export-related transaction subject to the EAR with a Denied Person. The investigation was conducted by OEE's Boston Field Office.
S.R. Traffic Service, Inc. Penalized 10,000 to Settle Charges of Export Control Violations
On August 11, 2000, the Commerce Department imposed a $10,000 civil penalty on S. R. Traffic Service, Inc., of Laredo, Texas, for alleged exports to Mexico in violation of the EAR. The Department alleged that, on two separate occasions between February 1995 and March 1995, S.R. Traffic Service, Inc. acted on behalf of a foreign buyer, PPG Industries de Mexico, S.A. de C.V., to export U.S.-origin potassium fluoride from the United States to Mexico without the required Commerce licenses. The investigation was conducted by OEE's Chicago Field Office.
Dexin International, Inc. Penalized for Illegal Exports to the People's Republic of China
On August 18, 2000, the Commerce Department imposed a $50,000 civil penalty on Dexin International, Inc., of West Covina, California, to settle alleged violations of the EAR involving shipments to the People's Republic of China (PRC). The Department alleged that, on two separate occasions in 1994 and 1995, Dexin International, Inc., exported thermal video systems to the PRC without obtaining the export licenses it knew or had reason to know were required under the EAR. The Department also alleged that, the company made a false and misleading statement of material fact on an export control document filed with the U.S. government in connection with one export. A portion of the penalty, $35,000, will be suspended for one year, then waived provided that the company commits no violations of the EAR during the suspension period. The investigation was conducted by OEE's San Jose Field Office.
Guilty Plea for Illegal Exports to Iran
On August 23, 2000, a U.S. District Court judge in Atlanta sentenced two Georgia men each to imprisonment for six months, home confinement for 150 days, and supervised release for one year, and ordered their firm to pay a $250,000 criminal fine for violating U.S. restrictions on exporting to Iran and making false statements. On May 8, Federal Parts International, Inc. located in Norcross, Georgia, pled guilty to conspiracy to violate the U.S. embargo to Iran. The firm's owner, Mehdi (Michael) Azarin, a resident of Atlanta, and the firm's manager, Farhad Azarin, of Norcross, Georgia, both pled guilty to charges of making false statements to federal investigators. After President Clinton imposed comprehensive sanctions on Iran in May 1995, Federal Parts conspired to export automobile and jeep parts valued at approximately $600,000 to Iran using an intermediary in Germany. The exports to Iran stopped in April 1996 when Export Enforcement agents executed a search warrant at Federal Parts offices in Norcross, and initiated the seizure of two pending shipments valued at $225,000. The investigation was conducted by OEE's Miami Field Office.
Earl Edwin Pitts Denied Export Privileges Following Conviction Under the Espionage Act
On August 29, 2000, the Commerce Department denied Earl Edwin Pitts all export privileges until June 23, 2007, pursuant to Section 11(h) of the EAA, based on his conviction under the Espionage Act. On June 23, 1997, Pitts was convicted in the U.S. District Court for the Eastern District of Virginia for combining, conspiring, confederating and agreeing with other persons, both known and unknown to the Grand Jury, including officers of the Komitet Gosudarstvennoy Bezopasnosty (KGB) and the Sluzhba Vneshney Rasvedi Rossi, to knowingly and unlawfully communicate, deliver, and transmit information to the then Union of Soviet Socialist Republic, and attempt to communicate, deliver and transmit, documents directly and indirectly to the Russian Federation relating to the national defense of the United States.
Peter H. Lee Denied Export Privileges Following Conviction Under the Espionage Act
On August 29, 2000, the Commerce Department denied Peter H. Lee all export privileges until March 26, 2006, pursuant to Section 11(h) of the EAA, based on his conviction under the Espionage Act. On March 26, 1998, Lee was convicted in the U.S. District Court for the Central District of California for attempting to communicate information relating to the national defense of the United States to a person not entitled to receive it, namely an agent of the People's Republic of China (PRC), with reason to believe the information could be used to the advantage of the PRC.
Hitech Lasers Ltd. Penalized $10,000 to Settle Illegal Export Charge
On September 20, 2000, the Commerce Department imposed a $10,000 civil penalty on Hitech Lasers Ltd., of Pretoria, South Africa, to settle allegations that the company violated a condition imposed under an export license involving a U.S.-origin laser system. The Department alleged that Hitech, contrary to a condition on the export license that authorized the export of the laser system to it in South Africa, installed the laser system in a nuclear facility in South Africa. A portion of the penalty, $5,000, will be suspended for one year, then waived provided that Hitech commits no violations of the EAR during the suspension period. The investigation was conducted by OEE's San Jose Field Office.
Trijicon, Inc. Penalized $64,000 for Charges of Illegal Export
On September 29, 2000, the Commerce Department imposed a $64,000 civil penalty on Trijicon, Inc., of Wixom, Michigan, to settle allegations that it illegally exported U.S.-origin optical sighting devices for firearms in violation of the EAR. The Department alleged that, on three separate occasions between October 1994 and January 1995, Trijicon, Inc. exported U.S.-origin optical sighting devices for firearms from the United States to Argentina and South Africa without the licenses that it knew were required by the EAR. A portion of the penalty, $19,500, will be suspended for one year, then waived provided that Trijicon, Inc. commits no violations of the EAR during the suspension period. The investigation was conducted by OEE's Chicago Field Office.
McDonnell Douglas, China National Aero Technology Import and Export Corporation and others Indicted on Federal Charges for Making False and Misleading Statements in Connection with the Export of Machining Equipment to the People's Republic of China
On October 19, 1999, a federal grand jury in the District of Columbia returned a 16-count indictment against McDonnell Douglas Corporation and the China National Aero Technology Import and Export Corporation (CATIC), a People's Republic of China government-formed corporation in Beijing, China, for making false and misleading statements and material omissions in connection with McDonnell Douglas' export to CATIC in 1994 and 1995 of machining equipment used to build aircraft parts. Also charged in the indictment were three of CATIC's affiliates, CATIC/Supply, located in Beijing, and CATIC (USA), Inc., and TAL Industries, Inc., both located in El Monte, California; two Chinese nationals employed by CATIC, Hu Boru, and Yan Liren; Douglas Aircraft Company, a subsidiary of McDonnell Douglas Corporation, and Robert J. Hitt, who was the Director of the China Program Office at Douglas Aircraft Company. The indictment charges the corporate defendants with making false and misleading statements and material omissions to the Commerce Department in connection with export license applications in 1994 for the shipment to the People's Republic of China of 13 pieces of sophisticated machining equipment used in McDonnell Douglas' Columbus, Ohio plant. The indictment alleged that CATIC and its affiliates caused six of the 13 pieces of machinery to be diverted to an unauthorized factory in Nanchang, People's Republic of China. The grand jury also charged McDonnell Douglas with failing to inform the Commerce Department of, among other things, the military nature of CATIC's initial inquiry and the inspection of the equipment at the Columbus plant by Nanchang Aircraft Manufacturing Company officials. If convicted of the charges, the corporate defendants face an aggregate maximum criminal fine of approximately $10 million. The individuals face a maximum of five years of imprisonment and a $250,000 fine. The investigation was conducted jointly by OEE's Intelligence and Field Support Division and the U.S. Customs Service under the direction of the U.S. Attorney's Office for the District of Columbia.
Florida Businessman Sentenced for Illegal Export of Crime Control Equipment
On October 29, 1999, a U.S. District Court judge in Miami, Florida, sentenced Peter L. Appelbaum, president of the Miami firm Pacorp, Inc., to probation for five years and a $10,000 criminal fine for violating the Arms Export Control Act and IEEPA. Appelbaum pled guilty on August 17 to charges that he illegally exported crime control equipment to Honduras without the required Commerce and State Department licenses. The items exported by Appelbaum included night vision equipment controlled under the International Traffic in Arms Regulations; and handcuffs, shackles, fingerprint powders and dyes controlled under the EAR. The investigation was conducted jointly by OEE's Miami Field Office and the U.S. Customs Service.
Abdulamir Mahdi Sentenced for Illegal Exports to Iran and Iraq
On November 19, 1999, a U.S. District Court judge in Orlando, Florida, sentenced Abdulamir Mahdi, a Canadian businessman, to imprisonment for 51 months, supervised release for three years and a $7,500 criminal fine for violating U.S. export controls restricting trade with Iran and Iraq. Mahdi, an Iraqi national, pled guilty on August 24, 1999, to an indictment charging him with conspiracy to violate IEEPA and the EAR. Mahdi used two Toronto companies, OTS Refining Equipment Corporation and Tech-Link Development Corporation, to buy U.S.-origin oil-field and industrial equipment for diversion to Iran and Iraq. The investigation was conducted by OEE's Miami Field Office and the U.S. Customs Service.
Collin Xu, Yi Yao and Lion Photonics Indicted on Charges in Connection with Illegal Export to the People's Republic of China
On December 14, 1999, a federal grand jury in the U.S. District Court of Massachusetts in Boston returned a superseding indictment charging Collin Xu, also known as Collin Shu and Zhihong Xu, Yi Yao, also known as Yao Yi, Lion Photonics, Canada, Inc., of Montreal, Canada, and Lion Photonics, Inc., of Beijing, People's Republic of China (PRC), with knowingly and willfully making a false statement and representation to the U.S. government in connection with the export of fiber optic gyroscopes to the PRC. Xu, Yao, Lion Photonics, Canada, Inc. and Lion Photonics, Inc. were indicted on March 9, 1999, for conspiring to illegally export U.S.-origin fiber optic gyroscopes to the PRC via Canada without the required U.S. government authorization. Yao and Xu have been arrested on charges related to the indictment and are currently in custody pending trial. The investigation was conducted by OEE's Boston Field Office, the Royal Canadian Mounted Police and the U.S. Customs Service.
Three Sentenced and Denied Export Privileges for Illegal Export of Military Vehicles Parts to Vietnam
On October 20, 1999, the U.S. District Court for the Western District of Louisiana in Lafayette, sentenced Son Kim Nguyen to three months home confinement, two years probation, and a $100 special assessment fee for violating the EAR. On January 26, 2000, the court sentenced Dien Duc Huynh to imprisonment for 41 months, supervised release for three years and a $550 special assessment fee. On the same date, Huynh's corporation was sentenced to a $3,000 criminal fine with a $2,200 special assessment fee. A U.S. District Court jury found Huynh and Dien's Auto Salvage, Inc. guilty of violating the EAA, the Trading with the Enemy Act, and of conspiracy to commit theft of government property in connection with the illegal export of military surplus vehicles and vehicle parts to Vietnam. Following his conviction, Huynh agreed to plead guilty to two forfeiture counts, and to pay the government $250,000 in lieu of forfeiting his property to the government. Nguyen, a co-conspirator charged in a related criminal action, pled guilty to charges of exporting military vehicles and vehicle parts to Vietnam without the required Commerce Department authorization. In related administrative actions, the Commerce Department denied the export privileges of Huynh and Dien's Auto Salvage, Inc. until January 2010 and Nguyen until October 20, 2004, pursuant to Section 11(h) of the EAA. The vehicles are controlled for national security, antiterrorism, and regional stability reasons. The investigation was conducted jointly by OEE's Dallas Field Office, the U.S. Customs Service and the Department of Defense.
Immunostics, Inc. Sentenced for Making False Statements
On February 14, 2000, a U.S. District Court judge in Newark, New Jersey, sentenced Immunostics Inc. to probation for five years and a $60,000 criminal fine for knowingly and willfully making false statements and representations to the U.S. government on export control documents. Immunostics, a manufacturer and exporter of medical test equipment, had pled guilty to charges that, between January 1993 and June 1997, the company prepared and submitted false export control documents in connection with its exports to foreign customers. The investigation was conducted jointly by OEE's New York Field Office and the U.S. Customs Service.
A & C International Trade, Inc. and Yufeng Wang Penalized in Connection with Illegal Export of Riot Control Vehicle with a Pressurized Pepper Gas System to the People's Republic of China
On March 10, 2000, A & C International Trade, Inc., of New York, New York and Yufeng Wang, also known as Alan Wang, the company's president, pled guilty in the U.S. District Court for the District of Columbia to violating U.S. export control laws and making a false statement related to the shipment of a riot control vehicle equipped with a pressurized pepper gas system to the People's Republic of China. A &C International entered a plea of guilty to an information charging it with a violation for the export and Wang entered a plea of guilty to a separate count of the information charging him with filing a false document in connection with the export. The court ordered the company to pay a $5,000 criminal fine and was placed on probation for a three-year period. Wang was sentenced to a prison term of time already served, supervised release for one year and 250 hours of community service. In a related administrative action, the Commerce Department ordered A & C International to pay a $20,000 civil penalty and denied its export privileges for three years. The denial period will be suspended for three years, then waived provided that the company commits no violation of the EAR for the suspension period. The investigation was conducted jointly by OEE's Boston Field Office and the U.S. Customs Service.
Texas Company, Officers and Affiliates Indicted and Denied Export Privileges for Exports to Libya
On April 26, 2000, a federal grand jury in the U.S. District Court of the Southern District of Texas, Houston Division, returned a thirty-nine-count indictment charging Jerry Vernon Ford, Preston John Engebretson, Thane-Coat, Inc., Thane-Coat International Company, Limited also known as TIC, Limited, also known as TIC, Ltd., TAM, Limited, and Eshbach, Limited, with conspiracy, unauthorized exports to Libya, false statements, money laundering and criminal forfeiture for their involvement in illegal shipments of U.S.-origin goods to Libya.
On October 13, 1999, April 10, 2000, and September 21, 2000, BXA's Assistant Secretary for Export Enforcement renewed for additional 180 days a temporary denial order against Thane-Coat, Inc., Jerry Vernon Ford, and Preston John Engebretson. The denial order revokes all export privileges for items exported or to be exported from the U.S. to the United Kingdom, the Bahamas, Libya, Cuba, Iraq, North Korea, Iran and any other country or countries that may subject in the future to a general trade embargo. In addition, at least 14 days in advance of any export that any of the denied persons intend to make of any item from the United States to any destination worldwide, the denied person will provide to BXA notice of the intended export, copies of all documents reasonably related to subject transactions, and the opportunity during the 14-day notice period to physically inspect the item at issue.
The original temporary denial order was issued in May 1997 and was subsequently renewed, based on the Department's reason to believe that, between 1994 and 1996, the respondents employed a scheme to export U.S.-origin products from the United States, through the United Kingdom or Italy, to Libya, a country subject to a comprehensive economic sanctions program, without the required authorization. The investigation is being conducted jointly by OEE's Dallas Field Office and the U.S. Customs Service.
Andrew E. Pietkiewicz Pleads Guilty to Making False Statements
On June 26, 2000, Andrew E. Pietkiewicz, also known as Andrzej E. Pietkiewicz, pled guilty in the U.S. District Court for the District of Columbia to knowingly and willfully making a false statement and representation to the U.S. government on a U.S. Customs Service Customs Declaration. Commerce agents had arrested Pietkiewicz in March 2000 for defaulting on a portion of a $25,000 civil penalty imposed against him in an Order dated November 4, 1993, issued under the EAA. On September 21, 2000, the court sentenced Pietkiewicz to probation for a two-year period and a $5,000 criminal fine. To resolve the administrative matter, on the same date, the Department ordered Pietkiewicz to pay a $11,000 civil penalty and denied his export privileges for a period of ten years, to be suspended, provided he pays the $18,500 still due under the November 4, 1993 Order within one year and not commit any other violations of the EAR. The investigation was conducted jointly by OEE's Boston Field Office and the U.S. Customs Service.
Microtek International Development Systems Division, Inc. and Joe-Pin Ouyang Penalized for Attempted Illegal Export of Computer Emulators to Iran
On June 22, 2000, the U.S. District Court in Portland, Oregon, sentenced Microtek International Inc., Development Systems Division, Inc., of Hillsboro, Oregon, to probation for five years and a $100,000 criminal fine and its president, Joe-Pin Ouyang, to imprisonment for five months, home detention for five months, supervised release for three years and a $3,000 criminal fine for the attempted illegal export of computer emulators to Iran. Microtek and Ouyang also forfeited $75,125 and emulators with component parts to the United States. On December 14, 1999, Microtek pled guilty to attempting an illegal export to Iran. On the same date, Ouyang pled guilty to making false statements to a federal agency. The investigation was conducted jointly by OEE's San Jose Field Office and the U.S. Customs Service.
Summit United Industries, Inc. Denied Export Privileges following Conviction for Illegal Export to Libya
On August 29, 2000, the Commerce Department denied the export privileges of Summit United Industries, Inc. (Summit), of Houston, Texas, until August 18, 2004, pursuant to Section 11(h) of the EAA. On August 18, 1999, Summit was convicted in the U.S. District Court in the Southern District of Texas, Houston Division, for aiding and abetting United States persons and others known and unknown to the United States Attorney of knowingly and willfully exporting, and causing to be exported oilfield equipment to Waha, located in Tripoli, Libya, in violation of IEEPA. The investigation was conducted jointly by OEE's Dallas Field Office and the U.S. Customs Service
Denial of Export Privileges Following Conviction in Cuba Embargo Case
On September 11, 2000, the Commerce Department denied Miami businessman Oscar Osman, president of Antilliana Trading Corporation, all export privileges until September 23, 2006, pursuant to Section 11(h) of the EAA. On September 23, 1999, Osman was convicted in the U.S. District Court for the Southern District of Florida for violating the EAA by exporting and causing to be exported U.S.-origin goods to Cuba. The investigation was conducted by OEE's Miami Field Office and the U.S. Customs Service.
Yuri Montgomery Denied Export Privileges Following Conviction for Illegal Exports of U.S.-Origin Commodities to Macedonia and Slovenia
On September 11, 2000, the Commerce Department denied Yuri Montgomery, also known as Yuri I. Malinkovski, of Olympia, Washington, all export privileges until January 22, 2009, pursuant to Section 11(h) of the EAA. On January 22, 1999, Montgomery was convicted in the U.S. District Court for the District of Columbia of violating IEEPA by knowingly and willfully exporting and causing to be exported various U.S.-origin crime control items to Macedonia and Slovenia without the required export licenses. The investigation was conducted by OEE's Boston Field Office and the U.S. Customs Service.
Optical Associates, Inc. Pleads Guilty to Illegal Export to India
On September 20, 2000, Optical Associates, Inc., of Milpitas, California, pled guilty in the U.S. District Court in the Northern District of California to the charge that the company illegally exported a mask aligner and related parts, in violation of the EAR, to the State Bank of India with knowledge that the end-user would be Bhaba Atomic Research Center (BARC), a prohibited entity in India. The mask aligner is controlled by the Department for antiterrorism under the EAR. BARC is a division of the Department of Atomic Energy of the Government of India. Unlicensed exports to BARC have been prohibited since June 30, 1997. The plea was the result of a joint investigation conducted by OEE's San Jose Field Office and the U.S. Customs Service.
| Indictment/ |
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|---|---|---|---|---|
| 10/19/99 | China National Aero-Technology Import and Export Corporation (CATIC), CATIC National Supply Company, CATIC (USA), Inc., TAL Industries, Inc, Yan Liren, Hu Boru, McDonnell Douglas Corporation, Douglas Aircraft Company, and Robert J. Hitt | False and misleading statements in connection with the export of various machining equipment to the People's Republic of China. | Commerce/ Customs |
Trial pending. |
| 12/14/99 | Collin Xu, a.k.a. Collin Shu and Zhihong Xu, Yi Yao, a.k.a. Yao Yi, Lion Photonics, Inc., and Lion Photonics, Canada, Inc. | Knowingly and willfully making a false statement and representation to the U.S. government in connection with the export of fiber optic gyroscopes to the People's Republic of China. | Commerce/ Customs |
Trial pending. |
| 12/14/99 | Microtek International Development Systems Division, Inc. and Joe-Pin Ouyang | Attempted illegal export of computer emulators to Iran and false statements in connection with the export. | Commerce/ Customs |
Microtek received a $100,000 fine and five years of probation. Ouyang received a $3,000 fine, a five-month term of imprisonment, five months of home detention and three years of supervised release. Microtek and Ouyang forfeited $75,125 and emulators with component parts. |
| 1/14/00 | A & C International Trade, Inc. and Yufeng Wang, a.k.a. Alan Wang | Illegal export of riot control vehicle equipped with a pressurized pepper gas system to the People's Republic of China and false statements in connection with the export. | Commerce/ Customs |
A & C International and Wang were convicted on 3/10/00. A & C International received a $5,000 fine and three years of probation. Wang received a prison term of time already served, one year of supervised release and 250 hours of community service. |
| 3/9/00 | International High Tech Marketing, Inc. | Illegal exports of computers and related items to Libya and Sudan and false statements in connection with the exports. | Commerce | International High Tech was convicted on 3/27/00. International High Tech received a $250,000 fine. |
| 4/26/00 | Jerry Vernon Ford, Preston John Engerbretson, Thane-Coat, Inc., Thane-Coat International Company, Limited, a.k.a. TIC, Limited and Tam, Limited, and Eshbach Limited | Conspiracy to illegally export pipe coating and related products to Libya and false statements in connection with the exports. | Commerce/ Customs |
Trial pending. |
| 6/15/00 | Andrew E. Pietkiewicz, a.k.a. Andrzej E. Pietkiewicz | False statements | Commerce | Pietkiewicz was convicted on 6/26/00. He received a $5,000 fine and two years of probation. |
| 7/24/00 | Optical Associates, Inc. | Illegal export of a mask aligner and related parts to prohibited end-user in India. | Commerce/ Customs |
Guilty plea on 9/20/00. Awaiting sentencing. |
Microtek and Ouyang were both indicted in FY 2000 on 6/24/99. Microtek subsequently pled guilty on 12/14/00. Ouyang waived the indictment and consented to the filing of the information on 12/14/00.
In April of 2002 the Bureau of Export Administration (BXA) changed its name to the Bureau of Industry and Security(BIS). For historical purposes we have not changed the references to BXA in the legacy documents found in the Archived Press and Public Information.