Suntek Microwave, Inc. and
Company President Settle Charges of Illegal Exports

The U.S. Department of Commerce today announced that to settle charges of illegal exports in violation of the Export Administration Regulations (EAR), Suntek Microwave, Inc. (Suntek) of Newark, California, agreed to a $275,000 civil penalty and a 20-year denial of export privileges, and that Charlie Kuan (Kuan), former President of Suntek, agreed to a $187,000 civil penalty and a 20-year denial of export privileges. Because Kuan is unemployed and Suntek is no longer in operation, BIS agreed to suspend the monetary part of the civil penalty.

In related criminal cases, on April 26, 2004, Suntek pled guilty in the Northern District of California to violating the EAR and was fined over $339,000. Kuan pled guilty on September 23, 2002, and is awaiting sentencing. This global settlement represents the first criminal conviction of a deemed export case. The “deemed export” provision of the EAR states that an export license is required to release technology to a foreign national in the United States if a license would be required to export that technology to his/her home country. Assistant Secretary for Export Enforcement Julie L. Myers stated: “The first criminal conviction in a technology transfer context is a significant milestone in focusing and educating exporters on deemed export issues.”

The Commerce Department’s Bureau of Industry and Security (BIS) charged that, between 1996 and 2000, Suntek, under the direction of Mr. Kuan, failed to obtain the required export licenses for shipments of detector log video amplifiers (DLVA) to the People’s Republic of China (PRC). DLVA’s have military applications that include radar, missile, and satellite communications. BIS charged that, in 1997, Suntek knowingly made false statements to BIS on a license application by supplying false end-user information in order to obtain export authorization to ship DLVAs to the PRC, and that Kuan falsely certified to the truth of these statements.

BIS also charged that, from 1996 to 2000, Suntek failed to obtain export licenses under the “deemed export” provisions of the EAR for Chinese nationals who worked at Suntek and were trained in DLVA manufacturing technology controlled by the EAR. Suntek, at the direction of Mr. Kuan, trained Chinese nationals to manufacture controlled DLVAs for the express purpose of transferring the manufacturing technology to Suntek’s primary shareholder, Chengdu Jeway Microwave Telecommunications Co., Ltd., a company known to have been controlled by the PRC government.

Assistant Secretary Myers commended BIS’s San Jose Field Office and Special Agent Charles Sheridan of the New York Field Office for their efforts in the investigation.