Taiwan Firm and California-Based Affiliate Settle Allegations Regarding Conspiracy to Violate the Export Administration Regulations

WASHINGTON, D.C. –The Commerce Department’s Bureau of Industry and Security (BIS) announced today that Well Being Enterprise Co., Ltd. of Taiwan has agreed to a twenty-year denial of export privileges for items on the Commerce Control List (CCL) and a $250,000 civil penalty to settle allegations that it committed twenty-five violations of the Export Administration Regulations (EAR) related to the unlicensed export of chemicals and metals from the United States to Taiwan.  The various items, including nickel powder, hafnium, zirconium, and bismuth, are controlled under the EAR for Nuclear Proliferation reasons

In three related cases, San Francisco-based Elecmat, Inc. has agreed to a twenty-year denial of export privileges, Hui-Fen Chen, a Well Being employee, has agreed to a twenty-year denial of export privileges for items on the CCL, and Theresa Chang, Elecmat’s former manger, has agreed to a two-year denial of export privileges for items on the CCL.

"Individuals who devise schemes and willfully circumvent U.S. export controls warrant having their export privileges suspended," said Kevin Delli-Colli, Acting Assistant Secretary of Commerce for Export Enforcement.  "This case demonstrates that domestic sales of controlled items to persons with no technical understanding of the product should be considered a red-flag."

BIS alleged that between 2003 and 2006, Well Being, Elecmat, Chen, and Chang engaged in a conspiracy to violate the EAR wherein on Well Being’s request, Elecmat procured controlled items from U.S. suppliers to be shipped to Elecmat in San Francisco.  Elecmat procured these items for export to Well Being in Taiwan, but disguised the fact that the items were intended for export to Taiwan so that its U.S. suppliers would not require that export licenses be obtained.

In addition, BIS alleged that Well Being took action to evade the EAR and on 23 occasions commanded or induced the doing of an action prohibited by the EAR.  With respect to Elecmat, BIS also alleged that the company on 19 occasions acted with knowledge that violations of the EAR were occurring and on 19 occasions made unlicensed exports to Taiwan.  BIS further alleged that Chang acted with knowledge that a violation of the EAR was occurring on one occasion, and that she made a false or misleading statement to BIS during the course of an investigation.

The denial orders imposed against Well Being, Chen and Chang prohibit them from participating in, or benefiting from, any transaction involving the export of an item listed on the CCL.  The denial order imposed against Elecmat prohibits it from participating in, or benefiting from, any transaction involving the export of all items subject to the EAR.  .  BIS has agreed to suspend $220,000 of Well Being’s fine, provided that, in the next five years, no additional violations occur. 

Prior to this settlement, Chang pleaded guilty to making a false statement to the Office of Export Enforcement in connection with the investigation, and was sentenced to three years’ probation and a $5,000 criminal fine.

Background

BIS controls the export and re-export of dual-use commodities, technology, and software for reasons of national security, foreign policy, nuclear nonproliferation, chemical and biological weapons nonproliferation, regional stability, and short supply.  Criminal penalties and administrative sanctions can be imposed for violations of the EAR.  For more information, please visit http://www.bis.doc.gov.

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