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On June 10, 1996, Under Secretary for Export Administration William Reinsch signed an opinion affirming an Administrative Law Judge's (ALJ) ruling in connection with the Commerce's Department's charges that Serfilco, Ltd., an Illinois commercial filtration and pumping equipment manufacturer, and its president, Jack H. Berg, committed 25 violations of the antiboycott provisions of the Export Administration Regulations. On December 7, 1995, the ALJ had upheld the Commerce Department's charges, and imposed a penalty of $118,000 on Serfilco, Ltd. and a separate $90,000 civil penalty on Berg. The ALJ also denied, for one year, each party's export privileges to Bahrain, Iraq, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, Syria, the United Arab Emirates, and the Republic of Yemen. Berg and Serfilco appealed the ALJ's December 7 ruling to the Under Secretary for Export Administration, resulting in his June 10 opinion.
In his initial decision and order, the ALJ found that, between January and July of 1989, Serfilco and Berg each violated the prohibition against furnishing business relationship information in responding to a boycott questionnaire from a distributor in Iraq. The ALJ further found that Serfilco failed to report to the Department its receipt, on seven separate occasions between November 1988 and April 1990, of boycott-related requests, as required by the Regulations.
Berg and Serfilco did not pay the civil penalties. At the request of the Commerce Department, the U.S. Department of Justice sued Berg and Serfilco in U.S. district court to collect the penalties. Berg and Serfilco settled the suit with the Justice Department prior to trial.
On August 29, 1995, Assistant Secretary for Export Enforcement John Despres signed orders approving settlements that imposed civil penalties totaling $1,446,400 on Parbel of Florida, Inc., formerly known as Helena Rubinstein, Inc., and Cosmair Inc., both subsidiaries of L'Oreal, S.A., the French cosmetic company, and Bruce L. Mishkin, for 291 alleged violations of the antiboycott provisions of the Export Administration Act and Regulations. The companies and Mishkin each agreed to pay the civil penalties in separate but related settlements with the Department, which, combined, constituted one of the largest for Export Enforcement's Office of Antiboycott Compliance (OAC).
Under the terms of the consent agreements, Parbel paid $1,387,000, Mr. Mishkin paid $50,400 and Cosmair paid $9,000. Parbel of Florida, Inc., located in Miami, Florida, is a subsidiary of L'Oreal, S.A., located in Clichy, France. At the time of settlement, Cosmair, Inc. was wholly-owned by L'Oreal, S.A., and is the U.S. distributor for that company. At the time of the settlement, Mr. Mishkin was associate corporate counsel for Cosmair, Inc. At the time of the alleged violations, Mr. Mishkin held that title, as well as the titles of Vice President, General Counsel, and Corporate Secretary of Helena Rubinstein, Inc., which was, in 1989, a L'Oreal-owned company that manufactured cosmetics and skin creams.
The Department alleged that, in 1989, in response to a request from L'Oreal, S.A., Helena Rubinstein, Inc. and Bruce Mishkin each furnished or agreed to furnish 144 items of information about Helena Rubinstein, Inc.'s business relationships with or in Israel. The Department also alleged that, on two separate occasions in 1989, Helena Rubinstein, Inc. failed to report its receipt of a boycott-related request concerning its business relationships with or in Israel. Finally, the Department alleged that Cosmair, Inc. did not prevent Mr. Mishkin, one of its employees, from furnishing information about Helena Rubinstein, Inc.'s business relationships with or in Israel. The Department alleged that, in so doing, Cosmair, Inc. violated the Regulations by permitting the doing of an act prohibited by the Regulations.
In March 1993, Baxter International Inc., a multinational manufacturer and distributor of hospital and medical supplies based in Deerfield, Illinois, two of its corporate affiliates and a corporate officer agreed to pay a total of $6,060,600 in civil penalties to settle allegations of violating the antiboycott regulations. The Department also imposed a denial of export privileges prohibiting Baxter, its affiliates, subsidiaries, and employees from entering into, negotiating, or extending contracts to export goods or technology to Syria and Saudi Arabia from March 1993 until March 1995. Baxter also pled guilty in U.S. District Court in Chicago to one felony count and was fined $500,000.