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Inadequate Oversight of Export Coordinator Cited in $500,000 Fine for Illegal Exports

Posted January 06, 2014

The Bureau of Industry and Security has entered into a settlement agreement with Amplifier Research Corporation (“AR”) of Souderton, Pennsylvania that will pay a $500,000 civil penalty to settle charges that it committed 50 violations of the Export Administration Regulations by exporting U.S.-origin amplifiers controlled for national security reasons to end users in China, India, Russia, Hong Kong, Singapore, Malaysia, Taiwan, Korea and Thailand without the required export licenses.
Legally Binding
The fine however is being suspended for two years and will be waived entirely if during that probationary period the company commits no further export violations. The company will also be required to complete an external audit of its export controls compliance program. If the company does not complete the audit and submit the results to BIS within 15 months its export privileges may be suspended for a year.

The unlicensed exports occurred at least in part as a result of AR’s failure to maintain adequate oversight over its export coordinator. The export coordinator, who simultaneously served as AR’s shipping manager at the time, was responsible for determining with the amplifiers required export licenses from BIS to the various destinations and for obtaining an such licenses. He was also charged with any necessary licenses from the State Department’s Directorate of Defense Trade Controls (“DDTC”) and served as the company’s Empowered Official for purposes of compliance with the International Traffic in Arms Regulations.

Between August 2006 and June 2011, AR obtained only 5 export licenses from BIS for controlled items and made 50 unlicensed exports. In an interview conducted by BIS’s Office of Export Enforcement, the export coordinator admitted that he had routinely approved items for export on the basis of license applications AR had submitted to BIS, including ones that were returned without action for failure to include necessary information, rather than waiting to receive the required export licenses.

Until he was removed from his position in June 2011, the export coordinator was the sole AR employee who had access to the electronic license application systems of BIS and DDTC. AR did not perform any internal or external audits of its export control compliance procedures during the more than 3 year time period involved.

Additionally, the export coordinator was shown to have made false statements on shipping invoices, typing in false license numbers and in some cases redacting licensing classification, end use/user information from the shipping invoices. BIS charged that in light of its contemporaneous experience with applying for and receiving licenses and commodity classifications for the goods in question, as well as its licensing history with BIS, the company knew or had reason to know that export licenses were required for the violative shipments.

Sources: STR Trade Report | U.S. Department of Commerce