An Export Oversight and $500,000 Fine
Mistakes, oversights and human errors are unfortunately part of everyday life. An inadequate, uneducated or extremely busy export coordinator can spring at any moment and in your own company.
The real questions are: “Where is your freight forwarder when these things happen?” and “Does your Logistics department have an international partner to help your company avoid situations like one the mentioned in the STR Trade Report below?”
Friday, January 03, 2014 Sandler, Travis & Rosenberg Trade Report
The Bureau of Industry and Security has entered into a settlement agreement with a Pennsylvania company that will pay a $500,000 civil penalty to settle charges that it committed 51 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. However, this fine 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.
BIS states that the unlicensed exports at issue occurred at least in part as a result of the company’s failure to maintain adequate oversight of its export coordinator, who admitted that he had routinely approved items for export on the basis of license applications submitted to BIS (including those returned without action for failure to include necessary information) rather than waiting to receive any required export licenses. Until he was removed from his position this official was the sole company employee who had access to the electronic export license application systems for BIS and the State Department’s Directorate of Defense Trade Controls. BIS also notes that the company did not perform any internal or external audits of its export control compliance procedures during the time period the violative transactions occurred.
BIS charged that in light of its contemporaneous experience with applying for and receiving licenses and commodity classifications for items classified under ECCN 3A001, 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. Moreover, in connection with certain charges, the company took actions to conceal or falsify the items’ classification and other licensing-related information, conduct that BIS states demonstrates the company knew or had reason to know of the applicable export licensing requirements.
At Scarbrough International, Ltd. we take export compliance very seriously, as we do our partnership with our customers.
We see ourselves as an extension of our customers. We take a very active role in protecting you and making your responsibilities our priorities. Our training department is continually adding education programs to inform all of our employees. We want to ensure we do everything we can do to be compliant –not only to do our job right but to aide you, our customers in doing the right thing too. This in turn will help you prevent from making mistakes.
So what happens when we receive a shipment we find suspicious? We ask questions! We do research! We call! We talk to our customers and push them in the right direction. We have regulatory experts on staff to field questions, arrange audits and offer consulting services too. We want to make sure you are being compliant too. Do you need a helping hand ? Give us a call if you have any questions and if there is anything we can do to assist in your exports. You don’t have to do this alone!
I welcome you to contact me directly!
Arijana B. Hoormann, Director of Export Compliance, Scarbrough International, Ltd.