BIS Nails Mid and High Level Company Officials (But Not Export Administrator) in Addition to Company

By: Danielle McClellan

Quote of the day not to make in writing prior to violating the EAR:  “if we follow the rules…we have to stop sales.”

Be warned.  That recent promotion, in addition to giving you a nice office and a raise,  makes you a more likely target of BIS penalties when BIS nails your company for export compliance violations.   Two officials of Streit found out the hard way that BIS is happy to penalize mid-level and higher company officials while not going after lower level export administrators.

Gurman Goutorov, chairman, chief executive officer, and sole/majority owner of the Streit Group entities (Streit Middle East, Streit USA Armoring LLC (Streit USA), and Streit Group FZE) has been fined $250,000 for the unlawful reexports of armored vehicles. Streit USA’s vice president, Eric Carlson, was fined $50,000 for his involvement with Goutorov. Streit USA Armoring, LLC was penalized $1.6 million and Streit Group FZE and Streit Group FSCO were fined $850,000. All parties involved above have also been debarred for 3 years beginning on September 1, 2015.

These violations begin with an approved BIS license for the reexport of US-origin vehicles that were retrofitted with ballistic steel and bullet proof glass (ECCN 9A018). The vehicles were exported to Streit Middle East (located in UAE) by Streit USA pursuant to a BIS License dated December 7, 2007. The license stated that Streit Middle East was designated as the authorized intermediate and ultimate consignee and specified the maximum number of armored vehicles that could be exported. The license also included a condition that the vehicles could not be resold, transferred or reexported without US government approval. Goutorov was aware of this license condition.

In July 2009 (the license expired December 31, 2009) the Streit USA’s export licensing coordinator sent out an email  asking that a “Streit USA Armoring End User Request Form” be completed and read:

“Please provide the following information to Streit USA Armoring for submission to the DOC (Department of Commerce), and wait for approval prior to any sale, transfer, or reexport of US produced armored SUVs. Only after approval has been given, in writing, to Streit USA Armoring from the DOC for an approved sale, may the sale proceed.”

Not long after this email, the export licensing coordinator sent another email stating that there were no exceptions to this condition.

In August 2009, Streit Group FZE reexported 8 armored vehicles to Iraq. The Streit USA’s export licensing coordinator once again reiterated via email to Goutorov, as well as to Eric Carlson, Streit USA’s Vice-President, and to Streit Group FZE’s director of sales and marketing that, “The license states that the resale/reexport of these vehicles must be approved by the Department of Commerce in the USA.” The export licensing coordinator applied for a reexport license for the transaction but it had not yet been approved as of August 2009. Streit Group FZE’s director of sales and marketing replied to Carlson and Goutorov via email, “Eric, Guerman – if we follow the rules…we have to stop sales.”

A few days after the sale to Iraq, Streit Middle East reexported two armored vehicles to Nigeria and then in September 2009 Streit Group FZE reexported a vehicle to the Philippines. In September 2009 Streit Group FZE contracted for the sale of 4 vehicles for reexport to Singapore. Finally on November 2009, Streit Middle East reexported six of the vehicles to the Philippines.

At no time was US government authorization ever obtained for any of the above transactions which is why the companies, along with Goutorov, have been debarred for 3 years and fined over million dollars amongst them.

Charging letter: http://efoia.bis.doc.gov/index.php/electronic-foia/index-of-documents/7-electronic-foia/227-export-violations

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