Archive for 2017

OFAC Investigating Smartphone Company…Were They Working with ZTE?

Thursday, May 11th, 2017 by Danielle McClellan

By: Danielle McClellan

Huawei, one of the world’s biggest sellers of smartphones and the back-end equipment that makes cellular networks work has received an administrative subpoena from the United States Treasury Department’s Office of Foreign Assets Control (OFAC).  This subpoena was sent out in December 2016, following the Department of Commerce’s subpoena which was sent out in the summer of 2016 asking for the company to describe technology and services provided to Cuba, Iran, Sudan, and Syria over the past 5 years. North Korea was named in the Commerce Department subpoena, but not the OFAC subpoena. At this point Huawei has not been accused of any wrong doing and the subpoenas do not indicate that the company is part of any criminal investigations.

Not long ago the Chinese company, ZTE agreed to pay $1.2 billion after pleading guilty to shipping US-origin items to Iran (http://www.learnexportcompliance.com/News/The-Export-Control-Update-March-2017.aspx#ZTE). That investigation released documents that showed ZTE executives mapping out plans to work around, or break, US export control regulations. Further investigation found that ZTE learned about the plan from a company labeled as, F7, which closely mimics Huawei. Last month, ten members of Congress sent a letter demanding that F7 be publically identified and fully investigated, “We strongly support holding F7 accountable should the government conclude that unlawful behavior occurred,” read part of the letter.

It’s uncertain if the government believes that Huawei is F7 and that’s why the subpoenas were sent out or if they are just probing for other violations. Only time will tell.

More information: https://www.nytimes.com/2017/04/26/business/huawei-investigation-sanctions-subpoena.html?_r=0

Changes for the Implementation of the International Trade Data System

Thursday, May 11th, 2017 by Danielle McClellan

After consideration of the comments received, the Census Bureau revised and added certain provisions to address the concerns of commenters and to clarify the requirements related to the implementation of the International Trade Data System (ITDS). These changes will be effective July 18, 2017. The changes made in this Final Rule are as follows:

  • Amend the proposed rule to remove the definition and filing requirement for the used electronics indicator.
  • Section 30.1(c) is amended to revise the definition of ‘‘Carrier’’ to include a Non Vessel Operating Common Carrier (NVOCC) as an example of a carrier because the Automated Export System Trade Interface Requirements allows the Standard Carrier Alpha Code of a NVOCC to be reported.
  • Section 30.1(c), is amended to add the definition of ‘‘U.S. Postal Service customs declaration form’’ to identify the shipment document used for exports by mail.
  • Section 30.1(c), is amended to revise the definition of ‘‘Commercial loading document’’ to include the U.S. Postal Service customs declaration form as an example of a commercial loading document.
  • The note to § 30.2(a)(1)(iv) is amended to add Country Group E:2 to ensure consistency with the Export Administration Regulations (EAR).
  • Section 30.2(c) is amended to clarify the application and certification process by dividing the section based on the filing method, AESDirect or methods other than AESDirect. As a result, the title was amended to read as ‘‘Application and Certification Process’’ as opposed to ‘‘Certification and Filing Requirements.’’
  • Section 30.3(e)(2) is amended to add language requiring the authorized agent to provide the filer name in addition to the Internal Transaction Number (ITN) and date of export as proposed in the NPRM, when requested by the U.S. Principal Party in Interest in a routed transaction.
  • Section 30.4(b)(2)(v) is amended to read ‘‘mail’’ rather than ‘‘mail cargo’’ and the phrase ‘‘filing citation or exemption legend’’ will be revised to read ‘‘proof of filing citation, postdeparture filing citation, AES downtime filing citation, exemption or exclusion legend.’’
  • Section 30.8(a) is amended to more accurately reflect U.S. Postal Service operations.
  • Section 30.16(d) is amended to add Country Group E:2 to ensure consistency with the EAR.
  • Section 30.28 is amended to add language removed from 30.28(c) to the opening paragraph.
  • Section 30.29(a)(2) is amended by clarifying that a license value is only required to be reported for shipments licensed by a U.S. Government agency.
  • Section 30.29(b)(2) is amended to replace the term ‘‘commercial document’’ with the defined term ‘‘commercial loading documents’’.
  • Section 30.37(y) is amended to add Country Group E:2 to ensure consistency with the EAR.
  • Delete Appendices B, C, E and F because the Appendices were initially created to assist the trade in transitioning from the Foreign Trade Statistics Regulations (FTSR) to the FTR and are no longer necessary. As a result of deleting Appendices B, C, E, and F, Appendix D is redesignated as Appendix B. Program Requirements In addition to the above changes the Census Bureau is amending relevant sections of the FTR in order to comply with the requirements of the Foreign Relations Act, Public Law 107–228. The following sections of the FTR are amended to revise or clarify export reporting requirements and are unchanged from the Notice of Proposed Rulemaking of March 9, 2016, titled Foreign Trade Regulations: Clarification on Filing Requirements (RIN 0607– AA55):
  • In § 30.1(c), revise the definition of ‘‘AES applicant’’ to remove the text ‘‘applies to the Census Bureau for authorization to’’ and ‘‘or its related applications’’ because the registration will no longer go through the Census Bureau. Rather, the registration will be submitted to CBP through its Web site or through ACE and will be processed by CBP. In addition, related applications will be eliminated.
  • In § 30.1(c), revise the definition of ‘‘AESDirect’’ to clarify the appropriate parties that can transmit Electronic Export Information (EEI) through the AES, clarify that all regulatory requirements pertaining to the AES also apply to AESDirect, and eliminate the reference to the URL.
  • In § 30.1(c), revise the definition of ‘‘AES downtime filing citation’’ to remove filing requirements from the definition.
  • In § 30.1(c), remove the definition of ‘‘AES participant application (APA)’’ because the APA is no longer used for filers to obtain access to the AES.
  • In § 30.1(c), revise the definition of ‘‘Annotation’’ to remove the word ‘‘placed’’ to eliminate the implication of a manual process and add ‘‘or electronic equivalent’’ to allow for an electronic process.
  • In § 30.1(c), add the definition of ‘‘Automated Commercial Environment (ACE)’’ to identify the system through which the trade community reports data.
  • In § 30.1(c), revise the definition of ‘‘Automated Export System (AES)’’ to clarify that AES is accessed through the Automated Commercial Environment.
  • In § 30.1(c), revise the definition of ‘‘Bill of lading (BL)’’ to distinguish between the responsibilities of the carrier and the authorized agent.
  • In § 30.1(c), revise the definition of ‘‘Container’’ to make the language consistent with Article 1 of the Customs Convention on Containers.
  • In §30.1(c), remove the definition of ‘‘Domestic exports’’ because this term is not used in the FTR and add the definition of ‘‘Domestic goods.’’
  • In § 30.1(c), revise the definition of ‘‘Electronic Export Information (EEI)’’ to reference the Shipper’s Export Declaration itself as opposed to the information collected on the SED.
  • In § 30.1(c), revise the definition ‘‘Fatal error message’’ by removing the following sentence to remove the regulatory requirements from the definition: ‘‘The filer is required to immediately correct the problem, correct the data, and retransmit the EEI.’’
  • In § 30.1(c), revise the term ‘‘Filers’’ to ‘‘Filer’’ and revise the definition to reduce redundancy.
  • In § 30.1(c), remove the definition of ‘‘Foreign exports’’ because this term is not used in the FTR and add the definition of ‘‘Foreign goods.’’
  • In § 30.1(c), remove the definition for ‘‘Non Vessel Operating Common Carrier (NVOCC)’’ because the term is not referenced in the FTR.
  • In § 30.1(c), revise the definition of ‘‘Proof of filing citation’’ by removing the word ‘‘placed’’ to eliminate the implication of a manual process and allow for an electronic process.
  • In § 30.1(c), remove the definition of ‘‘Reexport’’ because the term is not used for statistical purposes in the FTR.
  • In § 30.1(c), revise the definition of ‘‘Service center’’ to clarify the role of a service center as it pertains to the FTR.
  • In § 30.1(c), revise the term ‘‘Shipment reference number’’ to read as ‘‘Shipment Reference Number (SRN).’’
  • In § 30.1(c), revise the definition of ‘‘Split shipment’’ to incorporate the revised timeframes addressed in FTR Letter #6, Notice of Regulatory Change for Split Shipments.
  • In § 30.1(c), revise the term ‘‘Transportation reference number’’ to read as ‘‘Transportation Reference Number (TRN).’’
  • Revise § 30.2(a)(1)(iv)(A) to ensure consistency with the Department of Commerce, Bureau of Industry and Security regulations.
  • Revise § 30.2(a)(1)(iv)(C) to add language which notes that the filer must reference the Department of State regulations for exceptions to the filing requirements for goods subject to the ITAR.
  • Revise § 30.2(b)(3) to remove the reference to ‘‘30.4(b)(3)’’ and add ‘‘30.4(b)(4)’’ in its place.
  • Revise § 30.3(e)(2) to add paragraph (xv) ‘‘Ultimate consignee type’’ to clarify that the authorized agent is responsible for reporting the ultimate consignee type in a routed export transaction.
  • Revise § 30.4(b)(2)(v) to reference only mail shipments by removing the words ‘‘and cargo shipped by other modes, except pipelines’’ because all other modes are covered in paragraph (vi). In addition, revise language to replace ‘‘exporting carrier’’ with ‘‘U.S. Postal Service’’ and remove the reference to § 30.46 because pipeline language has been added to § 30.4(c)(2).
  • Revise § 30.4(b)(3) to indicate that the USPPI or authorized agent must provide the proof of filing citation, post departure filing citation, AES downtime citation, exemption or exclusion legend to the carrier.
  • Revise § 30.4(c) by removing the introductory text.
  • Revise § 30.4 by adding paragraphs (c)(1) to address current post departure filing procedures and (c)(2) to address pipeline filing procedures.
  • Revise the title of § 30.5 to be ‘‘Electronic Export Information filing processes and standards’’ to accurately reflect the information that remains in this section because the AES application and certification process are removed.
  • Revise § 30.5 to remove the introductory text and remove and reserve paragraphs (a) and (b) because the certification process is now addressed in § 30.2(c).
  • Remove § 30.5(d)(3) to remove outdated requirements.
  • Revise § 30.5(f) to amend outdated information.
  • In § 30.6, revise the introductory text to add language indicating that additional elements collected in ITDS are mandated by the regulations of other federal government agencies.
  • Revise § 30.6(a)(1) to include the definition of the USPPI for consistency with the format for other data elements.
  • Revise § 30.6(a)(1)(iii) to clarify the use of an Employer Identification Number (EIN) and include the Data Universal Numbering System (DUNS) number as an acceptable USPPI ID number.
  • Revise § 30.6(a)(1)(iv) to clarify whose contact information should be provided in the AES for the USPPI.
  • Revise § 30.6(a)(5)(i) to clarify the country of ultimate destination to be reported with respect to shipments under BIS and State Department export licenses.
  • Revise § 30.6(a)(5)(ii) and add paragraphs (A) through (C) to clarify the country of ultimate destination to be reported with respect to shipments not moving under an export license.
  • Revise § 30.6(a)(11) by removing paragraphs (i) and (ii) because domestic goods and foreign goods are now included in § 30.1(c) as definitions.
  • Revise § 30.6(a)(19) to conform with the revised term ‘‘Shipment Reference Number (SRN).’’
  • Revise the title of § 30.6(b)(14) to conform with the revised term ‘‘Transportation Reference Number (TRN).’’
  • Revise § 30.6(c) to add paragraph (3) to include the original ITN field. Adding the original ITN field will assist the export trade community and enforcement agencies in identifying that a filer completed the mandatory filing requirements for the original shipment and any additional shipment(s).
  • Remove § 30.10(a)(1) and (2) because the electronic certification notice is no longer provided.
  • In § 30.28, revise the introductory text to incorporate the revised timeframes addressed in FTR Letter #6, Notice of Regulatory Change for Split Shipments.
  • Revise § 30.28(a) to allow for an electronic process and incorporate the revised timeframes.
  • Revise § 30.28 by removing paragraph (c) because this information is included in the introductory text.
  • Revise § 30.29(a)(1) to remove the phrase ‘‘non-USML goods’’ and add the phrase ‘‘goods not licensed by a U.S. Government agency and not subject to the ITAR’’ in its place.
  • Revise § 30.29(a)(2) to remove the phrase ‘‘USML goods’’ and add the phrase ‘‘goods licensed by a U.S. Government agency or subject to the ITAR’’ in its place.
  • Revise § 30.29(b)(2) to remove the phrase ‘‘non-USML’’ and add the phrase ‘‘goods not licensed by a U.S. Government agency in its place.
  • Revise §30.29(b)(2) to remove the phase ‘‘USML shipments’’ and add the phrase ‘‘goods licensed by a U.S. Government agency in its place.
  • Revise § 30.36(b)(4) to ensure consistency with the Export Administration Regulations.
  • Revise the titles to Subpart E and § 30.45, revise paragraphs 30.45(a), (a)(1) and (b), remove and reserve paragraph 30.45(a)(2) and (a)(3), and remove 30.45(c) through 30.45(f) to ensure consistency with the CBP regulations.
  • Revise § 30.46 through 30.49 by removing and reserving these sections.
  • Revise the introductory text in § 30.50 to replace ‘‘Automated Broker Interface (ABI)’’ with ‘‘Automated Commercial Environment (ACE)’’.
  • Revise the introductory text in § 30.53 to provide more detail for classifying goods temporarily imported for repair and remove paragraphs 30.53(a) and 30.53(b).
  • Revise § 30.74 paragraph (c)(5) to indicate the new division name and revise the address.
  • Redesignate Appendix D as Appendix B. Revise the title to read ‘‘Appendix B to Part 30—AES Filing Citation, Exemption and Exclusion Legends’’ and remove ‘‘I. USML Proof of Filing Citation’’, ‘‘XII. Proof of filing citations by pipeline’’, and renumber remaining entries.
  • Revise new Appendix B numbers III and IV to clarify the dates listed in the examples are the dates of export.
  • Remove Appendices C through F because they are no longer needed to help transition the trade community from the Foreign Trade Statistics Regulations to the Foreign Trade Regulations.

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2017-04-19/pdf/2017-07646.pdf

Pay the Government on Time…or Pay Even Sooner

Thursday, May 11th, 2017 by Danielle McClellan

By: Danielle McClellan

In September 2015, Streit USA Armoring, LLC entered into a Settlement Agreement with the Bureau of Industry and Security (BIS) that imposed a civil penalty of $1.6 million ($850 million in installment payments and $750,000 suspended). The company violated the regulations after it reexported armored vehicles to Iraq, Nigeria, and the Philippines. Full article available at http://learnexportcompliance.bluekeyblogs.com/2015/10/01/bis-nails-mid-and-high-level-company-officials-but-not-export-administrator-in-addition-to-company/.

During settlement negotiations Streit USA specifically sought for the ability to pay the $850,000 in installment payment of $170,000. Under this plan, the company was required to make all payments on time; it was found that their November 2016 payment was not made in a timely fashion so the Final Order has been amended to move the due date forward for the final two remaining payments. Streit USA will now owe its final payment son May 2017 and September 2017 compared to the original June 2017 and January 2018.

Amended Order: https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2015/1111-e2498/file

Rosoboronexport Added to Nonproliferation Act by State

Thursday, May 11th, 2017 by Danielle McClellan

On March 21, 2017, the Department of State applied the measures authorized in Section 3 of the Iran, North Korea, and Syria Nonproliferation Act against Rosoboronexport (ROE) (Russia) and any successor, sub-unit, or subsidiary thereof. The measures below will remain in place for two years from the effective date unless the Secretary of State determines otherwise.

Rosoboronexport accounts for more than 90% of Russia’s annual arms sales and India is their major client, other leading clients include China, Algeria, Syria, Vietnam, Venezuela and recently Iraq.

Section 3 of the Act, imposes the following measures against Rosoboronexport:

  1. No department or agency of the United States Government may procure or enter into any contract for the procurement of any goods, technology, or services from this foreign person, except to the extent that the Secretary of State otherwise may determine. This measure shall not apply to subcontracts at any tier with ROE and any successor, sub-unit, or subsidiary thereof made on behalf of the United States Government for goods, technology, and services for the maintenance, repair, overhaul, or sustainment of Mi-17 helicopters for the purpose of providing assistance to the security forces of Afghanistan, as well as for the purpose of combating terrorism and violent extremism globally. Moreover, the ban on U.S. government procurement from the Russian entity Rosoboronexport (ROE) and any successor, sub-unit, or subsidiary thereof shall not apply to United States Government procurement of goods, technology, and services for the purchase, maintenance, or sustainment of the Digital Electro Optical Sensor OSDCAM4060 to improve the U.S. ability to monitor and verify Russia’s Open Skies Treaty compliance. Such subcontracts include the purchase of spare parts, supplies, and related services for these purposes;
  2. 2. No department or agency of the United States Government may provide any assistance to this foreign person, and this person shall not be eligible to participate in any assistance program of the United States Government, except to the extent that the Secretary of State otherwise may determine;
  3. No United States Government sales to this foreign person of any item on the United States Munitions List are permitted, and all sales to this person of any defense articles, defense services, or design and construction services under the Arms Export Control Act are terminated; and;
  4. No new individual licenses shall be granted for the transfer to this foreign person of items the export of which is controlled under the Export Administration Act of 1979 or the Export Administration Regulations, and any existing such licenses are suspended.

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2017-03-29/pdf/2017-06224.pdf

U.S. Administration Exempts DDTC from Limit on New Regulations

Thursday, May 11th, 2017 by Danielle McClellan

Mr. Brian Nilsson, Deputy Assistant Secretary of State for Defense Trade Controls, stated at the public meeting of the Defense Trade Advisory Group (DTAG) today in Washington, DC, that DDTC is exempt from the Administration’s limit on new regulations, so plans are continuing to issue new or revised regulations this year for the following subjects:

  • Defense services
  • Public domain
  • Technical data
  • Fundamental research
  • ITAR 126.4 exemption
  • US persons abroad – registration and licensing requirements

DDTC welcomes public suggestions for amendments of the International Traffic in Arms Regulations, and for DDTC operations such as the website format, and agency training and outreach. Submit them to DDTCResponseTeam@state.gov.

Chinese National Pleads Guilty to Attempting to Export “Bananas”

Thursday, May 11th, 2017 by Danielle McClellan

By: Danielle McClellan

For the past 6 years, 53 year old Fuyi Sun has attempted to purchase carbon fiber for the Chinese military (according to court records). A few years ago Sun contacted what he thought was a US company that distributed carbon fiber, but was, in fact, an undercover entity created by Homeland Security Investigations (HSI) and staffed by undercover agents. The company, “UC Company,” was asked by Sun to supply M60 Carbon Fiber which is a high-grade carbon fiber that is used in sophisticated aerospace and defense applications, specifically for drones and other government defense applications. M60 Carbon Fiber requires a license for export to China for nuclear non-proliferation and anti-terrorism reasons.

During the course of the relationship between UC Company and Sun, he often suggested various security measures they should take to make sure they would both remain protected from the “U.S. Intelligence.” He instructed the undercover agents to use the word “banana” instead of “carbon fiber” in all communications…he inquired about purchasing 450 kilograms of banana in one email. He also instructed agents to remove identifying barcodes for the carbon fiber, prior to transshipment,  and instructed them to identify it as “acrylic fiber” in customs documentation.

On April 11, 2016, Sun traveled from China to New York to purchase the M60 Carbon Fiber from UC Company. On April 11th and 12th Sun met with undercover agents and suggested to them that the Chinese military was the ultimate end-user for the carbon fiber, he also explained that he personally worked in the Chinese missile program. He further asserted that he had a close relationship with the Chinese military, and would be supplying the M60 Carbon Fiber to the Chinese military or to institutions closely associated with it. He agreed to purchase two cases of the carbon fiber on the 12th from UC Company and provided them with $23,000 in cash for the carbon fiber and then provided an additional $2,000 as compensation for the risk that he believed they were taking to illegally export the carbon fiber to China without a license. Sun was arrested the next day.

Sun pled guilty to attempting to violate the International Emergency Economic Powers Act (IEEPA), which carries a maximum sentence of 20 years in prison. The maximum sentence in this case will be prescribed by Congress. Sun will be sentenced on July 26, 2017.

Details: https://www.justice.gov/opa/pr/chinese-national-pleads-guilty-attempting-illegally-export-high-grade-carbon-fiber-china

Exporting to Hong Kong? Don’t Forget Your Written Proof for Hong Kong!

Thursday, May 11th, 2017 by Danielle McClellan

By: John Black

Effective April 19, 2017, the Bureau of Industry and Security (BIS) has new documentation requirements for export and reexports under licenses and license exceptions to and from Hong Kong.

BIS will  require persons planning on exporting and reexporting to Hong Kong any items subject to the Export Administration Regulations (EAR) and controlled on the Commerce Control List (CCL) for national security (NS), missile technology (MT), nuclear nonproliferation (NP column 1), or chemical and biological weapons (CB) reasons to obtain, prior to the export or reexport, a copy of a Hong Kong import license or a written statement from the Hong Kong Government that such a license is not required. The purpose of this change is to require that the Hong Kong Government issue an import license as an acknowledgement that sensitive EAR-controlled items are entering Hong Kong and as an agreement to prevent unauthorized reexport or transfer of those items to prohibited destinations. Interestingly, the prohibited destination that most concerns the US is the People’s Republic of China (PRC). The EAR treats Hong Kong as a separate “country” from the PRC even though the PRC, the United Nations, and nearly everybody else in the world considers Hong Kong to be part of the PRC because Hong Kong is part of the PRC.

Leaving behind the interesting point that the EAR treats Hong Kong as if it is not part of the PRC, there are a lot of details in this new rule. In addition what was described above, this rule will also require persons planning on reexporting from Hong Kong any item subject to the EAR and controlled for NS, MT, NP column 1, or CB reasons to obtain a Hong Kong export license or a statement from Hong Kong government that such a license is not required.

View full details of the rule at http://www.learnexportcompliance.com/News/The-Export-Control-Update-February-2017.aspx#EAR

BIS FAQs Related to Rule: https://bis.doc.gov/index.php/policy-guidance/foreign-import-export-license-requirements/hong-kong

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2017-01-19/pdf/2017-00446.pdf

Company Fined $162K for Antiboycott Violations

Thursday, March 30th, 2017 by Danielle McClellan

By: Danielle McClellan

The Office of Antiboycott Compliance, Bureau of Industry and Security (BIS) has charged Pelco Inc. (Pelco) with 66 violations. Between May 2011 and January 2016 it was found that on 32 occasions Pelco was engaged in transactions involving the sale/transfer of goods and services from the US to the United Arab Emirates and Kuwait, activities in the interstate or foreign commerce of the US (Section 760.1(d)). In connection with these transactions, Pelco, with intent to comply with, further supported an unsanctioned foreign boycott by agreeing to refuse to do business with another person (prohibited by Section 760.2(a)).

In addition to those 32 charges, Pelco was charged with 34 violations of “Failing to Report the Receipt of a Request to Engage in a Restrictive Trade Practice or Foreign Boycott Against a Country Friendly to the US” (Section 760.5). This is not surprising, a company who agrees to an illegal boycott is not likely to report said boycott.

Pelco will pay $162K to settle the violations and will not be debarred as long as the settlement amount it paid.

Charging Letter: https://efoia.bis.doc.gov/index.php/documents/antiboycott/alleged-antiboycott-violations-2015/1100-a749/file

BIS Extends Temporary General License for ZTE Corporations & ZTE Kangxun

Thursday, March 30th, 2017 by Danielle McClellan

On February 21, 2017 the Bureau of Industry and Security (BIS) extended a temporary general license that restored, for a specified time period, the licensing requirements and policies under the EAR for exports, reexports, and transfers (in-country) to ZTE Corporation and ZTE Kangxun that were added to the Entity List on March 8, 2016. The rule extends the general license to March 29, 2017.

Federal Register: https://www.gpo.gov/fdsys/search/pagedetails.action?granuleId=2017-03664&packageId=FR-2017-02-24&acCode=FR&collectionCode=FR

Florida Company Fined $27 Million for 150 Intentional EAR Violations

Thursday, March 30th, 2017 by Danielle McClellan

By: Danielle McClellan

Access USA Shipping, LLC (Access) of Sarasota, Florida was charged with 150 violations beginning in April 2011 and spanning to February 2013. The company went out of its way to conceal the fact that foreign customers were purchasing products through them without their US merchants knowing who the end users of their items were. Access mis-described, undervalued, and destroyed and/or altered export control documents to conceal the illegal exports. They also made sure that their foreign customers had a direct employee to order through to avoid any export scrutiny. They went as far as allowing foreign customers to send “wish lists” to Access employees who would then purchase the products from their US merchants with US credit cards and PayPal accounts in the name of Eric Baird, Access’s founder and then-owner and CEO or cards opened in the name of the employee making the order. The foreign customer would then reimburse Access or the employee; there were even situations when the shipments were delivered to the homes of Access employees to ensure that the US merchants would not become suspicious of the order and the end user.

Access also exported (or attempted to) items classified as ECCN 0A987 which are controlled for Crime Control reasons to Argentina, Austria, Hong Kong, Indonesia, Libya, South Africa, and Sweden without a BIS export license. It was also found that the company exported (or attempted to) items classified as ECCN 5A990 and controlled for anti-terrorism reasons as well as EAR99 items to Transsphere Oy, a company on the Entity List.

The company is ordered to pay $10 million right away and the other $17 million will be suspended for two years and waived if the company does not commit any violations during the two year probationary period.

Charging Letter: https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2015/1102-e2490/file