Archive for the ‘Denied & Restricted Parties’ Category

Beware of Contracts Signed by Specially Designated Nationals

Thursday, August 3rd, 2017 by Danielle McClellan

(Source: Commonwealth Trading Partners)

By: Chalinee Tinaves, Esq., Commonwealth Trading Partners, ctinaves@ctp-inc.com.

On July 20, 2017, the Office of the Foreign Assets Control (OFAC) announced a $2 million penalty against ExxonMobil Corporation and two of its subsidiaries for violating the Ukraine-Related Sanctions Regulations. According to OFAC, ExxonMobil violated the sanctions when its execs dealt in services with Igor Sechin, President of Rosneft OAO, when they signed eight legal documents relating to oil and gas projects in Russia between May 14, 2014, and May 23, 2014.

If you’ll travel back in time to March 2014, as tensions were heating up regarding Russian deployment of military forces in the Crimea region of Ukraine, President Obama issued Executive Order 13661, “Blocking Property of Additional Persons Contributing to the Situation in Ukraine,” in response to actions deemed to constitute an unusual and extraordinary threat to the national security and foreign policy of the U.S. Section 1(a)(ii) authorized the Secretary of the Treasury to designate officials of the Government of the Russian Federation, block any property or interests in property, and prohibit dealing in any property and interests in property of a person listed on the Specially Designated Nationals and Blocked Persons List (SDN List). Section 4 of E.O. 13661 prohibited US persons from making “any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order” as well as receiving “any contribution or provision of funds, goods, or services” from a designated person.

On April 28, 2014, OFAC designated Igor Sechin as an official of the Russian government, thereby generally prohibiting US persons from conducting transactions with him. Although Rosneft OAO is:

  • designated on the Sectoral Sanctions Identifications List (SSI List) pursuant to Executive Order 13662 “Blocking Property of Additional Persons Contributing to the Situation in Ukraine;”
  • subject to Directive 2 (prohibiting transacting in, providing financing for, or otherwise dealing in new debt of greater than 90 days maturity if that debt is issued on or after the sanctions effective date by, on behalf of, or for the benefit of the persons operating in Russia’s energy sector); and
  • subject to Directive 4 (prohibition against the direct or indirect provision of, exportation, or reexportation of goods, services, or technology in support of exploration or production for deepwater, Arctic offshore, or shale projects that have the potential to produce oil in the Russian Federation or in maritime area claimed by Russian Federation and extending from its Territory); nonetheless, Rosneft OAO is not designated on the SDN List and is therefore not subject to blocking sanctions.

As you can see, the conflict lies in how to conduct business transactions with an organization that is not blocked with an executive who is. According to the release, OFAC rejected ExxonMobil’s position that Sechin was acting in his professional capacity as President of Rosneft OAO when they signed the legal documents. Specifically, ExxonMobil referenced comments by a Treasury Department spokesman in April 2014 allowing BP Plc Chief Executive, Bob Dudley, to remain on the board of directors of Rosneft OAO so long as he did not discuss personal business with Sechin. In rejecting this argument, OFAC indicated that statement did not address ExxonMobil’s conduct nor did the plain language of Ukraine-Related Sanctions Regulations include a distinction between “personal” or “professional.” Further, OFAC has not interpreted the Regulations to create a carve-out for designated parties acting in their professional capacity.

Interestingly, in support of its position, OFAC pointed to its Frequently Asked Question #285 published on March 18, 2013, regarding the Burma Sanctions Program. Although conveniently now removed from OFAC’s FAQs and website following the termination of the Burma Sanctions Regulations, an archived link detailing FAQ #285 captured the full text of OFAC’s response to ministry dealings with a designated Burmese Government minister. According to OFAC:

A government ministry is not blocked solely because the minister heading it is an SDN. U.S. persons should, however, be cautious in dealings with the ministry to ensure that they are not, for example, entering into any contracts that are signed by the SDN.

However, in Treasury’s restatement of FAQ #285 in the ExxonMobil announcement, OFAC indicated that US parties should “be cautious in dealings with [a non-designated] entity to ensure that they are not providing funds, goods, or services to the SDN, for example, by entering into any contracts that are signed by the SDN.”

Rejecting ExxonMobil’s rebuttal that OFAC regulations state that different interpretations may exist among and between the sanctions programs that it administers, FAQ #285 “clearly signaled” that OFAC views the signing of a contract with an SDN as prohibited, even if the entity on whose behalf the SDN signed was not sanctioned in situations where sanctions programs also involve SDNs. These reasons, in addition to the definitions of “property” and “property interest” in the Ukraine-Related Sanctions Regulations, E.O. 13661, and statements issued by the White House and the Department of Treasury, served to provide ExxonMobil with notice that signing the legal documents with Sechin would violate the prohibitions in the Ukraine-Related Sanctions Regulations.

In assessing the penalty based on OFAC’s Economic Sanctions Enforcement Guidelines, among other aggravating factors, OFAC viewed ExxonMobil’s transaction to be a show of “reckless disregard for U.S. sanctions requirements when it failed to consider warning signs associated with dealing in the blocked services of an SDN” and contributed “significant harm” to the objectives of the Ukraine-Related Sanctions Program. Following the announcement, ExxonMobil stood by its position that it acted in full compliance with the sanctions guidelines in 2014 and argued that the Treasury Department is “trying to retroactively enforce a new interpretation of an executive order that is inconsistent with the explicit and unambiguous guidance from the White House and Treasury issued before the relevant conduct and still publicly available today.”

What does all this mean for U.S. companies? While FAQ #285 was initially crafted to address contracts with a designated government official (which Sechin satisfied based on his designation as a Russian official), it is unclear whether this interpretation would also be applicable in situations involving non-government SDNs and their corporate dealings. Further, the prohibited conduct of entering into a contract signed by an SDN in FAQ #285 was listed as an example. It is entirely possible that a range of other contract activities are prohibited by SDNs like negotiating a contract. Companies must be aware of the risks associated with projects that would require authorization by an SDN. Further, companies can mitigate their risk by screening all the parties involved in a transaction to avoid potentially violating a sanctions program.

Cryomech Charged for Illegal Export to Russian Company on Entity List

Wednesday, July 19th, 2017 by Danielle McClellan

By: Ashleigh Foor

Cryomech, Inc. of Syracuse, NY has received a charge involving its exports of  an LNP-20 Liquid Nitrogen Plant, an item classified as EAR99 in the EAR, from the United States to the All-Russian Scientific Research Institute of Experimental Physics (VNIIEF) a.k.a Russian Federal Nuclear Center-VNIIEF (RFNC-VNIIEF) in Sarov, Russia. Cryomech shipped this item, valued at $33,587, without the required BIS License on or around August 16, 2012. On June 9, 2017 the company received a civil penalty of $28,000 as well as an order to hire an unaffiliated third-party consultant with expertise in U.S. export control laws to complete an external audit of its entire export controls compliance program. Cryomech will not be debarred if penalty is paid and audit is completed with results submitted.

Settlement Documents: https://efoia.bis.doc.gov/index.php/documents/export-violations/export-violations-2015/1114-e2501/file

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

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

BIS Adds 23 Russian Entities to Entity List & Explains License Review Policy

Tuesday, January 31st, 2017 by Danielle McClellan

On December 27, 2016 the Bureau of Industry and Security published a final rule adding 23 Russian Entities to the Entity list and revises the licensing policy in three sections of part 742 of the EAR to clarify that BIS’s review of license applications for exports, reexports and transfers (in- country) to Russia.

BIS revised the CCL based controls sections of the EAR to clarify that it will review license applications to export or reexport to Russia items subject to the EAR and controlled for chemical and biological weapons proliferation (CB), nuclear nonproliferation (NP) or national security (NS) reasons under a presumption of denial, if the items proposed for export or reexport would make a direct and significant contribution to Russia’s military capabilities.

This final rules revises 742.2 and 742.3 of the EAR to clarify that license applications for items controlled for CB and NP reasons will be reviewed in accordance with the revised licensing policies in paragraph (b)(4) of both 742.2 and 742.3 and with the revised licensing policy in paragraph (b)(7) of 742.4 of the EAR. This rule revises 742.4(b)(7) of the EAR to clarify that license applications for items controlled for NS reasons will be reviewed under a presumption of denial if the items would make a direct and significant contribution to Russia’s military capabilities, including but not limited to, the major weapons systems described in Supplement No. 7 to part 742 of the EAR.

This final rule adds the following twenty-three entities to the Entity List:

Crimea Region of Ukraine:

  1. Crimean Ports, a.k.a., the following three aliases:
  • State Unitary Enterprise of the
  • Republic of Crimea ‘Crimean Ports’;
  • Sue RC ‘KMP’;
  • Sue RK ‘Crimean Ports’

28 Kirov Street, Kerch, Crimea Region of Ukraine 98312

 

  1.  Crimean Railway, a.k.a., the following three aliases:
  • Federal State Unitary Enterprise ‘Crimean Railway’;
  • Krymzhd;
  • The Railways of Crimea

34 Pavlenko Street, Simferopol, Crimea Region of Ukraine 95006.
Russia:

  1.  DJSC Factory Krasnoe Znamya, a.k.a., the following five aliases:
  • OJSC Factory Krasnoe Znamya;
  • OAO Zavod Krasnoe Znamya;
  • AO Krasnoye Znamya;
  • Krasnoye Znamya Plant OAO;
  • Krasnoye Znamya Plant JSC.

Shabulina Travel 2a, Ryazan, 390043, Russia

  1.  Ekran Scientific Research Institute, FSUE, a.k.a., the following one alias:
  • FGUP Ekran.

Kirov Avenue 24, Samara 443022, Russia; and Krzhizhanovskogo Street 20/30, Moscow, 117218, Russia;

  1. ElTom Research and Production Company, a.k.a., the following one alias:
  • NPP ElTom

Garshin Street 11, Tomilino, Lyuberetsky, Moscow, 140070, Russia

  1.  FSUE FNPC Nizhegorodsky Scientific Research Institute of Radiotechnics (NNIIRT),

Shaposhnikov Street 5, Nizhny Novgorod, 603950, Russia

  1.  Institut Stroiproekt, AO, a.k.a., the following six aliases:
  • Aktsionernoe Obshcestvo Institut Stroiproekt;
  • AO Institut Stroiproekt;
  • AO Institute Stroyproekt (f.k.a., Institut Stroiproekt Zakrytoe Aktsionernoe Obshchestvo);
  • Institute Stroyproect;
  • Stroyproekt;
  • Stroyproekt Engineering Group

D. 13 Korp. 2 LiteraA Prospekt Dunaiski, St. Petersburg 196158, Russia; and 13/2 Dunaisky Prospect, St. Petersburg 196158, Russia

  1. JSC GOZ Obukhov Plant, a.k.a., the following one alias:
  • GOZ Obukhov Plant

Prospekt Obukhovskoi Oboroni 120, Saint Petersburg, 192012, Russia

  1. JSC Institute of Instrumentation— Novosibirsk Plant Comintern (NPO NIIP–NZIK), Planetnaya Street 32, Novosibirsk, 630015, Russia
  2.  JSC Scientific Research Institute of Aircraft Equipment (NIIAO), a.k.a., the following three aliases:
  • SRIAE;
  • NIIAO;
  • Aviation Instrument Scientific Research Institute

Tupoleva 18, Zhukovsky, Moscow, 140182, Russia

  1.  Kaluga Scientific Research Radio Technology Institute (KRRTI), a.k.a., the following two aliases:
  • KNIRTI;
  • KRRTI

Lenin Street 2, Zhukov, Kaluga Oblast, 249192, Russia

  1.  Karst, OOO, a.k.a., the following four aliases:
  • Construction Holding Company Old City—Karst;
  • Karst Ltd.;
  • LLC Karst;
  • Obshcestvo S Ogranichennoi Otvetstvennostyu Karst

D. 4 Litera A Pomeshchenie 69 ul. Kapitanskaya, St. Petersburg 199397, Russiaand 4 Kapitanskaya Street, Unit A, Office 69–N, St. Petersburg 199397, Russia

  1. LLC Ruschemtrade, St. Mashinostroitelnyj, 3, Rostov-on- Don 344090, Russia; and 86/1, Temryuk, Krasnodar 353500, Russia
  2.  OAO All-Russia Research Institute of Radio Equipment (JSC VNIIRA), a.k.a., the following three aliases:
  • OJSC VNIIRA;
  • OAO All-Russia Research Institute of Radio Technology;
  • All-Russian Scientific Research Institute of Radio Equipment

Shkipersky Protok 19, V.I. St. Petersburg, 199106, Russia

  1.  OJSC Ural Production Company Vector (UPP Vector), a.k.a., the following two aliases:
  • JSC ‘SCP’ Vector;
  • JSC PPM Vector

Gagarin Street 28, Ekaterinburg, 620078, Russia

  1.  Olid Ltd., a.k.a., the following one alias:
  • OOO Solid

ul Mira 4, Novorossiysk, Krasnodarskiy kray 630024, Russia

  1.  Research and Production Association KVANT, a.k.a., the following one alias:
  • NPO Kvant

Bolshaya Saint Petersburg 73, Velikii- Novgorod 173003, Russia

  1.  Research and Production Association M.V. Frunze, a.k.a., the following two aliases:
  • NNPO Frunze;
  • NZIF

Gagarin Prospect 174, Nizhny Novgorod, 606950, Russia

  1.  Ryazan State Instrument Enterprise (RSIE), a.k.a., the following two aliases:
  • RSIE;
  • GRPZ

Seminarskaya Street 32, Ryazan, 390000, Russia

  1.  Scientific and Production Association ‘‘Lianozovo Electromechanical Plant’’ (NPO LEMZ), a.k.a., the following four aliases:
  • JSC LEMZ R&P Corporation;
  • OAO Design Bureau Lianozovsky Radars Moscow;
  • Lianozovsky Electromechanical factory;
  • OAO Design Bureau Lianozovsky

Radars Moscow. Dmitrovskoye Shosse 110, Moscow, 127411, Russia

  1.  Svyaz Design Bureau, OJSC, a.k.a., the following one alias:
  • KB Svyaz. Prospect Sokolova 96

Rostov-on-Don 344010, Russia

  1.  Trans-Flot JSC, a.k.a., the following one alias:
  • JSC Trans-Flot

ul Ventseka 1/97, Samara 443099, Russia

  1.  Transpetrochart Co. Ltd., Prospekt Engelsa 30, St. Petersburg 194156, Russia.

 

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2016-12-27/pdf/2016-31124.pdf

BIS Amends EAR Concerning Burma

Tuesday, January 31st, 2017 by Danielle McClellan

In Executive Order 13742 of October 7, 2016, President Obama terminated the national emergency declared in Executive Order 13047 and revoked that Executive Order and the five additional Burma-related Executive Orders, including Executive Orders 13310, 13448 and 13464. Consistent with the President’s action, in this final rule, BIS removes and reserves § 744.22 of the EAR.

Effective December 27, 2016, the Bureau of Industry and Security (BIS) has removed the license requirements and other restrictions on exports, reexports or transfers (in country) of items subject to the EAR made to person whose property and interests in property were blocked pursuant to three Burma-related Executive Orders  that were revoked on October 7, 2016. This rule also moves Burma from Country Group D:1 to Country Group B, a less restrictive country group placement.

Note, however, that Burma will remain in Country Group D:3 (countries raising proliferation concerns related to chemical and biological weapons). Burma will also remain in Country Group D:5 (U.S. Arms Embargoes), consistent with § 126.1 of the International Traffic in Arms Regulations, 22 CFR 120–130. Therefore, the country is subject to the general license exception restrictions described in section 740.2(a)(12) of the EAR that apply to 9×515 or ‘‘600 series’’ items destined to, shipped from, or manufactured in a destination listed in Country Group D:5, except as narrowly provided in subparagraphs (a)(12)(i) and (ii). Further, Burma will remain in Computer Tier 3 in part 740 (License Exceptions) pending additional consideration. Finally, as a general matter, exports and reexports to Burma, and transfers (in country), remain subject to EAR part 744 end user and end-use based controls.

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2016-12-27/pdf/2016-31208.pdf

Man Pleads Guilty to Stealing Sensitive Military Documents from United Technologies and Exporting Them to China

Tuesday, January 31st, 2017 by Danielle McClellan

By: Danielle McClellan

Yu Long, 38, a citizen of China and permanent resident of the US, plead guilty on December 19, 2016 to one count of conspiracy to engage in the theft of trade secrets as well as one count of unlawful export and attempted export of defense articles from the US. Long worked as a Senior Engineer/Scientist at United Technologies Research Center (UTRC) from May 2008 to May 2014 where he worked on F119 and F135 engines. During this time Long always intended to return to China to work on research projects at state-run universities in China using the knowledge and materials he was acquiring at UTRC. During 2013 and 2014, Long was recruited by Shenyang Institute of automation (SIA), of China, where he substantiated claims that he could provide documents from his work at UTRC and examples of projects on which he worked.

On May 30, 2014, Long left URTC and began travelling back and forth between the US and China with a UTRC external hard drive that he unlawfully retained after his employment ended. On November 7, 2014, Long was arrested, two days after he attempted to board a plane to China with sensitive, proprietary and export controlled documents from Rolls Royce, not URTC. His checked baggage was inspected by CBP officer in Newark, NJ, where the hard drive was found with all of the proprietary, export controlled information.

After his digital media was seized it was found that he had voluminous files protected by the ITAR and EAR, as well as files proprietary to UTRC, Pratt, and Rolls Royce. UTRC confirmed that the hard drive that he stole and accessed in China contained not only documents and data from projects long worked on, but also from projects that he did not work on. It was found that he obtained Pratt and Rolls Royce proprietary information from a project that the US Air Force had convened a consortium of major defense contractors to work together to see if they could collectively lower the costs of specific metals used.

A sentencing date has not been set but Long faces a maximum term of imprisonment for 15 years for the theft of trade secrets charge and 20 years of imprisonment for violated the Arms Export Act.

More Information: https://www.justice.gov/opa/pr/chinese-national-admits-stealing-sensitive-military-program-documents-united-technologies

Pakistani National Extradited and Sentenced to 33 Months in Prison for Conspiracy to Export Gyroscopes to Pakistan

Wednesday, October 12th, 2016 by Danielle McClellan

By: Danielle McClellan

Syed Vaqar Ashraf (71) of Lahore, Pakistan (also known as Vaqar A. Jaffrey) was sentenced to 33 months in prison after being extradited from Belgium on July 31, 2015. According to court documents, in June 2012 Ashraf began asking a Tucson-based company, who shall remain nameless, for price quotes for unmanned aerial vehicles (drones). The company specializes in the design, development, and manufacturing of drones for the US military. The company immediately tipped off Homeland Security Investigations (HIS) agents about Ashraf’s requests.  HSI quickly assigned special agents to work undercover as employees of the Tucson-based company and they began dialoging with Ashraf directly.

From June 2012 to August 2014, Ashraf negotiated with special agents. He represented himself as the head of I&E International, based in Lahore, Pakistan.  Most of the correspondence was done via email where he agreed to purchase 18 gyroscopes that were intended to help medium-sized drones fly longer distances as well as 10 optical receiver modules and laser diodes intended to be installed in the aircraft for approximately $440,000.

In September 2013, HSI agents met with Ashraf in Vienna, Austria to work out details regarding the sale. Ashraf explained during the meeting that Pakistan’s nuclear program had been developed using technology exported from the west without a license. This led the agents to believe that Ashraf was working for Pakistan’s Advanced Engineering Research Organization and the intended use for the electronics was for the Pakistani military UAV program.

From January to March 2014 Ashraf asked agents for suggestions to get around the US export controls after agents requested a license from the Commerce Department and were told that the items would require a special license because the optical receive modules could be used in “activities related to nuclear, chemical, or biological weapons or missile delivery systems.” Ashraf asked if there were any alternative descriptions that would appear to cover the items on documents, but would clear arms control hurdles from State and Commerce departments.  Secret agents offered Ashraf with a few different descriptions and asked him if the customer was aware that transaction was “being done without a license.” Ashraf told the agents that they (customer) were “absolutely aware of everything.” Later in an email, Ashraf wrote, “He (customer) is well aware that he cannot get these gyros in a normal way; he’s well aware of that.” The ultimate plan was to transship all of the items; they would be shipped to Pakistan through Belgium.

HIS agents met with Ashraf three more times in face-to-face meetings, including one in the US where they agreed on a series of wire transfers, including one for $67,000. On August 26, 2014 agents set up a final meeting with Ashraf in Belgium to deliver some of the technology. Before the meeting began Belgian police showed up and arrested Ashraf. A little less than a year later Ashraf was extradited to the US to face trial on charges of conspiracy to export defense controlled items without a license which he later pled guilty to.

Read more: https://www.justice.gov/opa/pr/pakistani-national-extradited-and-sentenced-attempting-export-sensitive-technology-pakistani

Middle Man in Illegal Exports Debarred for 8 Years

Tuesday, September 6th, 2016 by Danielle McClellan

By: Danielle McClellan

Walter Anders and his company Terand, Inc. (he was the sole employee) of Huntersville, NC has been debarred for 8 years for his connection in exporting carbon fiber to Singapore. Anders and his company were used as a middle man to send illegal exports from a company in Middlewtown, NY to a company in Singapore in exchange for multiple $1,400 kick backs.

In 2012, Performance Engineered Nonwovens, of Middletown, NY, was contacted by BIS and told that their license to export T300 carbon fiber (ECCN 1C210.a) to Singapore was revoked due to the concerns surrounding the recipient. Performance Engineered Nonwovens then sought out to find a way to conceal the shipments to Singapore, cue Walter Anders and Terand.  Within a few weeks Anders and the president of Performance Engineered Nonwovens, Peter Gromacki, agreed to have Terand falsely act as the US exporter of record for exports of the items to Singapore in return for a $1,400 commission for each successful export.

Terand created and issued commercial invoices on letterhead that falsely named Terand as the exporter and falsely stated that, “This commodity technology exported from the United States is in accordance with the Export administration Regulations.” The company also acted as the intermediary between Performance Engineered Nonwovens and the freight forwarder, providing instructions to the forwarder, signing any and all required shipping documents, and receiving status reports on the progress of exports to Singapore. Terand also appeared as the US Principal Party in Interest (USPPI) on all of the Shipper’s Export Declarations (SED) that were filed.

Over the course of 2012 Terand made 8 exports of T300 carbon fiber to Singapore (approximately 6,557kg). Gromacki (Performance Engineered Nonwovens president) ensured that this process would continue and told Walter Anders that, “You continue to play a crucial role. I cannot export without your help and hence the commission checks will continue to flow in your direction.”

Walter Anders and his company, Terand, have been charged with 8 counts of Causing, Aiding, and/or Abetting Unlicensed Exports. The 8 illegal exports were valued at $288,736, Anders received $11,200 in commissions and 8 years of debarment.

Federal Register: https://www.federalregister.gov/articles/2016/08/19/2016-19819/in-the-matter-of-walter-anders-10701-huntersville-commons-drive-suite-c-huntersville-nc-28078-terand