International Trade Law News

Published by Jacobson Burton Kelley PLLC

The U.S. Department of Commerce's Bureau of Industry and Security (BIS) today announced the settlement of two enforcement cases involving illegal exports.

In the first case, OSPECA Logistics Management, a Brownsville, Texas-based freight-forwarder and customs brokerage, agreed to pay a $60,000 civil penalty to settle charges that it exported certain chemicals that can be used as chemical weapons precursors to Mexico in violation of the Export Administration Regulations (EAR). BIS charged that, between November 30, 2001 and February 11, 2002, OSPECA exported 12 shipments of hydrogen fluoride to Mexico without the required Department of Commerce licenses in violation of the EAR. BIS also charged OSPECA with making false statements on Automated Export System (AES) records for the same 12 exports. Hydrogen fluoride is controlled under the EAR for chemical weapons reasons. As part of the settlement agreement, BIS agreed to suspend $15,000 of the penalty for a period of one year and waive that amount as long as OSPECA does not commit any further violations during the settlement period. BIS will also requires OSPECA to conduct an internal export compliance audit and submit the results of that audit to BIS for review. Honeywell International Incorporated, of Louisiana, had previously entered into a separate settlement agreement with BIS for its role in these unlicensed exports.

BIS also announced that Symmetricom, Inc., a San Jose, California-based supplier of network synchronization and timing products, agreed to pay a $35,500 civil penalty to settle charges that Datum, Inc., a company acquired by Symmetricom in 2002, exported cesium frequency standard equipment and an ovenized quartz crystal oscillator to Malayisa in violation of the EAR. Cesium frequency standard equipment is controlled by BIS for national security reasons and all exports of such items to Malaysia require Department of Commerce licenses. BIS also charged that Datum made a false statement on a Shipper’s Export Declaration (SED) in connection with this export. In addition, BIS alleged that, in May 1999, Datum exported an ovenized quartz crystal oscillator to an organization in India on BIS’s Entity List without the required Department of Commerce license. In addition, BIS charged that Datum forwarded the oscillator with knowledge that a violation of the EAR would occur and made a false statement on a SED.