BIS Imposes Civil Penalties on Varian and its Affiliates
By Juli C. Schwartz, Guest Contributor*
The Commerce Department's Bureau of Industry and Security (BIS) recently released a trio of administrative settlements involving technology giant, Varian, Inc., and two of its European affiliates. In exchange for voluntary self-disclosures, BIS assessed relatively modest sums of $26,400, $39,600 and $8,800 in penalties for multiple alleged violations of the Export Administration Regulations (EAR). The three settlement agreements were executed in late July, and BIS issued the final orders on August 2, 2006.
The charges arose out of three separate transactions that occurred during 2001 and 2003. According to the first two charging letters, Varian, Inc., the Palo Alto based parent, exported computers and associated software classified under export control classification numbers (ECCN) 4A003 and 5D002 to its Dutch affiliate, Varian B.V., for transshipment to Syria in 2001, without a validated export license. BIS brought additional counts against Varian, Inc., for making false declarations about the shipments' “no license required” (NLR) status on the Shippers Export Declarations, and for failing to disclose the goods' final destination. Varian B.V., the sister company, was similarly charged with aiding and abetting the exportation of said items, unlawfully reexporting the items to Syria and knowingly contravening relevant EAR provisions. The second charging letter also cited Varian B.V. for reexporting ethernet switches classified as 5A991 to Syria in a subsequent transaction two years later. The third and final charging letter alleged two violations against a Varian subsidiary in Switzerland, Varian A.G., for reexporting computers and associated software to North Korea in 2002.
These settlements all involved shipments to Syria before the comprehensive sanctions imposed by the Syria Accountability Act were imposed in May 2004. These settlements follow the recent announcement of a robust third quarter for Varian. These settlements also demonstrate that BIS will settle cases involving a voluntary disclosure for a fraction (40%, in this instance) of the maximum penalty permitted in civil cases.
The charging letters, settlement agreements and orders issued in these cases can be found at the following link: http://efoia.bis.doc.gov/ExportControlViolations/TOCExportViolations.htm.
* Ms. Schwartz is a recent graduate of the Rutgers University School of Law.
Labels: BIS, Export Controls
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