International Trade Law News

Published by Jacobson Burton Kelley PLLC

A series of guilty pleas in a criminal export enforcement case announced today by the Justice Department is a good reminder of the need for U.S. exporters to be extra vigilant when trying to comply with U.S. export control laws, particularly when buyers are determined to circumvent U.S. law by using false end-user certifications and third countries as transshipment points.

Today, Aviation Services International, B.V., a Dutch aviation services company, its director and sales manager, both Dutch citizens, pleaded guilty to to a one-count criminal information related to a conspiracy to illegally export aircraft components and other items from the U.S. to entities in Iran via the Netherlands, the United Arab Emirates and Cyprus.

The criminal information charged each with conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions Regulations by exporting aircraft components and other goods to Iran without obtaining licenses from the Treasury Department’s Office of Foreign Assets Control (OFAC).

Among other things, the defendants were alleged to have engaged in the following activities:

• The defendants received orders from customers in Iran for U.S.-origin goods that were restricted from being transshipped into Iran. The defendants then contacted companies in the U.S. and negotiated purchases of materials on behalf of Iranian customers. The defendants provided false end-user certificates to certain U.S. companies to conceal that customers in Iran would be the true recipients of the goods.

• In order to conceal these activities from the U.S. government, the defendants caused certain companies in the U.S. to ship the materials to ASI in the Netherlands or to addresses in other countries, including the UAE and Cyprus. Upon arrival in the Netherlands or these other countries, the ordered materials were repackaged and transshipped to Iran.

• The defendants falsely certified that certain equipment, which had potential applications in Unmanned Aerial Vehicles, was being sent to the Polish Border Control Agency, when, in reality, the equipment was being sent to Iran.
  

• The defendants purchased aluminum sheets and rods from a Florida company and instructed the U.S. company and a freight forwarder to list the Netherlands as the ultimate destination in the shipping documents. ASI attempted to have these goods shipped from the Netherlands to Iran, but Dutch Customs officials detained them.

The two individual defendants each face a potential sentence of five years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss. ASI has agreed to pay a $100,000 fine and corporate probation for five years.