International Trade Law News /title <!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Strict//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-strict.dtd"> <html xmlns="http://www.w3.org/1999/xhtml" xml:lang="en" lang="en"> <meta name="verify-v1" content="6kFGcaEvnPNJ6heBYemQKQasNtyHRZrl1qGh38P0b6M=" /> <head> <title>International Trade Law News

« Home | Senate Passes Comprehensive Iran Sanctions, Accoun... » | U.S. Business Groups Urge Obama Administration to ... » | Senate Holds Confirmation Hearing on BIS Officials... » | Senate to Hold Hearing on Nominations of Senior BI... » | Incoterms Update: Incoterms 2010 Likely to Take Ef... » | Export Control Practitioners Group Issues U.S. Exp... » | Twenty Two Executives and Employees of Military an... » | International Trade Law News Twitter Updates for 1... » | Philadelphia Area Chemical Engineer Sentenced to F... » | Coalition for Security and Competitiveness Release... » 

February 03, 2010 

DDTC Imposes $1 Million Penalty on German Company and U.S. Affiliate for ITAR Violations

The State Department's Directorate of Defense Trade Controls (DDTC) announced today that it entered into a consent agreement this week with Kaltenkirchen, Germany-based Interturbine Aviation Logistics GmbH, and its Grand Prairie Texas branch office, Interturbine Aviation Logistics GmbH, LLC, to resolve violations of the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR) allegedly committed in 2004. The Interturbine companies are distributors of a wide range of products for the international commercial aviation sector.

This case marks the first penalty action taken by DDTC in 2010. It is widely expected that DDTC this year will conclude many more than the consent agreements that were finalized in 2009.

According to the Proposed Charging Letter, DDTC alleged that Interturbine committed seven violations of the ITAR associated with the unlicensed export to Germany of  400 kilograms of a heat resistant protective coating classified in USML Category IV(f) that can be used on missiles to protect high heat areas. The Proposed Charging Letter notes that even though the product was indicated in the company's inventory system as export controlled, some senior members of the company in Germany bypassed the company's normal procedures to order the product from its U.S. affiliate for shipment to a customer in Germany. After the product was shipped from Texas to Germany as NLR, the German customer later contacted Interturbine about the lack of an export license, suspended payment and quarantined the shipment. The material was subsequently returned to the U.S. and seized by U.S. Customs and Border Protection. A criminal investigation was then initiated by U.S. Immigration and Customs Enforcement.

Although the criminal case was later dropped as a result of the company's remedial measures, DDTC charged the company with one count of exporting the ITAR-controlled material to Germany without the proper license, one count of misrepresentation and omission of facts, two counts of willfully causing an unauthorized export, one count of exporting a defense article without being registered with DDTC, one count of failing to obtain a non-transfer and use certificate (DS-83) and one count of an unauthorized retransfer.

Under the consent agreement, Interturbine agreed to pay a civil penalty of $1,000,000, of which $900,000 will be suspended. DDTC agreed to suspend $500,000 of the penalty on the condition that Interturbine has already applied that amount to self-initiated, pre-consent agreement remedial compliance measures. In addition, $400,000 will be suspended on the condition that Interturbine maintains its self-initiated exclusion from all ITAR regulated activities.

If within the two-year term of this Consent Agreement Interturbine decides to become involved in ITAR regulated activities, Interturbine agreed to use this $400,000 for additional remedial compliance measures agreed to by the Department.  Interturbine will also be subject to an independent audit to ensure that its company-wide Automated Export Control system prevents its involvement in all ITAR regulated activities and agreed to on-site reviews by DDTC. 


According to DDTC, Interturbine acknowledged the seriousness of its conduct and cooperated with the investigation, expressed regret for these activities, and took appropriate steps to improve its export compliance program, which is now prominently featured on the company's website.

DDTC also determined that an administrative debarment of Interturbine is not appropriate at this time since the company has already begun implementing the remedial compliance actions specified in this consent agreement.

 The Consent Agreement, Proposed Charging Letter and Order in this case can be found here.

Labels:


Editor

Subscribe

Subscribe to our confidential mailing list

Mobile Version

Search Trade Law News

International Trade and Compliance Jobs

Jobs from Indeed

Archives

Categories

Disclaimer

  • This Site is presented for general informational purposes only and does not constitute legal advice. No attorney-client relationship is formed when you use this Site. Do not consider the Site to be a substitute for obtaining legal advice from a qualified attorney. The information on this Site may be changed without notice and is not guaranteed to be complete, correct or up-to-date. While we try to revise this Site on a regular basis, it may not reflect the most current legal developments. The opinions expressed on this Site are the opinions of the individual author.
  • The content on this Site may be reproduced and/or distributed in whole or in part, provided that its source is indicated as "International Trade Law News, www.tradelawnews.com".
  • ©2003-2015. All rights reserved.

Translate This Site


Powered by Blogger