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BIS Imposes Record US$17 Million Penalty for Export Violations

The U.S. Department of Commerce’s Bureau of Industry and Security recently imposed a record US$17 million penalty to the former owner and CEO of a company that provided foreign customers with a U.S. address that they used to acquire U.S.-origin items for export without alerting U.S. merchants of the items’ intended destinations. The company would regularly change the values and descriptions of items on export documentation even where it knew the accurate value and nature of the items. The CEO was made aware that such activity violated U.S. export laws but directed it to proceed nonetheless. He also established and/or authorised the company’s personal shopper programme, in which employees purchased items for foreign customers from a shopping list while falsely presenting themselves to U.S. merchants as the domestic end-users of the items.

BIS has responded with an order imposing civil penalties of US$17 million against the man (a record penalty for an individual), with US$7 million suspended, and a five-year denial of export privileges, with one year suspended. The company was previously assessed a US$27 million penalty in relation to the same violations, with US$17 million suspended.

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