Explaining that he was “overwhelmed” at work and “too busy”, an employee of a company that makes products which require a license for export :-
- Altered invoices so the products could be shipped without the required licenses;
- Changed shipping documents to conceal the need for the license to accompany the goods;
- Listed false license numbers on export paperwork; and
- Lied to fellow employees and his supervisors about the status and existence of export licenses.
Over a five-year period, the actions of the export coordinator led to at least 50 unlicensed exports of security sensitive items from the U.S. to such destinations as China, Taiwan, and Russia. Do you know what your employees are doing?
The individual is now serving a 42-month prison sentence on a criminal conviction. He was also fined $1,000.00. After his release he will be supervised for another three years and face a 10-year ban on working in the export community. (See press
His employer very narrowly escaped a similar fate. The company did so only because it: (1) discovered the violations and disclosed them to the US Government; and (2) cooperated extensively with the investigations. For its failure to adequately supervise its employees, however, it was assessed a fine of US$500,000.00. Thankfully for the company, the fine was suspended, but is due in full should any other violations occur during the two years following the settlement (2013-2015).
To minimize the likelihood of a repeat violation, the company has also been mandated to do what it should have done all along – hire an expert to ensure its compliance with US export laws.
These laws control the export of defense articles from the U.S. They regulate the sale of “dual-use” items, i.e. goods created for commercial use but with a military application. US exporters must also comply with the requirements of the US Foreign Corrupt Practices Act (FCPA). And all US persons need to be cognizant of and screen against doing business with Specially Designated Nationals (SDNs) and/or sanctioned countries.
For support with developing a corporate culture of compliance to support you and your employees, contact us.
DevelopTradeLaw, LLC provides business-oriented advice to the legal challenges that face companies doing business internationally. Contact us for more information or advice on the topic of this article.
