In a recent order, the Department of Commerce’s Bureau of Industry and Security (“BIS”) revoked the export privileges for Obaidullah Sayed, an Illinois resident. Sayed was convicted of conspiring to export computers, computer systems, and other related equipment to the Pakistan Atomic Energy Commission without a license. Sayed was sentenced to one year and one day in prison and was required to forfeit $247,000. As a result of this conviction, BIS suspended Sayed’s export privileges for 10 years from the date of conviction.
In another recent order, BIS issued an order against Dotphins, LLC for violating the Export Administration Regulations (“EAR”). According to the order, Dotphins violated the EAR by exporting red dot sites to Austria and Switzerland without first obtaining the necessary export licenses. The scopes were classified under ECCN 0A987.c (however, that ECCN was changed to ECCN 0A504 in 2018 but remains export-controlled for those destinations). As a result of these violations, BIS ordered the following:
- Revocation of Dotphins’ export privileges for a two-year period
- Attendance at an export control training program within 12 months
- Verification of attendance at export training program
Notably, BIS waived the revocation of Dotphins’ export privileges and instead implemented a two-year probationary period contingent on Dotphins not violating export regulations during that timeframe and the completion of export control training.
These two recent orders from BIS illustrate the actions the US Government can take against individuals who violate US export controls ranging from administrative action to criminal prosecution. It is important that individuals and companies have an understanding of their obligations under US export control regulations and economic sanctions. Administrative penalties can reach $300,000 per violation or twice the value of the transaction, whichever is greater. Criminal penalties include up to 20 years imprisonment and up to $1 million in fines per violation. The Dotphins action also highlights the seriousness with which BIS approaches export control violations, even when there are only a few missteps. Additionally, the scopes that Dotphins exported had a total value of less than, $200, which shows that low dollar value transactions can still pose significant export compliance risks. Companies should review their export control compliance policies and procedures on a routine basis to ensure they are operating appropriately and effectively.
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