The Justice Department recently announced a settlement with Avnet Asia for illegal shipments of sensitive U.S. commodities to China and Iran. Under the settlement, DOJ agreed to a non-prosecution agreement (NPA) in exchange for Avnet Asia’s payment of a $1.508 million monetary penalty and continued cooperation.
Avnet Asia also agreed to an administrative settlement of approximately $1.72 million to settle claims that it illegally exported power amplifiers to China, which are dual-use items regulated by the Bureau of Industry Standards at the Department of Commerce.
One of two former employees, Cheng Bo, was indicated for criminal export violations as well. Bo was indicted for conspiracy to defraud the United States and money laundering.
Bo arranged to supply a Hong-King based company in which he had a financial interest to supply the company with US electronic equipment and components. To further the scheme, Bo submitted false paperwork for power amplifiers and other restricted goods that falsely indicated the goods would be used in Hong Kong when, in fact, the goods were delivered to mainland China. The other former employee was not charged because the conduct was barred by the statute of limitations.
Avnet Asia, which is based in Singapore, accepted responsibility for the conduct of two former employees, who each falsified records to conceal that US dual-use goods were intended for delivery to mainland China and Iran. The documents falsely indicated that the goods were intended for delivery to Hong Kong and Singapore, respectively.
Avnet Asia is a subsidiary of Phoenix-based Avnet, Inc., a global distributor of electronic components and related software. Avnet Asia was involved in two separate schemes.
The first scheme occurred between 2007 and 2009 when a Singapore-based employee assisted two Singapore companies order and deliver U.S. goods to Iran and China end-users. In total, 29 illegal shipments were facilitated by the Singapore-based employee. The value of the shipments reached approximately $347,000.
The second scheme took place between 2012 and 2015 and involved 18 shipments of U.S. goods to mainland China in violation of Export Administration Regulations (EAR), including to a company on the BIS Entity List. The value of the shipments reached approximately $814,000.
The BIS settlement resolved allegations of 53 illegal shipments between October 2007 and January 2014 involving over $1.2 million of items subject to the EAR or the Iran Sanctions Program. Most of the items were classified under Export Classification Number 3A00, which are subject to National Security and Anti-Terrorism export controls. BIS also found that Avnet Asia sold components to Wing Shing Computer Components Company (H.K.) Ltd., a party on the BIS Entity List, without the required BIS licenses.