Three California Firms Busted for Export Violations
More than $750,000 in fines levied on companies for non-compliance with security rules
WASHINGTON, DC - 07/21/04 - A trio of California companies have been fined by the US Commerce Department's Bureau of Industry and Security (BIS) for violations of the federal government's Export Administration Regulations (EAR).
The BNC Corp. of San Rafael - also known as the Berkeley Nucleonics Corporation (BNC) - has said it will pay a $55,000 civil penalty and a five-year denial of export privileges to settle charges that, between 1998 and 2000,'the company exported and attempted to export shipments of nuclear pulse generators to India's Department of Atomic Energy (DAE) and the country's Nuclear Power Corporation (NPC)?without the required licenses.
At the time of the export, the BIS said that both the DAE and the NPC were both on its Entity List and exports to DAE and NPC therefore required prior authorization.
The Entity List is a compilation of end users that have been determined to present an unacceptable risk of diversion to developing weapons of mass destruction or missiles used to deliver these weapons, the DOC said.
Exports to those appearing on the Entity List require licenses.
In related criminal cases in June, the BNC pled guilty in the Northern District of California to violating the EAR and was fined $300,000.
Last December, two former employees of BNC, Richard Hamilton and Vincent Delfino, also pled guilty to related charges.
Hamilton pled guilty to misrepresenting and concealing facts on an export document, while Delfino pled guilty to making a false statement on an export control document.
Both were sentenced to a criminal fine of $1000, two years probation, and 100 hours of community service, and prohibited from engaging in or facilitating export transactions in the future.
The DOC also announced that Garden Grove-based Saint-Gobain Performance Plastics Inc. (SGPPL) recently agreed to pay a $697,500 civil penalty to settle charges that it illegally exported controlled Teflon-coated valves and pumps to Israel and Taiwan without the required export licenses on 189 occasions between 1998 and 2000.
The valves and pumps involved have their interiors - or "wetted" portions - coated with a fluoro-polymer such as Teflon that is highly resistant to corrosion from chemicals.
The export of such valves and pumps are controlled "because of their potential use for chemical and biological warfare purposes," the BIS said.
BIS also charged that SGPPL failed to file a Shipper's Export Declaration (SED) for some of these shipments and filed SEDs for others which falsely indicated that the shipments did not require an export license.
Of the 189 violations that BIS claimed that SGPPL committed, 123 of the violations were committed by the Furon Corp. prior to its acquisition by SGPPL in 1999.
Under the principles of successor liability, corporations may be held liable for violations of export control laws committed by businesses that they acquire, the agency said.
In addition, General Monitors of Lake Forest, California, will pay a $40,000 civil penalty to settle charges that it violated the EAR when it failed to obtain the required export licenses for shipments of gas and fire detection equipment to India.
According to the BIS, General Monitors exported gas and fire detection equipment on six occasions in late 1998 without the required licenses to Bharat Heavy Electricals Ltd. (BHEL) in Hyderabad, India.
The BIS also charged that on 12 occasions between 1998 and 2001, General Monitors falsely indicated that shipments to BHEL did not require an export license on the Shipper's Export Declarations (SEDs) accompanying the shipments to BHEL.
At the time of the export, BHEL was on the agency's Entity List and exports to the Indian company did require prior authorization.
General Monitors voluntarily disclosed some of the violations and "cooperated fully" with the investigation, the BIS said.
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