The latest on Russia sanctions from the International Trade and Supply Chain Team
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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.

Husch Blackwell’s Export Controls and Economic Sanctions Team continues to closely monitor all export controls and enforcement related developments and will provide further updates as circumstances warrant.  Should you have any questions or concerns, please contact Cortney MorganGrant Leach, Emily Mikes, or Eric Dama of our Export Controls and Economic Sanctions Team.

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Photo of Cortney Morgan Cortney Morgan

An experienced attorney in the area of international trade and supply chain issues, Cortney advises foreign and domestic clients on all aspects of international trade regulation, planning and compliance, including import (customs), export controls, economic sanctions, embargoes, international trade agreements and preference programs.

Photo of Grant Leach Grant Leach

Grant focuses his practice on international trade, international compliance, securities, mergers, acquisitions and general corporate matters.

Photo of Emily Mikes Emily Mikes

At Husch Blackwell, Emily focuses on export controls, economic sanctions and related government investigations. She advises clients in a wide array of industries on the specifics of trade regulations, analyzing the effects of rules and restrictions on businesses as they import and export…

At Husch Blackwell, Emily focuses on export controls, economic sanctions and related government investigations. She advises clients in a wide array of industries on the specifics of trade regulations, analyzing the effects of rules and restrictions on businesses as they import and export goods and materials.

Photo of Eric Dama Eric Dama

Eric works closely with in-house counsel and foreign trade teams to help exporters navigate an increasingly complex international trade landscape.

Eric guides U.S. and international companies through export licensing and classification requests, voluntary-self disclosures, international trade due diligence, and other regulatory matters. In…

Eric works closely with in-house counsel and foreign trade teams to help exporters navigate an increasingly complex international trade landscape.

Eric guides U.S. and international companies through export licensing and classification requests, voluntary-self disclosures, international trade due diligence, and other regulatory matters. In addition, Eric helps clients navigate internal and external investigations and enforcement actions, as well as internal compliance and training programs. He works with clients in a variety of sectors and industries, including aviation, manufacturing and equipment, cybersecurity, technology, defense contracting, logistics, energy, consumer products, and healthcare.