Bureau of Industry Security Ramping Up Export Control Enforcement
The Department of Commerce’s Bureau of Industry and Security promised aggressive enforcement of export controls. BIS’s promise extended beyond the Russian-Belarus export controls. BIS has kept its promise.
WEBs Electronics Trading Company
In a recent charging letter, BIS stated that WEBS Electronics Trading Company, a United Arab Emirates company, violated U.S. export controls by shipping or trying to ship $50,000 worth of U.S.-origin telecommunications items to Syria and Iran. The company’s owner, Mohammad Alhamra, also lied to a BIS agent when he denied exporting products to Syria.
BIS stated it could impose a maximum civil penalty of $330,947 per violation or twice the value of the illegal transactions, whichever is greater.
BIS’s charges stem from an incident in 2018, when WEBS tried to reexport a U.S. origin Brocade 6510 switch and transceiver from the UAE to Syria. The shipment was detained and returned to WEBS because it was controlled (ECCN 5A002.a for Anti-Terrorism and National Security) and required a license to export to Syria.
A BIS agent conducted a post-shipment verification with WEBS and Alharma “denied” selling products to Syria and could not provide documentation concerning the shipment and the destination. One month later, WEBS tried to reexport a U.S.-origin items to Syria, a Blade System SP transceiver which was controlled (ECCN 5A991.b for Anti-Terrorism). After the shipment was detained, Alhamra supplied an invoice confirming that the shipment was destined for a company in Syria. Alhamra estimated that up to 80 percent of its business involved sales to Syria.
The next year, BIS conducted a post-shipment verification for two exports of computer equipment classified as EAR99. WEBS was not able to produce documentation concerning the sale of these items.
BIS later concluded that WEBS had been selling U.S.-origin controlled telecommunications equipment for years to Syria. BIS’ charging letter includes a list of all these illegal transactions.
BIS issued a charging letter to Seagate Technology alleging that Seagate violated U.S. export controls by selling hard disk drives to Huawei, a blacklisted Chinese telecommunications company during August 2020 and September 2021. Seagate contends that the exports were not subject to EAR.
Seagate’s exports to Huawei have been the subject of a Republican-led Senate Commerce Committee inquiry. The Committee staff concluded that Seagate incorporated controlled semiconducter items into the hard disk drives with knowledge that the products were destined to Huawei.
Seagate is attempting to resolve this matter with BIS.