By: Holly Thorne
Flowserve Corporation, one of the world’s largest manufacturers of pumps, valves, seals and components, has settled 288 charges of unlicensed export and reexports that occurred from its Irving, TX location, and among ten of its international affiliates. Flowserve has agreed to pay a civil penalty totaling $2.5 million to settle charges for violating the EAR by making unlicensed exports and reexports to a number of countries, including China, Singapore, Malaysia, and Venezuela. BIS also alleged that six of Flowserve’s foreign affiliates caused the transshipment of EAR99 items to Iran and/or the reexport of EAR99 items to Syria. The transactions involved a total value of $2.15 million.
Flowserve and its affiliates will also be required to conduct external audits of their compliance programs and submit the results to BIS. Flowserve’s voluntary disclosure of its violations in late September 2011 significantly reduced its penalty amount.
Violations by Flowserve’s international affiliates:
Flowserve GB Ltd. (United Kingdom)
Twenty-six charges of engaging in prohibited conduct of unlicensed exports and reexports to Iran and Syria. Penalty: $405,000
Causing, aiding, or abetting unlicensed exports to Iran. Penalty: $20,000
Engaging in prohibited conduct of unlicensed exports and reexports controlled for chemical and biological weapons proliferation reasons. Penalty: $510,000.
Engaging in unlicensed exports to Iran and Syria. Penalty: $310,000.
Unlicensed exports to Iran and reexporting pumps and pump components to Syria. Penalty: $125,000.
Flowserve S.A.S. France
Unlicensed exports to Iran. Penalty: $210,000.
Flowserve Pompes S.A.S. (France)
Unlicensed exports to Iran, reexporting pumps and pump components to Syria. Penalty: $135,000.
Reexporting pumps and pump components controlled for chemical and biological weapons proliferation reasons to Taiwan and Singapore. Penalty: $25,000.
Reexporting valves and valve components controlled for chemical and biological weapons proliferation reasons to Indonesia. Penalty: $5,000.
Worthington S.r.l. (“Flowserve Italy”)
Reexporting pumps and pump components controlled for chemical and biological weapons proliferation reasons to Saudi Arabia. Penalty: $30,000.
Flowserve’s home base in Irving, Texas, has also been penalized $725,000 for failure to comply with reporting requirements. In a related case, OFAC settled charges with Flowserve alleging 58 separate violations of its Iranian, Cuban and Sudanese sanction programs. Flowserve agreed to remit an additional $502,408 to OFAC to resolve the charges.