By: Brooke Driver
Certainly, violations of export controls are frequent and varied, but anyone paying attention to the publicized violations of the past few months (or this newsletter, for that matter) will notice a trend; the government is targeting companies for violating U.S. boycott regulations. The very similar cases of Digi-Key, Laptop Plaza Inc. and Leprino Foods Company stand as further evidence to that truth.
BIS agreed to settle with Digi-Key on September 13, 2013 for its high number of EAR violations. According to the Office of Antiboycott Compliance, Digi-Key’s violations fall under two categories; the company was accused of five instances of furnishing information about business relationships with Israel (aka “boycotted countries”) or blacklisted persons between the years of 2008 and 2011 and 58 instances of failures to report receipts of requests to engage in a restrictive trade practice or foreign boycott against a country friendly to the United States. All of these violations occurred during transactions involving the sale and/or transfer of goods or services to the United Arab Emirates and Malaysia. BIS has imposed what seems a fairly low penalty charge of $56,600 considering the high number of violations in this case.
Laptop’s case, settled September 7, 2013, resembles Digi-Key’s in that four of the seven violations were results of furnishing information about business relationships with Israel. Apparently, between August and September of 2006, Laptop engaged in unauthorized business transactions with Lebanon and Pakistan. Laptop committed three other violations of the EAR by failing to record and report these transactions. BIS chose to fine Laptop $48,800—to be paid within a month of the settlement date—for its penalties.
Leprino Foods Company settled with BIS this past June, agreeing to pay a fine of $32,000 for its 16 violations, one of which was—you guessed it, folks—furnishing information about business relationships with Israel. In this case, Leprino participated in business transactions with Bahrain, Oman, Qatar and the United Arab Emirates. The other fifteen violations were failures to report these actions. Leprino will pay $32,000 for its violations.