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U.S company to pay $540,000 to settle violations, telecommunications equipment destined for Russia

U.S company to pay $540,000 to settle violations

The Bureau of Industry and Security (BIS) of the U.S. Commerce Department today announced that the owner of a U.S. company has agreed to pay $540,000 for seven alleged violations in connection with the submission of false or misleading information of the values of telecommunications networking equipment controlled for national security, encryption or anti-terrorism reasons and destined for Russia.

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According to the BIS release [PDF 482 KB], the settlement resolved the following allegations:

  • That on six occasions between December 2014 and August 2015, the U.S. company and its owner prepared invoices on company letterhead that significantly undervalued the items, and provided these invoices to a freight forwarder. The freight forwarder subsequently filed an Electronic Export Information (EEI) containing the false value information in the Automated Export System for each of the shipments.
  • In February 2015, the U.S. company and its owner generated and provided to the freight forwarder an invoice on company letterhead that falsely undervalued the items so that the stated value did not exceed $2,500, and thus did not appear to trigger an EEI filing requirement.

To settle the matter, the owner agreed to a penalty of $540,000 (of which $480,000 will be suspended for a two-year probationary period) and a two-year suspended denial of export privileges under the Export Administration Regulations (EAR).


For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner and Global Practice Leader
T: 312-665-1022
E: dzuvich@kpmg.com

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614
E: jlmcloughlin@kpmg.com

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057
E: asiciliano@kpmg.com

Steve Brotherton
Principal and Global Export and Sanctions Leader
T: 415-963-7861
E: sbrotherton@kpmg.com

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094
E: labad@kpmg.com

Irina Vaysfeld
Principal
T: 212-872-2973
E: ivaysfeld@kpmg.com

Amie Ahanchian
Principal
T: 202-533-3247
E: aahanchian@kpmg.com

Christopher Young
Principal
T: 312-665-3229
E: christopheryoung@kpmg.com

Gisele Belotto
Managing Director
T: 305-913-2779
E: gbelotto@kpmg.com

George Zaharatos
Principal
T: 404-222-3292
E: gzaharatos@kpmg.com

Andy Doornaert
Managing Director
T: 313-230-3080
E: adoornaert@kpmg.com

Jessica Libby
Managing Director
T: 612-305-5533
E: jlibby@kpmg.com

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