U.S. BIS issues “charging letter” against Chinese cable manufacturer for violating U.S. export controls

Alleging violations of the Export Administration Regulations (EAR) for causing, aiding, and/or abetting violations of the EAR

Chinese cable manufacturer for violating U.S. export controls

The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce issued an administrative charging letter* against a Chinese company alleging violations of the Export Administration Regulations (EAR) for causing, aiding, and/or abetting violations of the EAR.

According to the BIS release [PDF 104 KB], from September 2014 to January 2016, the Chinese company (a cable manufacturer) served as a “cutout” between a Chinese technology company, that was under investigation by the U.S. government for EAR violations at the time, and Iranian telecommunications companies.

The charging letter alleges that the Chinese cable manufacturer signed contracts with the Chinese technology company and Iranian telecommunications companies to deliver U.S.-origin equipment to Iran as part of an effort to conceal and obfuscate the Chinese technology company’s Iranian business from U.S. investigators. BIS charged the Chinese cable manufacturer with 18 violations of the EAR.    

In March 2017, the Chinese technology company admitted guilt for its conduct related to these charges and broader violations of U.S. export controls. The Chinese technology paid a combined penalty of $1.19 billion in criminal and administrative fines at the time.   

*A charging letter is merely the means by which administrative enforcement proceedings are initiated pursuant to the EAR, and the respondent is entitled to contest the violations and allegations therein, as part of the adjudicative procedures set forth in Part 766 of the regulations. Administrative enforcement proceedings under the EAR currently are adjudicated by administrative law judges employed by the U.S. Coast Guard.

For more information, contact a professional with KPMG’s Trade & Customs services:

Doug Zuvich
Partner and Global Practice Leader
E: dzuvich@kpmg.com

John L. McLoughlin
Principal and East Coast Leader
E: jlmcloughlin@kpmg.com

Andy Siciliano
Partner and National Practice Leader
E: asiciliano@kpmg.com

Steve Brotherton
Principal and Global Export and Sanctions Leader
E: sbrotherton@kpmg.com

Luis (Lou) Abad
Principal, Washington National Tax
E: labad@kpmg.com

Irina Vaysfeld
Principal
E: ivaysfeld@kpmg.com

Amie Ahanchian
Principal
E: aahanchian@kpmg.com

Christopher Young
Principal
E: christopheryoung@kpmg.com

Gisele Belotto
Principal
E: gbelotto@kpmg.com

George Zaharatos
Principal
E: gzaharatos@kpmg.com

Andy Doornaert
Managing Director
E: adoornaert@kpmg.com

Jessica Libby
Principal
E: jlibby@kpmg.com

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