High Performance Computers

Bureau of Industry and Security Fines California Company for Illegal Export of Technology to Russian Engineer

Details
FOR IMMEDIATE RELEASE
BUREAU OF INDUSTRY AND SECURITY
Monday, February 24 2014
Office of Congressional and Public Affairs
www.bis.doc.gov
202-482-2721

Bureau of Industry and Security Fines California Company for Illegal Export of Technology to Russian Engineer

WASHINGTON – The U.S. Department of Commerce’s Bureau of Industry and Security (BIS), Office of Export Enforcement (OEE), today announced that it has reached a $115,000 civil settlement with Intevac, Inc., of Santa Clara, CA. BIS fined the company for five violations of the Export Administration Regulations (EAR), including the unauthorized release of export controlled manufacturing technology to a Russian national working at its U.S. facility. The settlement involves "deemed exports," releases of controlled technology made to a foreign national located in the U.S.

"Deemed export compliance is a top priority for the Bureau of Industry and Security," said David W. Mills, Assistant Secretary of Commerce for Export Enforcement. "Today’s settlement highlights the need for companies to be vigilant to prevent the unauthorized release of U.S. technology and data."

Intevac voluntarily disclosed the unauthorized release of drawings and blueprints for parts and identification numbers for parts to the Russian national in question, who was employed as an engineer at the company’s Santa Clara headquarters. Under the EAR, such information constitutes technology that is controlled for national security reasons. Intevac applied for a deemed export license after discovering the initial releases but failed to prevent additional releases of technology while the license application was pending. BIS charged Intevac with knowledge of these additional releases and considered the company’s conduct to be an aggravating factor in the penalty assessment. The company was also charged with one violation related to the unauthorized transmission of technology to its subsidiary in China.

Organizations that most commonly obtain deemed export licenses include universities, high technology research and development institutions and bio-chemical firms. In certain cases, they need to obtain deemed export licenses from BIS before making such releases.

BIS controls exports and reexports of dual-use commodities, technology, and software for reasons of national security, missile technology, nuclear non-proliferation, chemical and biological weapons non-proliferation, crime control, regional stability, foreign policy and anti-terrorism. Criminal penalties and administrative sanctions can be imposed for violations of the Export Administration Regulations. For more information, please visit www.bis.doc.gov.

 

Commerce Department Announces Move Against Russian Expropriation of Ukrainian Company

Details
FOR IMMEDIATE RELEASE
BUREAU OF INDUSTRY AND SECURITY
Friday, April 11 2014
Office of Congressional and Public Affairs
www.bis.doc.gov
202-482-2721


Commerce Department Announces Move Against Russian Expropriation of Ukrainian Company

WASHINGTON – The U. S. Department of Commerce's Bureau of Industry and Security announced today that it has added a company located in the occupied Crimea region of Ukraine to the Entity List in response to Russian expropriation of the company. The Entity List designation imposes a license requirement for the export, reexport or in-country transfer of items subject to the Export Administration Regulations to the company, with the presumption of denial. The company, Chernomorneftegaz, a.k.a. Chornomornaftogaz and NJSC Chornomornaftogaz, is a regional oil and gas company in Crimea and a subsidiary of the Ukrainian company Naftogaz, but its assets are now being overseen by Russian government interests following their seizure by the Crimean parliament.

"The addition of Chernomorneftegaz to the Entity List sends a strong message of the United States government's condemnation of Russia's incursion into Ukraine and expropriation of Ukrainian assets," said Under Secretary of Commerce Eric L. Hirschhorn in announcing the move.

The Department of Commerce's addition of Chernomorneftegaz to the Entity List is being done in conjunction with a parallel action by the Department of the Treasury. Today's move is consistent with the President's finding in Executive Order 13660 that the actions and policies of persons who have asserted governmental authority in the Crimean region without the authorization of the Government of Ukraine threaten the national security and foreign policy of the United States. In Executive Order 13661 and Executive Order 13662, the President further found that the actions and policies of the Russian government with respect to Ukraine – including the deployment of its military forces to, and purported annexation of, Crimea – undermine Ukraine's democratic processes and institutions, threaten Ukraine's peace, security, stability, sovereignty, and territorial integrity, and contribute to the misappropriation of its assets. In a related action today by the Department of the Treasury, Chernomorneftegaz is being designated pursuant to E.O. 13660 because it is complicit in the misappropriation of state assets of Ukraine or of an economically significant entity in Ukraine.

Chernomorneftegaz is being added to the Department of Commerce's Entity List under two entries, consisting of one entry in Crimea (Occupied) with an additional entry added to provide a cross reference from Ukraine. The United States continues to condemn in the strongest terms Russia's occupation of Crimea and will not recognize Russia's illegal annexation of Crimea.

 

FORMER CONNECTICUT RESIDENT INDICTED FOR

Details
U.S. Department of Justice For Immediate Release: January 21, 2014
United States Attorney's Office Contact -- BIS Public Affairs: 202-482-2721

FORMER CONNECTICUT RESIDENT INDICTED FOR

ATTEMPTING TO SHIP SENSITIVE MILITARY DOCUMENTS TO IRAN

Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that a federal grand jury sitting in Bridgeport has returned an indictment charging MOZAFFAR KHAZAEE, formerly of Manchester, Conn., with interstate transportation of stolen property, after he attempted to ship to Iran proprietary material relating to military jet engines and the U.S. Air Force’s F35 Joint Strike Fighter program that he had stolen from defense contractors where he had been employed. KHAZAEE was arrested January 9, 2014 at Newark Liberty International Airport in New Jersey, and was ordered detained pending his transport to Connecticut to face the charges.

As alleged in court documents, federal law enforcement agents began investigating KHAZAEE in November 2013 when officers with U.S. Customs and Border Protection Service ("CBP"), assisted by Homeland Security Investigations ("HSI") special agents, inspected a shipment that KHAZAEE sent by truck from Connecticut to a freight forwarder located in Long Beach, Calif., which was intended for shipment from the U.S. to Iran. The documentation for KHAZAEE’s shipment indicated that it contained household goods. Upon inspecting the shipment, however, CBP officers and HSI personnel discovered that the content of the shipment primarily contained numerous boxes of documents consisting of sensitive technical manuals, specification sheets, and other proprietary material relating to the U.S. Air Force’s F35 Joint Strike Fighter program and military jet engines. Upon further investigation, law enforcement learned that KHAZAEE holds Iranian and U.S. citizenship and, as recently as August 2013, worked as an engineer for defense contractors, including firms that are the actual owners of the technical and proprietary documents and materials in KHAZAEE’s shipment.

KHAZAEE, who became a naturalized U.S. citizen in 1991 and holds a valid U.S. passport, recently moved from Connecticut to Indianapolis. He was arrested after flying from Indianapolis to Newark, before he was able to board a connecting flight to Frankfurt, Germany. KHAZAEE’s ticketed destination was Tehran, Iran.

The indictment charges KHAZAEE with two counts of transporting, transmitting and transferring in interstate commerce goods obtained by theft, conversion, or fraud. Each charge carries a maximum term of imprisonment of 10 years and a fine of up to $250,000.

U.S. Attorney Daly stressed that an indictment is only a charge and is not evidence of guilt. Charges are only allegations and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.

U.S. Attorney Daly stated that there is an ongoing investigation in this matter and encouraged anyone with information that may be relevant to that investigation to call HSI or the FBI in Connecticut.

This matter is being investigated by Homeland Security Investigations in New Haven and Los Angeles, the New Haven Division of the Federal Bureau of Investigation, the Defense Criminal Investigative Service in New Haven, the U.S. Customs and Border Protection Service in Los Angeles, the U.S. Air Force’s Office of Special Investigations in Los Angeles and Boston, and the Department of Commerce’s Boston Office of Export Enforcement.

U.S. Attorney Daly also commended the efforts of the many other agencies and offices that have been involved in this investigation, including the U.S. Attorney’s Offices for the Central District of California, the Southern District of Indiana and the District of New Jersey, as well as HSI, CBP, and FBI in New Jersey, and HSI, FBI and DCIS in Indianapolis.

This case is being prosecuted by Assistant U.S. Attorney Stephen Reynolds of the District of Connecticut and Trial Attorney Brian Fleming of the Justice Department’s Counterespionage Section (CES).