Where Industry and Security Intersect
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The Commerce Department alleged that, in December 1996 and December 1999, Realtek violated the terms of a Commerce-imposed denial order when it purchased U.S.-origin air-conditioning equipment and when it attempted to purchase U.S.-origin computer software. Firms that are subject to a denial order may not participate in any transaction that is subject to the Export Administration Regulations (EAR). The denial order that Realtek allegedly violated had been imposed in August 1995 because Realtek participated in an export of U.S.-origin microprocessor technology without the written assurance from the end-user that was required from under the EAR at that time.
Acting Assistant Secretary Prager noted that Realtek had cooperated with the investigators and had implemented a corporate compliance system designed to prevent further violations of the EAR. The $44,000 civil penalty that was assessed was part of a settlement of the case that also imposed a two-year denial of export privileges. The new denial will be suspended, provided Realtek commits no violations of U.S. export control laws during the denial period.
"The fine in this case is the maximum available under the law and reflects the fact that violating a denial order is a very serious offense. Mitigating factors permitted us to suspend the imposition of a further denial of export privileges," Acting Assistant Secretary Prager said.
The Department of Commerce, through its Bureau of Industry and Security, administers and enforces export controls for reasons of national security, foreign policy, anti-terrorism, nonproliferation, and short supply. Criminal penalties and administrative sanctions can be imposed for violations of the Export Administration Regulations.
Acting Assistant Secretary Prager commended Special Agent Ed Carrigan of the Office of Export Enforcement's field office in Boston who investigated the case.