|FOR IMMEDIATE RELEASE||
BUREAU OF INDUSTRY AND SECURITY
| Friday, February 5th, 2010
Office of Public Affairs
WASHINGTON - The Commerce Department's Bureau of Industry and Security (BIS) and the Treasury Department’s Office of Foreign Assets Control (OFAC) have entered into a joint settlement agreement with Balli Group PLC and Balli Aviation Ltd. (collectively “Balli”) with civil penalties totaling $15,000,000, regarding allegations that Balli conspired to export commercial aircraft from the United States to Iran in violation of the Export Administration Regulations (EAR) and the Iranian Transactions Regulations (ITR). Balli has also agreed, as part of the settlement agreement, to hire an unaffiliated third-party consultant with expertise in U.S. export control laws to conduct external audits of Balli’s compliance with U.S. export control laws and sanctions regulations, and to be subject to a five-year suspended Denial Order.
"We will not tolerate the behavior of any company whose actions endanger national and global security," said Secretary of Commerce Gary Locke."
BIS charged that between 2005 and 2008 Balli conspired with an Iranian airline to export or reexport U.S.-origin aircraft to Iran without the required U.S. Government authorization. Specifically, three of the aircraft were flying on routes in and out of Iran using Iranian flight numbers while under the operational control of the Iranian airline. Balli allowed the aircraft to continue to be operated contrary to U.S. export control laws despite warnings from BIS and the manufacturer. Additionally, Balli misled and concealed information from BIS regarding the role the Iranian airline played in the acquisition and financing of the aircraft via funds from the Iranian Foreign Exchange Reserve Fund.
BIS also charged that from July 2008, and continuing though September 2008, Balli took actions prohibited by a BIS order temporarily denying its export privileges. Balli carried on negotiations with persons, including another person subject to the Temporary Denial Order, concerning financing, receiving and/or using three additional U.S.-origin aircraft that had been exported from the United States and are subject to the EAR.
In a related criminal case, Balli Aviation pled guilty to conspiracy and violations involving the EAR, the ITR, and the International Emergency Economic Powers Act and was fined $2,000,000.
Acting Deputy Assistant Secretary of Commerce for Export Enforcement Thomas Madigan praised the BIS Office of Export Enforcement’s Washington field office, along with OFAC and the U.S. Attorneys Office for the District of Columbia for their outstanding work on the case. This case represents the largest joint settlement involving BIS and OFAC and the largest civil penalty ever imposed by BIS.
"Today's case should serve as further warning of Iran's continued efforts to circumvent sanctions and obtain US technology. Together with our colleagues from the Justice and Commerce departments, OFAC will continue to aggressively pursue both domestic and foreign entities that seek to violate US sanctions programs by exporting goods to Iran from the United States." said Adam J. Szubin, Director, Office of Foreign Assets Control.
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.