Bureau of Industry and Security Announces $2.8 Million Civil Settlement with Computerlinks FZCO for Charges Related to Unlawful Exporting of Technology to Syria

WASHINGTON –The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) today announced that Computerlinks FZCO, Dubai, United Arab Emirates, has agreed to pay a $2.8 million civil penalty following allegations that it committed three violations of the Export Administration Regulations (EAR) related to the transfer to Syria of devices designed to monitor and control Internet traffic. In addition to the civil penalty, which is the statutory maximum, the company has agreed to submit to independent, third-party audits

"Today’s settlement reflects the serious consequences that result when companies evade U.S. export controls. It is the result of an aggressive investigation and prosecution by BIS of the unlawful diversion of U.S. technology to Syria," said Under Secretary for Industry and Security Eric L. Hirschhorn. "It is vital that we keep technology that can repress the Syrian people out of the hands of the Syrian government."

BIS alleged that on three occasions in 2010 and 2011, Computerlinks FZCO engaged in transactions or took actions with the intent to evade the EAR in connection with the unlawful export and reexport to Syria of equipment and software obtained from Blue Coat Systems, Inc., of Sunnyvale, California ("Blue Coat"), designed for use in monitoring and controlling Internet traffic. The equipment and software are controlled due to national security and anti-terrorism reason, and as encryption items, and valued at approximately $1.4 million.

Computerlinks FZCO was an authorized distributor in the Middle East for Blue Coat, distributing Blue Coat hardware and software products and providing support services to resellers and end users, including account, sales, and installation support and assistance. Under the distribution agreement with Blue Coat, Computerlinks FZCO was obligated to "comply with all export and import laws, rules, policies, procedures, restrictions, and regulations of the Department of Commerce[.]" The distribution agreement also contained additional safeguards specially applicable to Computerlinks FZCO, including that all orders to Blue Coat were to specify the end user of the ordered items.

Computerlinks FZCO provided Blue Coat, the U.S. manufacturer and exporter, with false information concerning the end user and ultimate destination of the items in connection with these transactions. Computerlinks FZCO knew that the items were destined for end users in Syria. However, when placing these orders with Blue Coat, Computerlinks FZCO falsely stated that the ultimate destination and end users for the items was the Iraq Ministry of Telecom (on two occasions) or the Afghan Internet service provider Liwalnet (on one occasion). The items subsequently were shipped to Computerlinks FZCO in the U.A.E. for ultimate delivery to Syria without the required licenses having been obtained.

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