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WASHINGTON –The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) today announced that it will add one individual and one company in United Arab Emirates to the BIS Entity List. The two parties are being added based on evidence that they purchased U.S.-origin internet filtering devices and transshipped the devices to Syria. The same devices have been the subject of recent press reporting related to their potential use by the Syrian government to block pro-democracy websites and identify pro-democracy activists as part of Syria's brutal crackdown against the Syrian people.

“Today’s action is part of an aggressive investigation by BIS's Office of Export Enforcement into the diversion of U.S. technology to Syria. It is vital that we keep technology that can be used to further the repression of the Syrian people out of the hands of the Syrian government,” said Under Secretary for Industry and Security Eric L. Hirschhorn. "This investigation is ongoing and additional enforcement actions are likely."

BIS’s Office of Export Enforcement has obtained evidence that Waseem Jawad, using the company name Infotec, a.k.a., Info Tech, ordered multiple Blue Coat SG9000-20 Proxy devices in December 2010 from a Blue Coat authorized distributor in the U.A.E. That authorized distributor in turn placed an order for the devices with Blue Coat. A December 2010 email notification identified the end-user of the Blue Coat products for this order as the Ministry of Communication (National Telecom), Al Fadi Street, Baghdad, Iraq. In February 2011, the devices were shipped from the United States to the United Arab Emirates, and ownership was transferred to Waseem Jawad, Info Tech, RAKFTZ, U.A.E. Approximately three days later, the devices departed the U.A.E. for delivery to Syria. Several of these devices have been identified by serial number as devices being used by the Syrian Telecommunications Establishment in Damascus, Syria.

The Entity List contains a list of names of certain foreign persons – including businesses, research institutions, government and private organizations, and individuals that have been determined through an interagency review process to have engaged in activities contrary to U.S. national security and/or foreign policy interests. These persons are restricted from receiving items subject to U.S. jurisdiction.

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.

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WASHINGTON – The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced today that FedEx Express (FedEx), Memphis, TN, has agreed to pay a $370,000 civil penalty to settle allegations that it committed six violations of the Export Administration Regulations (EAR) relating to FedEx’s provision of freight forwarding services to exporters.

BIS alleged that on two occasions in 2006, FedEx caused, aided and abetted acts prohibited by the regulations when it facilitated the attempted unlicensed export of electronic components from the United States to Mayrow in Dubai, United Arab Emirates. The exports to Mayrow were thwarted when delivery was halted at BIS’s direction. On June 5, 2006, BIS had issued a General Order imposing a license requirement with a presumption of denial for the export or reexport of any item subject to the EAR to Mayrow General Trading and related entities. The General Order was issued based on information that Mayrow and the related entities were acquiring electronic components and devices that were being used in Improvised Explosive Devices deployed against Coalition forces in Iraq and Afghanistan.

BIS also alleged that in December 2005, FedEx caused, aided and abetted acts prohibited by the regulations when it facilitated the unlicensed export of flight simulation software to Beijing University of Aeronautics and Astronautics, a/k/a Beihang University, an organization listed on the U.S. Department of Commerce’s Entity List and located in the People’s Republic of China. The Commerce Department’s Entity List contains a list of names of foreign persons – including businesses, research institutions, government and private organizations, and individuals – that have been determined through an interagency review process to have engaged in activities contrary to U.S. national security and/or foreign policy interests. These persons are restricted from receiving items subject to U.S. jurisdiction.

Lastly, BIS alleged that on three occasions in 2004, FedEx caused, aided and abetted acts prohibited by the regulations when it facilitated the unlicensed export of printer components from the United States to end users in Syria. Facilitating the export of commodities to Syria without the required U.S. Department of Commerce export license was prohibited under General Order No. 2 as set forth in Supplement 1 to part 736 of the EAR.

The Commerce Department Assistant Secretary for Export Enforcement David W. Mills said, “It is vital that every stakeholder in the U.S. exporting chain remain vigilant in its efforts to prevent prohibited transactions that may be detrimental to our national security, and each will be held accountable if it fails to do so.”

BACKGROUND

BIS controls exports and re-exports 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 EAR. For more information, please visit www.bis.doc.gov.

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WASHINGTON - Xun Wang, a former Managing Director of PPG Paints Trading (Shanghai) Co., Ltd., a wholly-owned Chinese subsidiary of United States-based PPG Industries, Inc., pled guilty today to conspiring to violate the International Emergency Economic Powers Act, announced Ronald C. Machen Jr., U.S. Attorney for the District of Columbia, and Eric L. Hirschhorn, U.S. Department of Commerce Under Secretary for Industry and Security.

Wang, 51, entered the guilty plea before the Honorable Emmet G. Sullivan of the U.S. District Court for the District of Columbia, She faces a maximum sentence of five years of incarceration and a fine of up to $250,000. No sentencing date was set. As part of her plea agreement with the government, Wang has agreed to cooperate with law enforcement.

“At the end of last year, the Chinese subsidiary of a U.S. company pleaded guilty to illegally exporting high-performance coatings for use in a Pakistani nuclear reactor,” said U.S. Attorney Machen. “Today we are pleased to see the former managing director of that subsidiary accept responsibility for her role in the crime. We also welcome the defendant’s decision to cooperate with the government in our ongoing investigation of this blatant violation of U.S. export laws.”

Concurrently, Wang has settled an administrative proceeding brought by the Department of Commerce regarding the same subject matter as her criminal case. As part of her settlement agreement, Wang has agreed to pay a civil penalty of $200,000 with another $50,000 payment suspended, and to be placed on the Department of Commerce's Denied Persons List for a period of five years with an additional five years suspended. As a Denied Person, Wang will be prohibited from directly or indirectly participating in any transaction involving a commodity, software or technology exported, or to be exported, from the United States that is subject to Department of Commerce regulations.

“Today's plea agreement and civil settlement highlight the fact that individuals -- and not just companies -- face the denial of export privileges, fines, and imprisonment for violations of our export control laws," said Under Secretary Hirschhorn. “Our Special Agents will continue to employ our unique authorities to investigate and disrupt illegal procurement and proliferation networks anywhere in the world.”

In both the criminal and administrative cases, Wang is accused of conspiring to export, reexport, and transship high-performance epoxy coatings to the Chashma 2 Nuclear Power Plant (Chashma II) in Pakistan, a nuclear reactor owned and/or operated by the Pakistan Atomic Energy Commission (PAEC), an entity on the Department of Commerce’s Entity List.

The Pakistan Atomic Energy Commission is the science and technology organization in Pakistan responsible for Pakistan’s nuclear program, including the development and operation of nuclear power plants in Pakistan. In November 1998, following Pakistan’s first successful detonation of a nuclear device, the Commerce Department’s Bureau of Industry and Security added the Pakistan Atomic Energy Commission, as well as its subordinate nuclear reactors and power plants, to the list of prohibited end users under the Export Administration Regulations.

As a restricted end-user, a United States manufacturer seeking to export, reexport or transship any items subject to the Export Administration Regulations to the Pakistan Atomic Energy Commission, or its nuclear power plants or reactors, would first need to obtain a license from the Department of Commerce in the District of Columbia.

Wang’s guilty plea is related to the December 21, 2010, guilty plea of PPG Paints Trading to a four-count information in the U.S. District Court for the District of Columbia. Together, PPG Paints Trading and its parent company, PPG Industries, paid $3.75 million in criminal and administrative fines and more than $32,000 in restitution. The combined amount of criminal and civil fines represented one of the largest monetary penalties for export violations in the history of the U.S. Department of Commerce’s Bureau of Industry and Security.

According to Wang’s plea documents, in January 2006, PPG Industries sought an export license for the shipments of coatings to Chashma II. In June 2006, the Department of Commerce denied that license application. Following that denial, Wang and her co-conspirators agreed upon a scheme to export, reexport and transship PPG Industries’ high-performance epoxy coatings from the United States to Chashma II, via a third-party distributor in the People’s Republic of China, without first having obtained the required export license from the Department of Commerce.

The plea documents further allege that from around June 2006 through around March 2007, Wang and her co-conspirators intentionally concealed from PPG Industries that the paint would continue to be delivered to Chashma II. Further, members of the conspiracy stated, or caused to be stated, that the coatings were to be used at a nuclear power plant in China, the export of goods to which did not require a license from the Department of Commerce. Through these means, Wang and her co-conspirators allegedly exported three shipments of coatings from the United States to Chashma 2 without the required Commerce Department license.

In announcing today’s guilty plea, U.S. Attorney Machen and Under Secretary Hirschhorn commended Special Agents James Fuller and Donald Pearce, who worked under the direction of Special Agent in Charge Sidney M. Simon and Assistant Special Agent in Charge Jonathan Carson, as well as Attorney Advisor R. Elizabeth Abraham, all of the Department of Commerce’s Bureau of Industry and Security. They also thanked Assistant U.S. Attorneys G. Michael Harvey and John Borchert of the U.S. Attorney’s Office for the District of Columbia, who prosecuted this matter.

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