Israeli Tech Firm Informs BIS of Possible Russia, Belarus Export Violations
An Israeli telecommunications and cybersecurity technology company told the Bureau of Industry and Security that it may have violated export controls against Russia and Belarus.
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Allot, which specializes in network intelligence and security solutions, submitted an initial voluntary self disclosure to BIS earlier this month, the company said in an SEC filing released June 24. The disclosure describes “possible export control violations” involving the “provision of software upgrades and one expansion card to a small number of customers in Russia and our use of subcontractor software engineers in Belarus who accessed certain of our software and technology.”
The company said it has “undertaken remedial steps” to address the issue and is continuing to review the potential violations as it prepares to submit a final disclosure to BIS within 180 days. “Since our review is ongoing, there is a risk that we may identify additional issues related to this matter or additional possible violations that we would disclose to BIS,” Allot said.
The company said it dealt with a similar possible violation over 12 years ago. In that instance, one of its “channel partners” sold Allot products outside of “its contractually designated territory,” including into a sanctioned country. Allot “subsequently determined that our contract management protocol for authorizing channel partner sales was not adequately followed in that instance,” the company said. “Although we are not aware of any channel partner making indirect sales in countries or to persons sanctioned under laws to which we are subject, there is no guarantee that our channel partners will not make such indirect sales in the future.”
The company added: “None of our contracts with channel partners authorize or contemplate any activities with sanctioned countries or sanctioned entities, and we do not intend to authorize any channel partner to engage in activities with those countries and entities in the future.”
Allot also noted that Israel requires companies to obtain export licenses if they’re selling certain encryption products or products that incorporate encryption, “including the encryption embedded in substantially all of our products.” Allot’s previous license expired in March 2023, and the company didn’t renew it. It submitted an export license application to Israel’s Export Control Branch earlier this month to “confirm that our products are exempt from a license requirement.”
License application processing is taking longer than normal because Israeli officials are working remotely due to the “current military situation in Israel,” Allot said. “We cannot provide assurance as to how the Export Control Branch will treat our failure to have renewed our license when it expired, although historically, to our knowledge, there has not been a practice of applying material sanctions for such a failure.”
A BIS spokesperson didn't respond to a request for comment.