Regulatory intelligence for US exporters

BIS Fines Telecom Company for Illegal Exports to Vietnam

The Bureau of Industry and Security fined a U.S.-based telecommunications company $1.87 million for illegally exporting goods to Vietnam, BIS said in an Oct. 12 order. California-based VTA Telecom, a subsidiary of a Vietnamese state-owned telecom company, included false statements in its export applications to hide the true end-uses for the exports, BIS said.

Beginning in 2016, BIS said, VTA made false statements to BIS and other U.S. agencies to try to export certain “power amplifiers/JFET transistors” to Vietnam. VTA tried to export the amplifiers, which were controlled under the Export Administration Regulations for national security (NS), regional stability (RS) and anti-terrorism (AT) reasons, by saying they would be used for civil end-uses when they were actually intended for defense end-uses, the order said. BIS approved an export license for VTA to ship 100 transistors and two “development tools” worth about $59,100 “only for the end-use listed in the application.”

A VTA shipment of 12 transistors and two development tools worth about $8,860 was eventually stopped by CBP when the agency requested end-user statements from VTA. BIS said VTA “provided the same false end-user statements” to CBP, and the agency released the hold, allowing the exports to ship to Vietnam.

VTA illegally exported items on several other occasions, including $235,000 worth of certain actuators that were controlled for NS, RS, AT and Missile Technology (MT) reasons. The company gave a U.S. vendor a false end-user statement, which the vendor submitted to BIS, according to the order. In another instance, VTA provided false statements to BIS about nearly $625,000 worth of “mass properties instrument and related equipment” controlled for NS, RS, AT and United Nations embargo reasons.

BIS said it will suspend about $200,000 of the $1.87 million penalty if VTA completes a two-year probationary period outlined in a settlement agreement with BIS or if it dissolves its business. As part of the agreement, VTA agreed to spend $25,000 to improve its “ongoing” export compliance efforts and hire a trade compliance director for two years. If VTA doesn’t pay the fine or violates the agreement, BIS may deny the company’s export privileges.

Kevin Kurland, BIS’s acting assistant secretary for export enforcement, said the agency “will not tolerate exporters that provide false representations related to export regulations and laws.” Richard Weir, special agent in charge of the Office of Export Enforcement’s Los Angeles field office, said “severe penalties await companies that lie about the end-use of the products they export overseas.” VTA Telecom couldn’t be reached for comment.