On 17 April 2015, the US District Court in Houston, Texas, unsealed an indictment that charges four corporations and five individuals with a scheme to facilitate illegal exports from the United States to Iran by concealing the ultimate destination of the exported items.
According to the US Justice Department’s announcement, Smart Power Systems Inc. (“Smart Power”) would acquire the commodities—including high-tech electronics, uninterruptible power supplies, and other items—in the United States and send them to Hosoda Taiwan Limited Corporation (“Hosoda”) in Taiwan. Hosoda would ship the items to Golsad Istanbul Trading Ltd. (“Golsad”) in Turkey, which would then forward them to Faratel Corporation (“Faratel”) in Iran. Five individual defendants, based in the United States, Taiwan and Turkey, are alleged to control Smart Power, Hosoda and Golsad and are also accused of facilitating this scheme.
If convicted, the individual defendants could face a maximum of 20 years in federal prison and a fine of up to $100,000 on each of the 24 counts of the indictment. Each corporate defendant could face a maximum fine of $1 million for each count.
In addition, the US Commerce Department added to the Entity List eight non-US individuals and entities that allegedly facilitated the illegal exports. The designees include Hosoda, Golsad, Faratel and individuals associated with them, as well as a company based in mainland China that is not named as a defendant in the criminal case. All exports, reexports, and transfers to those persons of items subject to the Export Administration Regulations (EAR) now require a licence from BIS, which will ordinarily deny applications for such licences.