Bureau of Industry and Security (BIS)

  • On August 12, BIS entered into a Settlement Agreement with Walter Anders and Terand, Inc. to settle eight (8) violations of the Export Administration Regulations (EAR). In 2012, Terand/Anders caused, aided, and/or abetted the export of 6,557 kg of U.S.-origin T300 carbon fiber to Singapore without the required BIS licenses. This product is controlled for nuclear proliferation reasons. Both parties have been denied export privileges for a period of eight (8) years.
  • On August 19, BIS issued a final rule in the Federal Register extending the Temporary General License for ZTE Corporation and ZTE Kangxun until November 28, 2016. Both entities were added to the Entity List on March 8, 2016.
  • On August 22, BIS entered into a Settlement Agreement with Spectrolab of Sylmar, California to settle one (1) violation of the Export Administration Regulations (EAR). In 2014, Spectrolab sold and transferred a Large Area Solar Simulator (LAPSS II) to Pakistan, knowing or having reason to know, that the intended user was Pakistan’s Space and Upper Atmosphere Research Commission (SUPARCO), which was listed on BIS’ Entity List. The company did not obtain a license for the export. Spectrolab was assessed a civil penalty of $90,000.

Department of Justice (DOJ)

  • On August 19, the department issued a press release announcing the sentencing of Wenxia Man (aka Wency Man) of San Diego to 50 months in prison for conspiring to export and causing the export of fighter jet engines, an unmanned aerial vehicle, and related technical data to the People’s Republic of China.

Office of Foreign Assets Control (OFAC)

  • On August 2, OFAC issued a Finding of Violation to AXA Equitable Life Insurance Company for violations of the Foreign Narcotics Kingpin Sanctions Regulations (FNKSR). Separately, on the same day, OFAC also issued a Finding of Violation to Humana, Inc., the parent company of Kanawha Insurance Company, also for violations of the FNKSR.
    • AXA issued health insurance coverage to three individuals in 1992. In 2009, these same three persons were placed on the List of Specially Designated Nationals and Blocked Persons (SDN) pursuant to the FNKSR. AXA and its Third Party Administrator (TPA) failed to identify this and, as a result, both companies did not block the policies and their premium payments. The situation came to light in 2011 when a new TPA was installed and identified the individuals as designated.
    • In the second finding, OFAC found that Kanawha facilitated and/or processed 34 payments totaling $14,406.19, and serviced two health insurance policies in which one or more SDNs had an interest.
    • In both cases, OFAC took into consideration that no company personnel, including managers or supervisors, appeared to have had actual knowledge of the conduct that led to the violations; both had not received a penalty notice or Finding of Violation from OFAC relating to substantially similar violations in the five years preceding the date of the conduct giving rise to the violations; and each cooperated with OFAC’s investigation.
  • On September 1, OFAC updated its List of Specially Designated Nationals and Blocked Persons (SDN), adding 37 individuals and entities for sanctions evasion and activities related to Ukraine. It also added 96 entities determined to be 50 percent or more owned by one of three companies listed on the Sector Sanctions Identification List (SSIL). These are the Bank of Moscow, Gazprombank, and Gazprom.

Securities and Exchange Commission (SEC)

  • One August 11, the SEC announced Houston-based Key Energy Services agreed to pay $5 million in disgorgement to settle charges that it violated the Foreign Corrupt Practices Act (FCPA). According to the SEC’s press release, the violations arose from payments its Mexican subsidiary, Key Mexico, made to a contract employee at Petróleos Mexicanos (Pemex), Mexico’s state-owned oil company. In determining to accept the offer, the SEC took into consideration the company’s cooperation, remedial efforts, and current financial condition.