Back in April, the Bureau of Industry and Security announced a $45,000 fine imposed on C.A. Litzler Co., Inc., based on an unlicensed export of a 24 Inch Hot Melt Prepreg Machine, which sounds vaguely naughty but is indeed covered by ECCN 1B001.e. The machine (I’m not repeating that name again) was in fact exported in 2005 by Western Advanced Engineering Company (“WAECO”), a company that ceased operations when Litzler acquired its assets in 2011. Under BIS’s “substantial continuity” rule announced in the Sigma-Aldrich decisions, Litzler became liable for WAECO’s export violations. (And that, my friends, is why export due diligence is necessary before any acquisition).

Well, all taxpayers will be delighted to learn that nothing escapes BIS, which has worried itself sick about what to do about WAECO even though WAECO is an empty shell that had ceased all operations once it sold all of its assets to Litzler. So, because WAECO still had a corporate existence on paper, BIS recently announced a settlement agreement imposing a three-year export denial order on WAECO, which denial order was immediately suspended as long as the defunct company committed no further export violations during the next three years.

You never know what kind of trouble a defunct company can get itself into. Why wasn’t it only just a few months ago that TWA got caught trying to sell souvenir junior pilot wing badges to a toy shop in Khartoum?