FedEx to Pay $370K to Settle BIS Allegations of EAR Violations

January 6, 2012 by Elizabeth Parker|Penalties and Courts

The Bureau of Industry and Security has announced that FedEx Express has agreed to pay a $370,000 civil penalty to settle allegations that it committed six violations of the Export Administration Regulations (EAR) relating to FedEx’s provision of freight forwarding services to exporters for unlicensed exports.

Alleged FedEx Facilitated Unlicensed Exports to UAE, China & Syria

BIS alleged FedEx caused, aided and abetted acts prohibited by the regulations when it facilitated the attempted unlicensed export of:

Electronic parts to Mayrow in UAE -- electronic components from the U.S. to Mayrow General Trading in Dubai, United Arab Emirates on two occasions in 2006. In June 2006, BIS had issued a General Order imposing a license requirement with a presumption of denial for the export or reexport of any item subject to the EAR to Mayrow and related entities. The General Order was issued based on information that Mayrow and the related entities were acquiring electronic components and devices that were being used in Improvised Explosive Devices (IEDs) deployed against Coalition forces in Iraq and Afghanistan. (See ITT's Online Archives 06060925 and 06091120 for summaries.)

Flight simulation software to Chinese university on Entity List -- flight simulation software to Beijing University of Aeronautics and Astronautics in 2005. The Beijing University is an organization located in China and listed on the Commerce Department’s Entity List. The Entity List contains a list of names of foreign entities that have been determined to have engaged in activities contrary to U.S. national security and/or foreign policy interests. These persons are restricted from receiving items subject to U.S. jurisdiction. (See ITT's Online Archives 05092030 and 10121718 for summaries.)

Printer parts to end-users in Syria -- printer components from the U.S to end-users in Syria on three occasions in 2004. Facilitating the export of commodities to Syria without the required Commerce Department export license was prohibited under General Order No. 2 as set forth in Supplement 1 to part 736 of the EAR.

(Note that in November 2011 FedEx and the Commerce Department partnered to pilot the Global Buyers Initiative, which is designed to help U.S. small- and medium-sized businesses reach more markets and sell more products and service overseas. FedEx is also a partner in the Department's New Market Exporter Initiative to help exporters expand to new international markets. See ITT's Online Archives 11111445 and 10120728 for summaries.

FedEx is also participating in U.S. Customs and Border Protection's Simplified Entry pilot in the Automated Commercial Environment (ACE), which is intended to expedite the entry process by requiring fewer entry data. See ITT's Online Archives 11120915 for summary.)