California Data Company Committed Antiboycott Violations, BIS Says

The Bureau of Industry and Security reached a $151,875 settlement with Quantum Corp., a California-based data storage and management company, after it allegedly committed 45 violations of the antiboycott provisions of the Export Administration Regulations.

Between July 2018 and December 2019, BIS said the company received 45 requests from its customer, a distributor based in the United Arab Emirates, to “refrain from importing goods of Israeli origin into the UAE in fulfillment of purchase orders” from the UAE customer. Quantum Corp. failed to report those boycott requests to BIS, the agency said.

BIS noted that Quantum Corp. voluntarily disclosed the alleged violations, cooperated with the BIS investigation and put in place “remedial measures after discovering the conduct at issue,” which led to a “significant reduction in penalty.”

The settlement “highlights how important it is that companies ensure their antiboycott compliance programs reach all the way throughout their organizations,” said Matthew Axelrod, the BIS assistant secretary for export enforcement. “A company with foreign subsidiaries, distributor agreements, or other contractual relationships in boycotting countries has extra work to do to amplify awareness of the antiboycott regulations among their foreign partners.”

If the company doesn’t pay the fine, BIS said, it may revoke its export privileges for one year.

Quantum Corp. didn’t immediately respond to a request for comment.

The penalty is the fourth BIS enforcement action this year for antiboycott-related violations. The agency has fined a Pennsylvania-based manufacturer of portable lighting products (see 2408260038), a Texas-based affiliate of Airbus (see 2406030061), and a U.S. rail technology manufacturer and supplier (see 2401300047).