what are common mistakes made by companies and individuals involved in export co
ID: 363157 • Letter: W
Question
what are common mistakes made by companies and individuals involved in export controls as indicate in the preceding examples?
Should ASE 2 U.S. Export Controls The following are real-life examples of export control violations taken directly from the U.S. Bureau of Industry and Security (BIS) publication "Don't Let This Happen to You. Introduction: The Weatherford violations were noteworthy because the company received the largest civil penalty the BIS has ever levied. The company was doing so many things wrong that multiple agencies, including the BIS, the Office of Foreign As- sets Control, and the Securities and Exchange Commission, were involved in the final penalties assessed (over $250 million). The Violation: From 1998 through 2007, Weatherford International and four of its subsidiaries-Weatherford Oil Tools Middle East, Weatherford Production Optimiza- tion (UK) Limited, Precision Energy Services ULC (Canada) and Precision Energy Ser- vices Columbia Limited-engaged in conduct that violated various U.S. export control and sanctions laws by exporting or re-exporting EAR99 oil- and gas-drilling equip- ment to, and conducting Weatherford business operations in, sanctioned countries without the required U.S. government authorization. In addition to the involvement of employees of several Weatherford International subsidiaries, some Weatherford In- ternational executives, managers, or employees on multiple occasions participated in directed, approved, and facilitated the transactions and the conduct of its various sub sidiaries. This conduct involved persons within the U.S.-based management structure of Weatherford International participating in conduct by Weatherford International foreign subsidiaries and the unlicensed export or re-export of U.S.-origin goods to Cuba, Iran, Sudan, and Syria. Weatherford subsidiaries Precision Energy Services Co lombia Ltd. and Precision Energy Services ULC (formerly known as Precision Energy Services Ltd.), both headquartered in Canada, conducted business in Cuba. Weath 5Explanation / Answer
If you read the cases above, all of them have one thing in common - they involve the export of goods which are critical to a nation's integrity: Oil, military grade electronic equipment, computers, etc. These are equipment/commodities which drive a nation and can put a nation's entire security at risk. Let us look at each of the companies individually:
Weatherford Group: The weatherford group has a group of companies (subsidiaries) and are mainly involved in the trade of oil/gas drilling equipment. What the group did was illegal - They exported oil to countries with embargoes/trade sanctions - Such as Cuba, Syria, Iran and Sudan. The U.S. Government had imposed sanctions on these countries owing to the civil unrest in these countries and companies are not supposed to trade with these countries. However, the Weatherford group had broken this code and traded with them, all for an extra source of revenue
Assi Case: The Assi case was a clear case of near treason - It had again gone against the nation's security by providing military grade equipment such as night vision goggles to a terrorist organization. This puts the entire nation's security at risk
Corezing case: This is a classic case where an organization used a second country to route equipment to a sanctioned country. What they did was, the trans-shipped it from Singapore to Iran, in parts, so that they would not need all the required licenses which are generally required. They even shipped it through a freight forwarder in parts, so that the authorities would never realise what the whole product was! Again, flouting the rules blatantly
Md. Reza Case: Similar case to the computer export case explained above. They routed the export of sophisticated computer export through a second country, the UAE, to embargoed countries. Again, putting the entire nation's security at risk.
Timothy Case: This was a severe violation of the country's rules, where military grade equipment were shipped with altered paperwork so that all the necessary license work which would be needed could be bypassed and they could be shipped to other countries. It is important to realise that military tech in the hands of adversaries can result in devastating consqeunces in the event of a war.
Clearly, in all the above cases, organizations have taken an easy way out to bypass the set processes to make more money. As you can see, the market for military equipment/trade economy to embargoed countries/war economy is huge. Organizations are clearly ready to do anything for that extra stream of revenue.
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