Number range CHAPTER02/2003

**DON\'T LET THIS HAPPEN TO YOU!!!**

**SILICON GRAPHICS, INC.**

On January 6, 2003, Silicon Graphics, Inc. (SGI) of Mountain View,
California pled guilty to two felony charges that it violated Commerce
Department regulations by illegally exporting high performance computers
to a Russian nuclear laboratory in 1996. SGI agreed to pay a \$1 million
criminal fine to resolve the charges. In a related administrative case,
SGI agreed to pay \$182,000 to settle civil charges arising from the
same exports to the Russian nuclear laboratory, as well as additional
charges relating to illegal computer exports to Israel and for failure
to meeet reporting requirements for exports to China, Qatar, and the
United Arab Emirates. The \$182,000 was the maximum civil penalty for
the charges that BIS had proposed to bring against SGI.

As part of the settlement of the criminal charges, SGI admitted that, on
two occasions in 1996, the company exported four Challenge L computer
systems, upgrades, and peripheral equipment to the All-Russian Institute
for Technical Physics (Chelyabinsk-70) in violation of the U. S. export
control regulations. Chelyabinsk-70, located in Snezhinsk, Russia, is a
nuclear laboratory operated by Russia's Ministry of Atomic Energy and is
engaged in research, development, testing, and maintenance of nuclear
devices.

In addition to the monetary penalties, the civil settlement agreement
provided that SGI's exporting privileges to Russia will be deniedfor a
period of three years. The denial of export privileges will be suspended
providing that SGI does not commit any export control violations
involving Russia during the suspension period. SGI also agreed to
limitations on its use of license exception CTP and to additional
reporting requirements.

**REALTEK SEMICONDUCTOR CORPORATION**

On December10, 2002, the Commerce Department imposed a \$44,000 penalty
and a two year denial of export privileges on Realtek Semiconductor
Corporation (Realtek), Hsinchu, Taiwan, to settle allegations that he
company violated the Export Administration Regulations (EAR). An
investigation by the Boston Field Office revealed that on or about
December 11, 1996, Realtek purchased commercial air-conditioning
equipment from a U. S. manufacturer, in violation of a five year Denial
Order issued against Realtek on August 3, 1995. Additional investigation
disclosed that on or about December 6, 1999, Realtek attempted to
purchase U. S. origin computer software, by signing a Master Software
Licensing Agreement, and a Master Software Maintenance Agreement with a
Massachusetts based corporation. At the time of these violations,
Realtek was also subject to the denial order, and as a result, could not
receive U. S. origin commodities or enter into a purchase agreement to
purchase U. S. origin commodities.

**STURM, RUGER AND COMPANY,INC.**

On November 8, 2002, the Commerce Department imposed a civil penalty of
\$11,000 on Sturm, Ruger and Company, Inc., Southport, Connecticut, to
settle an allegation that the company exported rifle scopes to Oman,
without the required export license. At the time, the scopes were
controlled for export under ECCN 0A985 for Crime Control reasons.

**SIGMA-ALDRICH CORPORATION**

On November 4, 2002, the Sigma-Aldrich Corporation, St. Louis, Missouri
and two of its subsidiaries, agreed to pay a \$1.76 million civil
penalty to settle charges involving the illegal export of biological
toxins. The settlement was reached after a significant legal ruling in
the Commerce Department's favor by an administrative law judge
adjudicating the dispute.

The penalty is the largest imposed by the Commerce Department in a case
involving biological toxins, and one of the largest penalties ever paid
to the Department for export control violations. The Department had
instituted administrative enforcement actions against the Sigma-Aldrich
companies alleging that a company they had acquired in 1997 had made
unauthorized exports of controlled biological toxins to Europe and Asia
on numerous occasions prior to the acquisition and had continued the
unlicensed exports for more than a year after the acquisition. In a 15
page opinion, an administrative law judge held that companies can be
held liable for export control violations that have been committed by
firms they acquired.

**Digital Equipment Corporation**.

On October 29, 2002 the Department of Commerce imposed a \$39,000 civil
penalty on Compaq Computer Corporation of Houston, Texas. The penalty
was part of an agreement reached by the Department and Compaq to settle
allegations that Digital Equipment Corporation now merged with and into
Compaq, and two of its overseas subsidiaries violated U.S. export
control laws in connection with the export of computers and computer
equipment to various destinations in Asia, including the People's
Republic of China (PRC).

The Department's Bureau of Industry and Security (BIS) alleged that
Digital Equipment Corporation and its subsidiaries violated the Export
Administration Regulations on ten occasions by exporting or reexporting
computers and computer equipment without the required authorizations
from BIS. Exports of these commodities were destined for South Korea.
Reexports of the U.S-origin goods were made from Hong Kong to the PRC
and from Singapore to India.

**Hans Wrage & Company**

On August 29, 2002, the Department of Commerce imposed a \$30,000 civil
penalty on Hans Wrage & Co. (Wrage) of Hamburg, Germany, to settle
allegations that Wrage violated U.S. export laws by reexporting
U.S.-origin shotguns from Germany to Poland without the required
authorization from the U.S. government.

The Department's Bureau of Industry and Security (BIS) alleged that on
three occasions between October 1996 and September 1998, Wrage shipped a
total of 1,550 shotguns, originally acquired from a U.S. manufacturer,
to Poland without obtaining the required authorization from BIS. At the
time of the shipments, U.S. Export Administration Regulations required a
license for exports andreexports to Poland of shotguns with a barrel
length of 18 inches but less than 24 inches.

**THOMPSON/CENTER ARMS CO., INC.**

On May 8, 2002, the Commerce Department imposed a \$25,000 civil penalty
on Thompson/Center Arms Co., Inc., Rochester, New Hampshire to settle
allegations that the company exported rifle and pistol scopes to
Argentina, the Czech Republic, and Switzerland without the required
export licenses. A portion of the penalty, \$112,500, was suspended and
will be waived after one year, provided the company does not commit any
violations during the one year period.

**JABAL DAMAVAND GENERAL TRADING**

In April 1998, Jabal Damavand General Trading Company, Ltd., located in
Dubai, purchased a ferrology analysis system, valued at \$435,000, from
a Massachusetts' manufacturer. Prior to exporting the equipment, the
manufacturer obtained written end user statements from Jabal assuring
that the products were to be used in Dubai. The equipment was then
exported to Dubai and tested by an employee, who noted what he believed
to be suspicious behavior on the part of the Jabal representatives and
reported the incident to his management. The manufacturer again asked
Jabal to confirm the end-user and final destination of the equipment and
was again advised that the equipment would be used only in Dubai. A
short time later the manufacturer received a fax from an Indian firm
requesting spare parts for the ferrology analysis system which had been
purchased from Jabal and imported into Iran. Themanufacturer reported
this incident to the Department of Commerce, OEE, Boston, Massachusetts.
This incident was subsequently investigated by OEE's Boston Field
Office, which confirmed that Jabal had violated the Export
Administration Regulations and resulted in an administrative case that
led to a penalty of the denial of Jabal's export privileges for ten
years.

**NORTH CENTRAL PLASTICS, INC., NOW OWNED BY WATERS INSTRUMENTS, INC.**

On March 14, 2002, the Commerce Department imposed a \$186,000 civil
penalty on waters Instruments, Inc. of Minneapolis, Minnesota. The
Department had charged that, on 19 occasions between August 1996 and
July 2000, North Central Plastics, Inc. now owned by Waters Instruments,
Inc., exported electric cattle prods to Argentina, Honduras,
Switzerland, Taiwan, Columbia, Ecuador, Ireland, and Mexico, without the
required export licenses. The Department also alleged that North Central
Plastics committed 12 additional EAR violations by knowingly continuing
transactions without an export license. The Department agreed to suspend
\$26,000 of the \$186,000 penalty. Payment of the suspended amount will
be waived after two years, provided that Waters Instruments, Inc. does
not commit any violations of the EAR during the suspension period. The
shipment of electric cattle prods to most destinations is subject to
export licensing requirements for foreign policy reasons in order to
promote the observance of human rights throughout the world.

**NEOPOINT, INC.**

In February of 2002, the Bureau of ExportAdministration imposed a
\$95,000 civil penalty on Neopoint, Inc., of San Diego, California, to
settle charges that on ten occasions between March 1998 and June 1999,
the company exported 128-bit encryption software to South Korea without
the requisite export licenses.

**ELI COHEN**

On January 30, 2002, the Commerce Department imposed a \$10,000 civil
penalty, and a five year denial of export privileges, on Eli Cohen of
Haifa, Israel, pursuant to a settlement agreement. The Department\'s
Bureau of Export Administration (BXA) had alleged that Cohen had
concealed an illegal transfer of an infrared camera from BXA agents.
According to BXA\'s charging letter, Eli Cohen provided false and
misleading information to Special Agents of BXA\'s Office of Export
Enforcement concerning the camera\'s location when the agents sought to
verify its end-use in Israel. The camera is capable of locating objects
in day, night or adverse weather conditions, because of its ability to
detect radiating heat. The camera was shipped to Israel under a BXA
export license that authorized its use only by the company named on the
license, but was then illegally transferred. BXA controls the export of
this type of camera for national security reasons because of its
potential application in military surveillance.

**BS&B PROCESS SYSTEMS**

BS&B Process Systems Inc. settled charges that on or about April 15,
1996, on or about May 5, 1997, and on or about February 5, 1998, BS&B
Process Systems, Inc. exported oil production equipment from the United
States to Iran, through the United Kingdom, without obtaining the
authorization it knew or had reason to know was required,
therebycommitting violations of Sections 764.2(a) and 764.2(e) of the
Regulations, and that in connection with the export to Iran on or about
May 5, 1997, BS&B Process Systems Inc. prepared a Shipper\'s Export
Declaration stating that the ultimate destination of the export was the
United Kingdom, when in fact the ultimate destination was Iran, thereby
making a false or misleading representation directly or indirectly to a
U.S. Government agency in connection with the preparation of an export
control document in violation of Section 764.2(g) of the Regulations,
and that, in connection with the export to Iran on or about February 5,
1998, BS&B Process Systems, Inc. failed to prepare the required SED,
thereby violating Section 764.2(g) of the Regulations.

On January 17, 2002, BS&B Process Systems Inc. was sentenced in federal
court in Tulsa, Oklahoma for violating the International Emergency
Economic Powers Act for making an unauthorized export to Iran. The
company agreed to pay a criminal fine of \$414,000 and a \$400 special
assessment. The company agreed to pay the Commerce Department an
additional fine of \$86,000 to settle administrative charges brought
against it. The company also agreed that its export privileges would be
suspended for three years, with all three years suspended provided it
commits no further violations during this period.

Black Sivalls & Bryson (UK) Ltd., a company affiliated with BS&B Process
Systems Inc., also settled charges that on or about April 15, 1996, on
or about May 5, 1997, and on or about February 5, 1998, Black Sivalls &
Bryson (UK) Ltd., a United Kingdom corporation, received oil production
equipment in the United Kingdom that it knew or had reason to know BS&B
Process Systems, Inc., had exported from the United States without the
required authorization, and forwarded the items to Iran, thereby
violating Section 764.2(e) of the Regulations.

On January 17, 2002, Black Sivalls & Bryson (UK) Ltd. was sentenced in
federal court in Tulsa, Oklahoma for violating the International
Emergency Economic Powers Act, 50 U.S.C Appendix Section 1702 et seq,
for making an unauthorized export to Iran. The company agreed to pay a
criminal fine of \$448,000 and a special assessment of \$400. The
company agreed to pay the Commerce Department an additional \$52,000 to
settle administrative charges brought against it. In addition, the
company agreed that its export privileges would be denied for three
years, with two years of the denial suspended provided the company
commits no further violations during this period.

**KAISER ALUMINUM & CHEMICAL CORPORATION**

On December 28, 2001, the Commerce Department imposed a \$210,000 civil
penalty on Kaiser Aluminum & Chemical Corporation of Houston, Texas, to
settle charges that it illegally exported sensitive items without
Department of Commerce authorization.

The agreement settled allegations that, between February 1996 and March
1999, Kaiser made 12 shipments of potassium fluoride to Jamaica and 10
shipments of high-strength aluminum rod to Israel and Taiwan without the
required Department of Commerce export licenses. Potassium fluoride is a
precursor for the production of toxic chemical agents. High-strength
aluminum rod can be used to manufacture equipment for the enrichment of
uranium. The Department of Commerce controls the export of these items
to prevent the proliferation of weapons of mass destruction.

Kaiser voluntarily disclosed the unlicensed exports of potassium
fluoride but not the shipments of the aluminum rod, and cooperated fully
in the investigation. As part of thesettlement, \$45,000 of the penalty
was suspended.

**LION PRECISION**

On December 20, 2001, the Commerce Department imposed a \$52,500 civil
penalty on Automated Quality Technology, doing business as Lion
Precision, of Shoreview, Minnesota. The penalty settles allegations that
the company illegally exported measuring probes on seven occasions
between June 1996 and December 1997, to Singapore, Taiwan, and Thailand.
A portion of the penalty, \$42,500, was suspended for two years and will
be waived, provided that the company does not commit any violations
during this period. The probes that were exported were high performance
devices, capable of precise measurements in the construction of military
equipment. The Commerce Department's Bureau of Export Administration
controls the export of these items for nuclear nonproliferation and
national security reasons.

**MCDONNELL DOUGLAS**

On November 14, 2001, the Department of Commerce imposed a \$2.12
million civil penalty against McDonnell Douglas Corporation of St.
Louis, Missouri, as part of a settlement of charges that the company
violated federal export control laws. The penalty was the maximum fine
possible for the alleged violations and was the second-largest civil
fine ever imposed by the Commerce Department in an export control case.

The Order imposing the penalty concluded a six-year investigation into
exports of machine tools to China between 1994 and 1995. The Department
alleged that McDonnell Douglas submitted license applications containing
false and misleading statements about the end-use andend-user of the
machine tools. The Department also alleged that the exports violated the
conditions of U.S. export licenses issued to the company.

In addition to the civil penalty, the Order and settlement agreement
require that McDonnell Douglas\' parent company, The Boeing Company,
assume responsibility and liability for all exports under the Commerce
Department\'s jurisdiction made or to be made by McDonnell Douglas.

In a related case concluded in May 2001, the Department had imposed a
\$1.32 million civil penalty and a denial of export privileges on a
group of Chinese government-owned companies and their U.S. affiliates
that had received the machine tools from McDonnell Douglas.

**DETECTOR ELECTRONICS**

On November 8, 2001, the Commerce Department imposed a \$15,000 civil
penalty on Detector Electronics Corporation of Minneapolis, Minnesota.
The penalty settled allegations that the company exported U.S.-origin
ultraviolet fire detection systems to India on two occasions between
November and December 1998, without the required Department of Commerce
export licenses. The goods were exported to Bharat Heavy Electrical
Limited, an organization on the Entity List.

**FLUOROWARE, INC., NOW OWNED BY ENTEGRIS, INC.**

On October 22, 2001, the Commerce Department imposed a \$496,000 civil
penalty on Entegris, Inc., of Chaska, Minnesota. TheDepartment had
charged that , on 124 occasions between February 1996 and December 1998,
Fluoroware, Inc., now owned by Entegris, Inc, exported diaphragm valves
and components to the People's Republic of China, Israel, and Taiwan
without the required Department of Commerce export licenses. The
Department agreed to suspend \$96,000 of the \$496,000 penalty. Payment
of the suspended amount will be waived after one year, provided that
Entegris does not violate either the Export Administration Act or the
Export Administration Regulations or fail to meet other conditions of
the Department's order imposing the civil penalty. The Department's
Bureau of Export Administration controls the export of valves such as
these and their components because of their ability to be used in the
manufacture of chemical weapons.

**THANE-COAT, INC. ET AL.**

On May 5, 1997, BXA's Assistant Secretary for Export Enforcement issued
a Temporary Denial Order (TDO) denying all U.S. export privileges of
Thane-Coat, Inc., of Stafford, Texas; its president, Jerry Vernon Ford;
its vice-president, Preston John Engebretson; and two affiliates, Export
Materials, Inc., of Stafford Texas, and TIC, Ltd., of Freeport, The
Bahamas. BXA took this action based on evidence that, between 1994 and
1996, Thane-Coat, Inc., through Ford and Engebretson, and using Export
Materials, Inc. and TIC, Ltd., made approximately 100 shipments of
U.S.-origin pipe coating materials, machines, and parts valued at \$35
million to Libya via the United Kingdom and Italy, without the
authorizations required under U.S. law. BXA became aware of the
shipments as a result of a joint investigation conducted by the Office
of Export Enforcement's Dallas, Texas Field Office, the U.S. Customs
Service, and the U.S. Attorney's Office in Houston, Texas.

The U.S.-origin commodities that were shipped to Libya were for coating
the internal surface ofprestressed concrete cylinder pipe for use in the
Government of Libya's Great Man-Made River Project. This is a
multi-phase, multi-billion dollar engineering endeavor designed to bring
fresh water from wells drilled in southeast and southwest Libya to its
coastal cities. The United States Government maintains a comprehensive
economic sanctions program against the Government of Libya that
prohibits virtually all commercial transactions involving U.S.-origin
commodities or services of U.S. persons, or both, with the Government of
Libya, unless specifically authorized.

The respondents to the Administrative Law Judge for relief from the TDO
but were unsuccessful. They then challenged the TDO in the U.S. District
Court in Houston, Texas. The Court upheld the TDO. BXA renewed the TDO
with certain modifications.

On July 12, 1999, BXA's Under Secretary issued an order affirming the
Administrative Law Judge's recommended decision and order of June 11,
1999. The Under Secretary imposed a 20-year denial of export privileges
on two of Thane-Coat Inc.'s affiliates, Export Materials, Inc., of
Stafford, Texas and TIC, Ltd., of Freeport, The Bahamas, for their
involvement in the conspiracy. In a separate proceeding, BXA's Assistant
Secretary for Export Enforcement renewed the TDO as to Thane-Coat, Inc.,
Jerry Vernon Ford, and Preston John Engebretson. This TDO was renewed
periodically.

On April 26, 2000, a federal grand jury in Houston, Texas, returned a
39-count criminal indictment against Thane-Coat, Inc., Jerry Vernon
Ford, Preston John Engebretson, Eshbach Ltd., and TAM Ltd. The
indictment against Thane-Coat, Inc., Ford, Engebretson, Eshbach Ltd.,
and TAM Ltd. charged the defendants with conspiracy, false statements,
unauthorized exports, money laundering, and criminal forfeiture
regarding the export ofconcrete pipe coating materials, spray machines
and parts valued at over \$20 million to the Great Man-Made River
Project in Libya.

On August 8, 2001, a superseding criminal information was filed by the
U. S. Attorney's Office, Houston, Texas charging Jerry Vernon Ford and
Preston John Engebretson each with one count of violating the
International Emergency Economic Powers Act (50 U.S.C. Appendix, Section
1701 et seq.) by making unauthorized exports to Libya. On October 11,
2001, Ford and Engebretson pled guilty in U.S. District Court to one
count each of violating the International Emergency Economic Powers Act
by exporting pipe coating materials to Libya. Ford and Engebretson each
received three years probation and each was required to forfeit property
that previously had been seized by the government and was valued at
\$800,000.

In settlement of administrative charges, on January 24, 2002, BXA's
Assistant Secretary for Export Enforcement imposed a \$1.12 million
civil penalty on Thane-Coat, Inc. Thane-Coat's export privileges, as
well as those of the company's president, Jerry Vernon Ford, and its
vice-president, Preston John Engebretson, also were denied for a period
of 25 years. BXA alleged that these parties committed 112 violations of
the Export Administration Regulations, including conspiracy, failing to
obtain the required BXA export licenses, and making false
representations on Shipper's Export Declarations. Thane-Coat, Inc. was
required to pay \$600,000 of the penalty within 90 days of the date of
the order. Payment of the remaining \$520,000 was suspended for two
years and will be waived provided that Thane-Coat does not commit any
violations during the two year period**.**

**ANSIMAG, INC., A SUBSIDIARY OF THE SUMNER CORPORATION**

On September 19, 2001, the Commerce Department imposed a \$75,000 civil
penalty on The Sumner Corporation, of Evanston, Illinois. The penalty
settled allegations that Ansimag, Inc., a subsidiary of The Sumner
Corporation, had, between October 1995 and January 1998, illegally
exported centrifugal pumps on 15 occasions to Israel and Taiwan. The
Commerce Department's Bureau of Export Administration controls these
specific centrifugal pumps because of their ability to be used in the
development of chemical weapons.

**PARS COMPANY, INC.**

On September 4, 2001, Pars Company, Inc. plead guilty to exporting two
STX Gas Monitors to Iran through the United Arab Emirates without the
required U.S. Department of Commerce license, in violation of the
International Emergency Economic Powers Act. As a result of the plea,
Pars Company, Inc. was ordered to pay a \$10,000 criminal fine.

**FJ TECHNOLOGY, INC.**

On July 3, 2001, Zhongda "Mark" Jin and FJ Technology, Inc., of San
Jose, CA were indicted for the illegal export and conspiracy to
illegally export chemicals to the People\'s Republic of China. An Arrest
Warrant has been issued for Zhongda Jin, who has fled the U.S. and is
believed to be in the People\'s Republic of China.

On July 31, 2001, the Commerce Department denied the export privileges
of FJ Technology and Mark Jin also known as Zhongda Jin for a period of
25 years.

**SAEED HOMAYOUNI/YEW LENG FUNG/MULTICORE, INC.**

On June 11, 2001, Saeed Homayouni and Yew Leng Fung, officials of
Multicore, Inc. of Bakersfield, California, pleaded guilty in U.S.
District Court, in San Diego in connection with the firm\'s purchase of
commercial and military aircraft parts and missile components, for
export to Iran. Homayouni pleaded to a charge of conspiracy to violate
the Arms Export Control Act and the International Emergency Economic
Powers Act. Fung pleaded guilty to misprision of a felony. On September
4, 2001, Homayouni was sentenced to two years imprisonment and Fung was
sentenced to time served (ten months). Fung was transferred to the
custody of the Immigration and Naturalization Service to begin
deportation proceedings.

**IMMEDIATE CUSTOMS SERVICE INC.**

On June 6, 2001, the Commerce Department imposed a \$30,000 civil
penalty against Immediate Customs Service Inc., an international freight
forwarder and customs broker. The civil penalty was based on a finding
that on four occasions, Immediate Customs Service engaged in export
transactions with a person whose U.S. export privileges had been denied.
The denied person, Cosmotrans AG, was a Swiss based customs broker that
had its export privileges denied for 20 years in 1988 based on a
Department of Commerce finding that it illegally diverted electronic
test equipment, controlled for national security reasons, to the former
Soviet Union.

The penalty on Immediate Customs Service was imposed after a hearing
before an administrative law judge and review by the BXA Under
Secretary. The Under Secretary ordered that Immediate Customs pay
\$10,000 of the fine and suspended payment of the remaining \$20,000.

**COLLIN XU / YI YAO / LION PHOTONICS**

On March 9, 1999, a grand jury in Boston returned an indictment charging
Collin Xu, Yi Yao, Lion Photonics, of Montreal, Canada, and Lion
Photonics, of Beijing, China, with illegally exporting fiber optic
gyroscopes to China, via Canada. The investigation disclosed that the
defendants falsely described the exported items as fiber sensors for
optical communication and listed Canada as the country of ultimate
destination. On November 9, 2000, Xu pled guilty to a conspiracy to
violate the Arms Export Control Act and was sentenced to 30 months in
prison and 36 months supervised release. On February 1, 2001, Yi also
pled guilty to a conspiracy to violate the Arms Export Control Act and
was sentenced on April 10, 2001, to 30 months in prison and 36 months
supervised release.

**IMMUNOSTICS INC.**

On September 17, 1999 Immunostics Inc., of Ocean, NJ, a manufacturer and
distributor of medical test equipment including microbiological,
serological and immunological reagents, pleaded guilty in U.S. District
Court, Newark, NJ to a Criminal Information charging said firm with
providing fraudulent export documents to both the U.S. Department of
Commerce and the U.S. Customs Service. The plea was entered by Kenneth
Kupits, Immunostics\' president and chief executive officer, on behalf
of the corporation, before District Judge William G. Bassler.

On February 14, 2000 Judge Bassler sentenced Immunostics to five years
probation and imposed a \$60,000 criminal fine.

A two year investigation by the, Office of Export Enforcement\'s New
York Field Office and the U.S. Customs Service, Newark, NJdisclosed that
on more than 80 occasions, Immunostics supplied foreign customers in 17
different countries, with two commercial invoices for a particular
shipment. One such invoice accurately reflected the cost of product and
was directly sent to the customer for purposes of payment. A false
invoice and corresponding Shipper\'s Export Declaration, reflecting a
substantially lower cost of product was submitted in connection with the
export, to be filed with the United States Customs Service and the
Department of Commerce. The overseas companies were thereby able to
provide documents to their respective import tariff authorities,
reflecting undervalued purchases.

**OPTO POWER**

On May 22, 2001, the Commerce Department imposed a \$80,000 civil
penalty (\$40,000 suspended) on Opto Power Corporation of Tucson,
Arizona. Opto Power paid the penalties as part of a settlement of
charges that it illegally exported diode lasers to Israel between 1995
and 1997 on sixteen separate occasions. 10

**UCAR INTERNATIONAL, INC.**

On May 22, 2001, the Commerce Department imposed a \$237,000 civil
penalty on UCAR International, Inc., of Nashville, Tennessee. The
penalty settles allegations that the company illegally exported ATJ
grade graphite to various foreign countries over a period of two years.
The Commerce Department\'s Bureau of Export Administration controls ATJ
grade graphite because of its usage in rocket nozzles and reentry
vehicle nose tips.10

**TAL INDUSTRIES, INC.**

On May 11, 2001, criminal and civil sanctions were imposed on TAL
Industries, Inc., a wholly owned subsidiary of the China National
Aero-Technology Import and Export Corporation (CATIC), a People\'s
Republic of China (PRC) government owned corporation. TAL entered a plea
of nolo contendere to a felony violation of the Export Administration
Act for making false and misleading statements in connection with an
application submitted by the McDonnell Douglas Corporation (MDC) and
CATIC for a license to export machine tools to the PRC. Pursuant to the
plea, TAL was sentenced to pay a criminal fine of \$1 million and to the
maximum 5-year period of corporate probation. TAL and related Chinese
entities were indicted by a federal grand jury in October 1999. TAL\'s
plea marks the first time in U.S. history that a corporate entity,
wholly owned by the PRC, has waived sovereign immunity and been
convicted of a criminal offense against the United States.

In addition, the Commerce Department imposed a \$1.32 million fine and
denied TAL\'s export privileges for a period of 10 years. CATIC, CATIC
USA, and CATIC Supply were denied export privileges for a period of five
years, all of which were suspended provided that they comply with the
terms of the denial order and do not violate the Export Administration
Act or Regulations during the denial period. Further CATIC, CATIC USA,
CATIC Supply, and TAL agreed to cooperate with the Commerce Department
in any other administrative proceedings related to the export of the
machine tools to China.**11**

**DOW BENELUX N.V.**

On May 9, 2001, the Commerce Department imposed a \$30,000 civil penalty
on Holland-based Dow Benelux N.V., a wholly-owned subsidiary of Dow
Chemical Company. The Commerce Department alleged that Dow Benelux N.V.
reexported U.S.-origin triethanolamine to the Ivory Coast and Turkey
without obtaining the required authorizations.11

Dow Benelux N.V. neither admitted nor deniedthe allegations, but agreed
to pay a \$30,000 civil penalty, \$10,000 of which was suspended.
Payment of the suspended amount will be waived at the end of one year,
provided that Dow Benelux N.V. does not violate the Export
Administration Act or Regulations during that period. Dow Benelux N.V.
voluntarily disclosed the violations. Special Agents from the Commerce
Department\'s Office of Export Enforcement Chicago Field Office
investigated the case.**11**

OPTICAL ASSOCIATES, INC.

On April 26, 2001, the Commerce Department denied the export privileges
to India of Optical Associates, Inc., of Milpitas, California, for the
illegal export of semiconductor manufacturing equipment to India.
Optical Associates also received a criminal fine of \$100,000 and was
placed on two years probation by the U.S. District Court for the
Northern District of California.11

On March 7, 2001, Optical Associates pled guilty in district court to
illegally exporting the equipment to the Bhaba Atomic Research Center, a
division of India\'s Department of Atomic Energy, without the required
Department of Commerce license. On March 15, 2001, the Department of
Commerce denied Optical Associates its U.S. export privileges to India
for three years.**11**

**QUEST TECHNOLOGIES, INC.**

On April 26, 2001, the Commerce Department imposed a \$225,000 civil
penalty on Wisconsin based Quest Technologies, Inc., for exporting
chlorine and sulphur dioxide gas sensors to Vietnam, Taiwan, India, the
United Arab Emirates, Egypt, and Saudi Arabia, on 45 separate occasions
between January 1997 and March 2000, without obtaining Department of
Commerce licenses as required. The Department agreed to suspend
\$135,000 of the \$225,000 penalty. Payment of the suspended amount will
be waived at the end of the year, provided thatQuest Technologies, Inc.,
does not violate either the Export Administration Act and the Export
Administration Regulations or fail to meet other conditions of the
Department order imposing the civil penalty. Special Agents from the
Commerce Department\'s Chicago Office of Export Enforcement investigated
the case.

REFINERY INDUSTRIES, INC.

On March 12, 2001, criminal and civil sanctions were imposed on Refinery
Industries, Inc., of Budd Lake, New Jersey, for attempted exports of gas
detection equipment to Iran. The company received five years probation
from Judge Dickenson R. Debevoise of the U.S. District Court in Newark,
New Jersey. As part of the plea agreement in the criminal case, the
company agreed to forfeit the seized 195 units of methane gas detectors
to the U.S. government. The Commerce Department imposed a \$22,000 civil
penalty against Refinery Industries, Inc., and denied the export
privileges of the company and its president, Mahmood Reza Hashemi, for a
period of ten years, five years of which were suspended.12

The Commerce Department alleged that between May 1998 and August 1998,
Refinery Industries, Inc., attempted to export illegally gas detection
equipment to Iran. The Commerce Department\'s New York office of Export
Enforcement investigated the case.12

**LIFE TECHNOLOGIES, INC.**

On February 28, 2001, the Commerce Department imposed a \$230,000 civil
penalty on Life Technologies, a Division of Invitrogen Corporation (Life
Technologies, Inc.) of Rockville, Maryland, to settle allegations that
the company illegally exported biotoxins to Australia, Belgium, Germany,
Hong Kong, Japan, Peru, and the United Kingdom.12

The Department alleged that on 46 separateoccasions in 1995 and 1996,
Life Technologies, Inc., exported alpha-toxin and microcystin without
the required licenses. The toxins are controlled because they can be
used in the development or production of chemical and biological
weapons.12

Life Technologies voluntarily disclosed the violations to the Department
and cooperated fully in the investigation. As part of the settlement,
\$100,000 of the penalty was suspended. Commerce\'s Office of Export
Enforcement Washington Field Office investigated the case.12

**WORCHELL TRANSPORT, INC.**

On October 23, 2000, the Commerce Department imposed a \$40,000 civil
penalty on Worchell Transport, Inc., doing business as Prime Transport,
a freight forwarder and customs broker, in Springfield Garden, New York.
The civil penalty resolved allegations that on eight separate occasions
Prime Transport engaged in export transactions with a person whose U.S.
export privileges had been denied. In this case, Prime Transport shipped
U.S.-origin commodities to Cosmotrans AG in Switzerland. The Department
denied Cosmotrans\' U.S. export

privileges in 1988 for 20 years. The transactions that led to the
penalty on Prime Transport took place in 1995 and 1996. As part of the
settlement, the Department will suspend \$7,000 of the \$40,000 fine for
one year, and will waive that amount provided that Prime Transport
commits no further violations. Special Agents from Commerce\'s Export
Enforcement office in New York investigated the case.12

TRIJICON, INC.

On September 29, 2000, the Commerce Department imposed a \$64,000 civil
penalty on Trijicon, Inc., a Michigan company, to settle allegations
that it illegally exported U.S.-origin optical sighting devices for
firearms.13

The Commerce Department alleged that on fourseparate occasions between
1994 and 1998 Trijicon, Inc., exported U.S.-origin optical sighting
devices for firearms from the United States to Argentina and South
Africa without the licenses that it knew were required by the Export
Administration Regulations. While neither admitting nor denying the
allegations, Trijicon, Inc. agreed to settle the allegations.13

Special Agents from Commerce\'s Chicago Office of Export Enforcement
investigated the case. A portion of the fine, \$19,500, has been
suspended for one year.**13**

**OSCAR OSMAN**

On September 11, 2000, the Commerce Department issued an order pursuant
to Section 11(h) of the EAA denying export privileges to Miami
businessman Oscar Osman, president of the firm Antilliana Trading
Corporation until September 23, 2006. Osman previously pleaded guilty in
U.S. District Court in Miami on charges

related to illegal export of U.S. origin paints, plastics, motor
vehicles, and hotel supplies to Cuba. Osman pleaded guilty to a criminal
information charging him with conspiracy and violating the Trading With
the Enemy Act and the Export Administration Act by exporting goods
valued at \$800,000 from the United States to Cuba without the required
Commerce Department export licenses. The Court sentenced Osman to one
year imprisonment, three years supervised release and a \$30,000
fine.**13**

PETER H. LEE

On August 29, 2000, the Commerce Department denied Peter H. Lee all U.S.
export privileges for 8 years based on Section 11(h) of the Export
Administration Act. On March 26, 1998, Peter H. Lee was convicted in the
United States District Court for the Central District of California for
violating the Espionage Act. Lee was convicted of willfully attempting
to communicate nuclear technology, that he had obtained while working
for Lawrence Livermore and Los Alamos National Laboratories, to a person
not entitled to receive it, namely an agent of the People\'s Republic of
China (PRC), with reason to believe the information could be used to the
advantage of the PRC. This investigation was conducted by OEE\'s Los
Angeles Field Office**.13**

DEXIN INTERNATIONAL, INC.

On August 18, 2000, the Commerce Department imposed a \$50,000 civil
penalty (\$35,000 suspended) on Dexin International, Inc., of West
Covina, California, for alleged violations of the Export Administration
Regulations (EAR) involving shipments to China. The Department alleged
that on two occasions in 1994 and 1995, Dexin

International, Inc., exported thermal video systems to China without
obtaining the export licenses it knew or had reason to know were
required under the EAR. Commerce also alleged that the company made a
false and misleading statement of material fact on a Shipper\'s Export
Declaration filed with the U.S. Government in connection with one
export.**13**

FEDERAL EXPRESS

On August 10, 2000, the Commerce Department imposed a \$15,000 civil
penalty on Federal Express (FedEx), of Memphis Tennessee, for allegedly
facilitating the export of U.S.-origin equipment to a Denied Person and
failure to maintain records of the subject transaction. The Department
alleged that FedEx, in 1996, facilitated the export of semiconductor
test equipment from the United States to Taiwan. The export was destined
to a Denied Person, Realtek Semiconductor Co. Ltd., of Taipei, Taiwan.
The Department also alleged that FedEx failed to maintain a proper
record of the transaction. The penalties were imposed as a result of an
investigation conducted by the Office of Export Enforcement\'s Boston
Field Office.**14**

EXPEDITORS INTERNATIONAL

On August 9, 2000, the Commerce Department imposed a \$5,000 civil
penalty on Expeditors International, Inc., through its San Francisco
office, for facilitating the export of U.S.-origin equipment to a Denied
Person. The Department alleged that Expeditors International, in 1995,
facilitated the export of semiconductor test equipment from the United
States to Taiwan. The export was destined to a Denied Person, Realtek
Semiconductor Co. Ltd. of Taipei, Taiwan. Commerce\'s Boston Office of
Export Enforcement investigated the case.**14**

\\S.R. TRAFFIC SERVICE

On August 3, 2000, the Commerce Department imposed a \$10,000 civil
penalty on Texas-based S.R. Traffic Service for alleged exports of
U.S.-origin potassium fluoride from the United States to Mexico without
the proper export licenses. Potassium fluoride is controlled for export
by multilateral agreement with the 30-nation Australia Group of chemical
producers because, in addition to its legitimate commercial uses, the
chemical has potential to serve as a precursor in a chemical weapons
program. **14**

EMC CORPORATION

On August 3, 2000, the Commerce Department imposed a \$13,000 civil
penalty on EMC Corporation on behalf of its Data General Division
(formerly the Data General Corporation), Westboro, Massachusetts. The
penalty was imposed to settle allegations that Data General exported
computer equipment to Israel in 1995 without the required authorization.
The Department also alleged that Data General made a false statement on
an export control document related to the shipment of computer equipment
to Mexico. Commerce\'s Office of Export Enforcement Boston Field Office
investigated the case.**14**

LOS ALAMOS AND\
LAWRENCE LIVERMORE NATIONAL LABS

On June 26, 2000, the Commerce Department announced agreements with Los
Alamos National Laboratory (LANL), Los Alamos, New Mexico, and Lawrence
Livermore National Laboratory (LLNL), Livermore, California, concerning
alleged shipments of various commodities without the proper Department
of Commerce authorizations.14

In 1996, the Department of Energy (DOE)discovered that the labs may have
made the unauthorized exports and brought the matter to the attention of
the Department. LANL and LLNL fully cooperated in the investigation.15

The Department of Commerce alleged that LANL, on four occasions from
1994 to 1996, and LLNL, on one occasion in 1994, shipped commodities to
Russia without obtaining the export licenses required under the Export
Administration Regulations. The exports by LANL occurred under the
Department of Energy Material Protection, Control and Accounting
Program, designed to reduce the threat to U.S. national security posed
by unsecured Russian weapons-usable nuclear material. The commodities
consisted of devices for measuring nuclear material, a communications
router, a 486 computer and a printer. The export by LLNL occurred under
a separate lab-to-lab project.**15**

The agreements call for the labs to audit past transactions to ensure
that exports to countries of concern were in compliance with the
licensing requirements; increase their training of personnel on export
controls; and provide increased technical training to the Bureau of
Export Administration (BXA) on nuclear matters.15

The agreements will be reinforced by a new export control program
implemented by the Departments of Commerce and Energy. Under this
program, officials from the DOE complex will work at BXA so that they
can enhance their compliance systems while at the same time providing
BXA basic ongoing technical support on nuclear matters.**15**

NEC TECHNOLOGIES, INC.

On May 10, 2000, the Commerce Department announced a \$25,000 civil
penalty, with \$10,000 suspended, on NEC Technologies, Inc., of

Boxborough, Massachusetts, to settle allegations that NEC illegally
shipped automated finger print identification systems to several
countries in violation of the Export Administration Regulations.**15**

The Commerce Department alleged that on five separate occasions in 1996,
NEC Technologies, Inc., exported U.S.-origin automated finger print
identification systems to Argentina, Peru, Singapore, South Africa, and
Taiwan, without obtaining the required Commerce licenses. Commerce also
alleged that the company made false and misleading statements of
material fact on Shipper\'s Export Declarations filed with the U.S.
government in connection with the exports. NEC voluntarily disclosed the
alleged violations. Commerce\'s Boston Office of Export Enforcement
investigated the case**.15**

**FEDERAL PARTS INTERNATIONAL, INC.**

On May 8, 2000, two Georgia men and their firm pled guilty in U.S.
District Court in Atlanta to charges relating to the illegal export of
automobile and jeep parts to Iran. Federal Parts International, Inc.
located in Norcross, Georgia pled guilty to conspiracy to violate the
U.S. embargo to Iran. The firm's owner, Mehdi (Michael) Azarin, a
resident of Atlanta, and the firm's manager, Farhad Azarin, of Norcross,
Georgia, both pled guilty to charges of making false statements to
Commerce Department investigators. After President Clinton imposed
comprehensive sanctions on Iran in May 1995, Federal Parts conspired to
export automobile and jeep parts valued at approximately \$600,000 to
Iran using an intermediary in Germany. The exports to Iran stopped in
April 1996 when Export Enforcement agents executed a search warrant at
Federal Parts offices in Norcross, and initiated the seizure of two
pending shipments valued at \$225,000. In pleading guilty to the
charges, Mehdi and Farhad Azarin each face a maximum sentence of five
years in prison and a \$250,000 fine. The firm faces a maximum fine of
\$500,000.

**ILLINOIS TOOL WORKS, INC.**

On May 2, 2000, based on a investigation conducted by the Chicago Field
Office, Commerce Assistant Secretary for Export Enforcement, F. Amanda
imposed a civil penalty of \$142,000 on Illinois Tool Works, Inc. (ITW),
of Glenview, IL, to settle allegations that the Magnaflux Division of
ITW exported U.S.-origin chemicals to Brazil on seven occasions between
March 1994 and October 1997 without the required Commerce Department
licenses, and that Magnaflux made false or misleading statements on
Shipper's Export Declarations in connection with these exports. Of the
\$142,000 penalty imposed, \$37,000 was suspended.

The Commerce Department controls the export of certain U.S.- origin
chemicals as part of a multilateral agreement with 30 chemical producing
countries known as the Australia Group. The controlled chemicals have
legitimate commercial uses but also have the potential to be used as
precursors in chemicals.

**HANEFLEX SALES AND SERVICE COMPANY**

In April 2000, Haneflex Sales and Service Company, in Hong Kong settled
civil charges for violations of the Export Administration Regulations
for the resale and transfer of diffusion pumps in violation of the
conditions of the license issued by BXA authorizing the export of the
pumps from the U.S. to Haneflex in Hong Kong. Haneflex agreed to pay a
\$20,000 fine to the Department of Commerce.

**INTERNATIONAL HIGH TECHMARKETING**

On March 27, 2000 International High Tech Marketing (IHTM), a
Miami-based computer exporting company, pled guilty in U.S. District
Court in Miami to a criminal information charging the firm with five
counts of violating the International Emergency Economic Powers Act. The
charges related to the illegal export of U.S.-origin goods to Libya and
Sudan, and to making false or misleading statements on export control
documents. The Court ordered the firm to pay a fine of \$250,000.

A criminal information charged IHTM, a wholly owned subsidiary of CHS
Electronics, Inc., with two counts for illegally exporting computers and
related items to Libya and Sudan, and three counts charging that the
firm under-declared the value of export shipments, thereby evading
reporting requirements to the U.S. Government.

In related criminal and civil proceedings, in March 2002, a U. S.
District Judge in Miami placed Maria Elena Ibanez, IHTM's former owner,
on probation for 18 months and fined her \$5,000 for conspiring to
falsify commercial invoices. On November 1, 2002, BIS imposed a civil
penalty of \$115,000 and a suspended five year denial of export
privileges on Ibanez.

Ibanez agreed to the civil penalty after BIS alleged that on 265
occasions between May 1996 and September 1998, she caused, aided, and
abetted IHTM in various export control violations, including improperly
avoiding the requirement to file Shipper's Export Declarations (SEDs) by
understating values on commercial invoices, submitting falsified SEDs to
the U.S. Government, and supplying its freight forwarder with
undervalued commercial invoices that were used by the freight forwarder
to prepare inaccurate SEDs and air waybills. The five year denial period
for Ibanez imposed by the Department of Commerce was suspended on
condition that Ibanez doesn't commit any violations during the five year
period.

**ANDREW PIETKIEWICZ**

On March 5, 2000, Andrew Pietkiewicz was arrested for defaulting on a
portion of a \$25,000 civil penalty imposed upon him by the Department
of Commerce for the illegal export of computers and computer
accessories. Special Agents from the Office of Export Enforcement's
Boston Field Office obtained a warrant for Pietkiewicz for violating an
order issued by the Department, and arrested Pietkiewicz as he entered
the U.S. from Poland.

**BAYER CORPORATION**

On March 1, 2000, the Commerce Department imposed a \$200,000 civil
penalty on Bayer Corporation, to settle allegations that Bayer
Corporation, through its Diagnostics Division, exported glucose and
other reagents from the United States to Hong Kong, Malaysia, Mexico,
Singapore, South Africa, South Korea, and Taiwan, without obtaining the
required validated export licenses. The chemicals are controlled for
Chemical or Biological Warfare reasons. The Office of Export
Enforcement's Washington Field Office investigated the case.

**HUA KO ELECTRONICS CO.,**

**LTD. /NANSHING COLOR & CHEMICAL CO., LTD./GENERAL CHEMICAL CORP. OF
NEW JERSEY**

On December 21, 1999, the Commerce Department imposed a \$174,000 civil
penalty on Hua Ko Electronics Co., Ltd., a Hong Kong company which had
previously been denied export privileges, for ordering and receiving
U.S.-origin goods in violation of its denial order. The allegations
involve shipments that occurred between August 1994 and May 1997. Hua Ko
was also denied export privileges for five years. The denial and
\$87,000 of its fine were both suspended.

In a related matter, the Department imposed a \$38,500 civil penalty on
Nanshing Color & ChemicalCo., Ltd., also a Hong Kong company, for
transferring U.S.-origin goods to Hua Ko. The lesser civil penalty
imposed was due in large part to Nanshing's cooperation in the
investigation. A third company, General Chemical Corporation of New
Jersey, agreed to a \$77,000 civil penalty to settle allegations that it
exported U.S.-origin goods to Nanshing while knowing or having reason to
know that the Nanshing would transfer the goods to Hua Ko Electronics
Co. Ltd.

**MICROTEK**

On December 14, 1999, Microtek International Inc., Development Systems
Division and its' company President, Joe-Pin Ouyang plead guilty in U.S.
District Court in Portland, Oregon to criminal charges that the firm
attempted to illegally export computer emulators to Iran. The plea
agreement directs that the firm pay a criminal fine of \$100,000 and
agree to the civil forfeiture of \$75,125, seized during the
investigation. The agreements also recommends that Ouyang serve 5 months
in prison and 5 months of home detention and pay a \$3,000 criminal
fine. Evidence showed that Microtek attempted to illegally export two
computer emulators valued at \$75,125 to the R & D Company in Iran.

**LAFAYETTE INSTRUMENT COMPANY, INC.**

On December 8, 1999, the Commerce Department imposed a \$10,000 civil
penalty on Lafayette Instrument Company, Inc., to settle an allegation
that the company violated the terms of an export license when a shipment
of U.S.-origin polygraph machines was reexported without authorization
from Hong Kong to the People' Republic of China. This investigation was
started as a result of a post shipment verification conducted in Hong
Kong.

**MACOSIA INTERNATIONAL**

On November 29, 1999, the Under Secretary for Export Administration
issued an order affirming therecommended decision of the administrative
law judge (ALJ) that imposed a seven-year denial of all export
privileges against Macosia International, of Laredo, Texas. The ALJ
found that Macosia had exported handcuffs and leg irons from the United
States to Mexico without the validated export licenses required by the
EAR.

**PRECISION SCIENTIFIC, INC.**

On September 30, 1999 the Commerce Department imposed a \$10,000 civil
penalty on Varlan Corporation to settle allegations that Precision
Scientific, Inc., its former subsidiary, made a false statement on an
export control document in connection with a shipment of incubators to
Iran. Precision Scientific stated on the Shipper's Export Declaration
that the ultimate destination of the incubators was the Netherlands,
when in fact the intended destination was Iran.

**PETER L. APPELBAUM**

On August 18, 1999, Peter L. Appelbaum, president of Pacorp, Inc.,
Miami, Florida, pled guilty in U.S. District Court, Southern District of
Florida, Miami Division, to charges of violating the Arms Export Control
Act and the International Emergency Economic Powers Act by illegally
exporting defense articles and crime control equipment to Honduras
without the required State Department and Commerce Department licenses.
The exported items included night vision equipment subject to the
International Traffic in Arms Regulations, handcuffs, shackles,
fingerprint powders, and dyes subject to the EAR. The conviction was the
result of a joint investigation by the OEE=s Miami Field Office and the
U.S. Customs Service.

**SUMMIT UNITED**

**INDUSTRIES, INC.**

On August 18, 1999, Summit United Industries, Houston, Texas, pled
guilty in the Southern Districtof Texas to charges that the company
illegally exported oil field equipment to Libya in violation of the
International Emergency Economic Powers Act. Summit was ordered to pay a
\$10,000 fine and a special assessment of \$400. The conviction resulted
from a joint investigation by the Office of Export Enforcement's Dallas
field office and the U.S. Customs Service, Houston, Texas.

**ROTHCO / MORRIS ROTHENBERG AND SONS INC.**

On July 15, 1999, Morris Rothenberg and Sons, Inc., doing business as
Rothco, a Smithtown, New York Company, plead guilty to charges that the
company illegally exported and attempted to export handcuffs to the
Republic of Croatia and gas masks to Japan. In connection with the plea,
Rothco agreed to pay a criminal fine of \$500,000 and prosecution costs
in the amount of \$200,000. In a related administrative action, the
Department of Commerce ordered Rothco to pay a \$200,000 civil penalty
and denied its export privileges for one year to settle alleged
violations of the EAR. The denial period was suspended and will be
waived, provided that, during the period of suspension, Rothco committed
no violation of the EAR. The investigation was conducted jointly by
OEE's New York Field Office and the U.S. Customs Service.

**FAWZI MUSTAPHU ASSI**

On July 12, 1999, the Commerce Department imposed a twenty-year denial
of all U.S. export privileges on Fawzi Mustapha Assi, a Lebanese
naturalized U.S. citizen, for attempting to export from the United
States to Lebanon a thermal imaging camera without the export license
that he knew or had reason to know was required. The equipment that Assi
was attempting to export was intended for Hizballah, which has been
designated as a foreign terrorist organization by the Secretary of
State.

In a separate criminal action, in July 1998, Assi was arrested by
special agents from the OEE's Chicago Field Office, the Federal Bureau
of Investigations and the U.S. Customs Service for attempting to export
U.S. origin items without the required export licenses andfor attempting
to provide material support and resources to a designated foreign
terrorist organization. In August 1998, Assi was indicted on charges
alleging violations of IEEPA, the Arms Export Control Act, and the
Antiterrorism and Effective Death Penalty Act, and failing to appear in
court. He is currently a fugitive.

**SUN MICROSYSTEMS OF CALIFORNIA LTD.,/**

**GOLD VALLEY TECHNOLOGY COMPANY**

On June 21, 1999, the Commerce Department imposed a \$30,000 civil
penalty on Sun Microsystems of California, Ltd., a Hong Kong company, to
settle allegations that it violated the EAR by arranging for shipments
of computers to the People's Republic of China (PRC) that did not adhere
to a condition of the export license. In a related matter, on December
21, 1999, the Commerce Department's imposed a \$20,000 civil penalty on
Gold Valley Technology Company to settle allegations that it violated a
term of an export license involving a shipment of computers to the
People's Republic of China. A portion of the civil penalty imposed
against Gold Valley, \$10,000, was suspended.

The Department alleged that, in September 1993, Sun Microsystems and
Gold Valley arranged for a shipment of computers to the PRC that they
knew or had reason to know was contrary to the condition on the export
license. The Department also alleged that in October 1993, Sun
Microsystems arranged for a shipment of computers to the PRC falsely
representing that the shipment was authorized under a BXA license. The
investigation was conducted by OEE's Washington Field Office

**INTERLINK COMPUTER TECHNOLOGY**

In June 1999, a criminal sentence was imposed on Interlink Computer
Technology Inc., a company owned and operated by Ali Mozaffari, by the
U.S. District Court for the Northern District of California for
violating the U.S. trade embargo against Iran. Interlink was required to
pay a \$30,000 criminal penalty. Mozaffari, individually and doing
business as Interlink, also agreed to pay a \$5000 civil penalty to the
U.S. Department of Commerce and received a five-year denial of export
privileges (suspended).

The investigation revealed that Mozaffari, doing business as Interlink,
attempted to ship computer goods to Iran via Germany in September 1996
in violation of the Export Administration Regulations (EAR). The United
States Government maintains a comprehensive economic sanctions program
against the Government of Iran, which prohibits virtually all commercial
transactions involving U.S.-origin goods or U.S. persons, or both, with
the Government of Iran, unless specifically authorized.

**DIEN DUC HUYNH/DIEN'S**

**AUTO SALVAGE**

On May 27, 1999, a U.S. District Court jury for the Western District of
Louisiana found Dien Duc Huynh and his corporation, Dien's Auto Salvage,
guilty of violating the Export Administration Act, Trading with the
Enemy Act and theft of government property in connection with the
illegal export of military surplus vehicles to Vietnam. Following his
conviction, Dien Duc Huynh agreed to pay the government \$250,000 in
lieu of forfeiting his property to the government. The conviction
resulted from a joint investigation by the Office of Export
Enforcement\'s Dallas field office, the U.S. Customs Service and the
Department of Defense. Investigators found evidence that the defendants
were purchasing surplus military vehicles from Army bases in the United
States and Europe and exporting them to Vietnam through Singapore in
violation of U.S. export control laws. The vehicles are controlled for
national security, anti-terrorism, and regional stability reasons.

**INTERLINK COMPUTER TECHNOLOGY**

On April 29, 1999, Interlink Computer Technology pleaded guilty in U.S.
district court in San Francisco to charges of attempting to ship
computer goods through Germany to Iran. This plea was the result of a
joint investigation by special agents in the Office of Export
Enforcement's San Jose field office and the U.S. Customs Service. In a
related administrative action, the Commerce Department ordered the
President of Inerlink, Ali Mozaffari, individually and doing business as
Interlink, to pay a \$5,000 civil penalty and denied both Interlink and
Mozaffari's export privileges for five years; the denial period was
suspended for five years.

**WILLIAM F. MCNEIL/AMERICAN PROTECTION COPORATION**

On April 27, 1999, the Commerce Department denied the export privileges
of American Protection Corporation until August 8, 2001. The Commerce
Department determined that American Protection Corporation is related to
William F. McNeil, whose export privileges were denied pursuant to
Section 11(h) of the Export Administration Act, based on his criminal
conviction for violating the International Emergency Economic Powers
Act. The Commerce Department issued the "related person order" to
prevent evasion of the order against McNeil.

**JOHN STROME/**

**ABDULAMIR MAHDI**

On April 23, 1999, a U.S. District Court judge in Orlando, Florida
sentenced John R. Strome, President of the Melbourne, Florida firm,
Brevard International Technical Services, to two years of imprisonment
and two years of probation for violating U.S. restrictions on exports to
embargoed destinations. Strome, a Canadian citizen, pled guilty on
December 17, 1998 to conspiring to violate the International Emergency
Economic Powers Act and the Export Administration Regulations by
exporting industrial equipment and machinery to Iran, Iraq, and Libya
via intermediariesin Canada and the United Kingdom. In imposing the
sentence, the judge took into account Strome's substantial assistance in
providing the Office of Export Enforcement with information and evidence
on other firms and individuals involved in circumventing U.S.
restrictions on exports subject to the EAR to embargoed destinations.

In a related matter, on November 19, 1999, Abdulamir Mahdi, a former
associate of Strome and Canadian Businessman, was sentenced by a U.S.
District Court judge in Orlando, Florida, to 51 months of imprisonment,
a \$7,500 criminal fine and 3 years of probation for violating U.S.
export controls restricting trade with Iran and Iraq. Mahdi, an Iraqi
national, used two Toronto companies, OTS Refining Equipment Corporation
and Tech-Link Development Corporation, to buy U.S. oil-field and
industrial equipment for diversion to Iran and Iraq. The case was the
result of a two-year investigation by special agents in the Office of
Export Enforcement's Miami field office.

**KHALID KHALIL EL-AWAR**

On April 12, 1999, the Commerce Department denied Khalid Khalil El-Awar
(Khaled El-Awar) of Houston, Texas, all export privileges until August
5, 2003, pursuant to Section 11(h) of the Export Administration Act. On
August 5, 1995, Khaled El-Awar was convicted in the U.S. District Court
for the Southern District of Texas of violating the International
Emergency Economic Powers Act by exporting steel pipe and oil field
accessories from the United States to Rotterdam, Holland, for
transshipment to Libya.

**SCHOTT FIBER OPTICS, INC.**

On April 13, the Commerce Department imposed a \$50,000 civil penalty on
Schott Fiber Optics, Inc., of Southbridge, Massachusetts, to settle
allegations that the company exported fiber optic image inverters from
the United States to the Netherlands without obtaining the required
export licenses. A portion of the penalty, \$10,000, was suspended for
one year, and thereafter will be waived, provided no violations are
committed during the one-year period. The Office of Export Enforcement's
Boston field office investigated thecase.

**CN BIOSCIENCES, INC**.

On March 29, 1999, the Commerce Department imposed a \$708,000 civil
penalty on CN Biosciences, Inc., of San Diego, California, and its
subsidiary, Calbiochem-Novabiochem (UK) Ltd., of the United Kingdom, for
alleged shipments of U.S.-origin biological toxins to various
destinations without the required export licenses. The Department
further alleged that Calbiochem (UK) Ltd reexported a U.S.-origin
biotoxin from the United Kingdom to the Republic of Ireland without the
required reeexport authorization from BXA. Half the penalty, \$354,00 is
suspended for one year, and will thereafter be waived, provided the
companies commit no violation of the Export Administration Regulations
during that time. The company voluntarily disclosed the shipments and
cooperated with the investigation. Export controls on biological agents
implement U.S. obligations to the 30-nation Australia Group. Biotoxins
are among the most dangerous items controlled by Australia Group members
because they can be used to produce biological weapons. The case
resulted from an investigation conducted by special agents from the
Office of Export Enforcement's field office in Irvine, California.

**ALDRICH AMES**

On March 23, 1999, the Commerce Department denied Aldrich Ames export
privileges until April 24, 2004, pursuant to Section 11(h) of the Export
Administration Act, based upon his conviction under the Espionage Act.
Ames is serving time in federal prison.

**HAROLD J. NICHOLSON**

On March 23, 1999, the Commerce Department denied Harold J. Nicholson,
of Eugene, Oregon, export privileges until June 7, 2007, pursuant to
Section 11(h) of the Export Administration Act, based upon his
conviction under the Espionage Act for conspiring with officers of the
intelligenceservices of the Russian Federation, to communicate, deliver
and transmit to

Russia photographic negatives and information relating

to the U.S. national defense. Nicholson is serving time in federal
prison.

**A.V.S. ARMOURED VEHICLES'**

**SYSTEMS, INC.**

On March 23, 1999, the Commerce Department denied A.V.S. Armoured
Vehicles' Systems, Inc., of Plainview, New York, export privileges until
April 10, 2000, pursuant to Section 11(h) of the Export Administration
Act, based upon its conviction under the Arms Export Control Act for
false statements relating to the end-user of replacement parts for a
"Hawk" anti-aircraft missile system.

**COLLIN XU/YI YAO/LION PHOTONICS**

On March 9, 1999, a grand jury in Boston returned an indictment charging
Collin Xu, Yi Yao, Lion Photonics, of Montreal, Canada, and Lion
Photonics, of Beijing, China, with illegally exporting fiber optic
gyroscopes to China, via Canada. The investigation disclosed that the
defendants falsely described the exported items as fiber sensors for
optical communication and listed Canada as the country of ultimate
destination. Yao and Xu are currently in custody pending trial.

**HADI SHALCHI**

On March 2, 1999, Hadi Shalchi, president and owner of Continental A. P.
Company, of Hopelawn, New Jersey, pleaded guilty in U.S. District Court
in Newark on behalf of Continental A.P. Company to charges that the
company violated the Export Administration Regulations by illegally
exporting auto parts to Iran. Shalchi pleaded guilty on his own behalf
to makingfalse statements in connection with that transaction. Shalchi
admitted that he had represented that the auto parts were bound for the
UAE when, in fact, they were bound for Iran. The Office of Export
Enforcement's New York field office investigated the case.

**PPG INDUSTRIES DE MEXICO,**

**S.A. DE C.V.**

On February 26, 1999, the Commerce Department imposed a \$60,000 civil
penalty on PPG Industries de Mexico, S.A. de C.V. (PPG Mexico), a
Mexican chemical company, to settle allegations that the company
exported potassium fluoride from the United States to Mexico without the
required Commerce Department licenses. The Department also alleged that,
on two of those occasions, PPG Mexico knew that the violations would
occur. A portion of the penalty, \$20,000, will be suspended for one
year, then waived, if PPG Mexico commits no violations during that time.
Potassium fluoride is controlled for export by multilateral agreement
with the 30-nation Australia Group because, in addition to its
legitimate commercial uses, the chemical has the potential to serve as a
precursor in a chemical weapons program.

**ALCOA ORDERED TO PAY**

**\$750,000 PENALTY**

On February 19, 1999, Under Secretary for Export Administration William
Reinsch imposed a \$750,000 civil penalty on the Aluminum Company of
America (ALCOA) for 100 violations of the Export Administration
Regulations (EAR). Reinsch affirmed the findings of an Administrative
Law Judge (ALJ) that ALCOA exported potassium fluoride and sodium
fluoride to Jamaica and Suriname on 50 separate occasions without
obtaining the required Commerce export licenses. Additionally, the ALJ
found that ALCOA made false statements inconnection with each of the 50
shipments. ALCOA committed the violations because its export compliance
program failed to recognize that the chemicals in question had been
added to the Commerce Control List.

**YUFENG WANG/A&C INTERNATIONAL TRADE**

On February 12, 1999, Yufeng Wang, also known as Alan Wang, was arrested
by Special Agents from the Office of Export Enforcement's Boston Field
Office, as he reentered the United States from China. Wang and his
company, A&C International Trade, Inc., were indicted in U.S. District
Court, Washington, DC, and charged with the illegal export of an armored
riot control vehicle, equipped with a pepper spray system, to China. On
March 10, 2000, A&C International pled guilty to the export charges, and
Wang pled guilty to submitting false documents to the U.S. Government in
connection with the export. Wang and A&C International are currently
awaiting sentencing by the U.S. District Court.

**YURI MONTGOMERY**

On January 15, 1999, a U.S. district judge in Washington, D.C.,
sentenced Yuri Montgomery, doing business as Fortend USA, to three
years' probation for violations of the Export Administration Act and the
International Emergency Economic Powers Act. On November 6, 1998,
Montgomery pleaded guilty to exporting laser rifle sights, ballistic
helmets, optical sights, handcuffs, and stun guns to Macedonia and
Slovenia in violation of U.S. export controls. The case was investigated
by special agents from the Office of Export Enforcement's Boston field
office.

**HERB KIMIATEK/KIMSON CHEMICAL INC.**

On September 4, 1998, the Commerce Department imposed a \$20,000 civil
penalty on Herb Kimiatek, individually and doing business as Kimson
Chemical Inc., of Boston, Massachusetts, to settle allegations that Mr.
Kimiatek exported sodium cyanide from the UnitedStates to the Dominican
Republic without obtaining the license he knew or had reason to know was
required for the shipment. Sodium cyanide is controlled for
nonproliferation reasons because it can be used as a precursor for
chemical weapons.

**CHEMICALS EXPORT COMPANY**

On September 3, 1998, the Commerce Department imposed a \$16,000 civil
penalty on Chemicals Export Company, of Boston, Massachusetts, to settle
allegations that the company exported sodium cyanide from the United
States to Peru, Venezuela and Guatemala without obtaining the required
validated export licenses.

**SYNTEX S.A. de C.V./MARIO PALMEROS/VILLASANA AND COMPANY, INC.**

On September 3, 1998, the Commerce Department imposed a \$65,000 civil
penalty on Syntex S.A. de C.V., a Mexican chemical company, to settle
allegations that it caused, aided, or abetted the export of U.S.-origin
hydrogen fluoride from the United States to Mexico without the required
Commerce Department licenses. Syntex will pay \$32,500 of the penalty;
payment of the remaining fine will be suspended for one year, then
waived, provided Syntex committs no violations of the Export
Administration Regulations during the one-year probation period.

In two related cases involving freight forwarders for Syntex, the
Commerce Department also imposed civil penalties. A \$50,000 civil
penalty and a two-year denial of export privileges was imposed on Mario
Palmeros of Palmeros Forwarding, and a \$2,500 civil penalty and a
two-year denial of export privileges was imposed on Villasana and
Company, Inc. All of the penalties against the forwarders, both of
Laredo, Texas, were suspended for two years; they will be waived if the
forwarders do not violate the Export Administration Regulations during
the two-year probation period. The freight forwarders agreedto the
sanctions in order to settle allegations that they prepared and used
export control documents representing that the chemicals needed no
Commerce licenses when, in fact, licenses were required.

**SOUTHERN INFORMATION SYSTEMS**

On September 3, 1998, the Commerce Department imposed a \$25,000 civil
penalty on Southern Information Systems, located in Hsinchu, Taiwan, to

settle allegations that the company exported digital microwave systems,
which incorporated U.S.-origin parts, from Taiwan to Vietnam without
obtaining the required Commerce authorization.

**IBM EAST EUROPE/ASIA LTD**

On July 31, 1998, IBM East Europe/Asia Ltd., a Russian subsidiary of
International Business Machines Corp., pleaded guilty in U.S. District
Court in Washington, D.C. to charges that, in 1996 and 1997, it exported
a total of 17 computers to a Russian nuclear weapons laboratory,
Arzamas-16, having reason to believe that the computers would be used
"directly or indirectly" in research on, or development, design,
manufacture, construction, testing or maintenance of nuclear explosive
devices. The court imposed an \$8.5 million criminal fine, the maximum
permitted for the charges to which the company pled guilty. In a related
administrative action, Assistant Secretary Amanda DeBusk ordered IBM
East Europe/Asia to pay \$171,000 and denied its export privileges for
two years. Imposition of the denial period was suspended, and will be
waived, provided the company does not violate the Export Administration
Regulations (EAR) or any order issued under the EAR during the two-year
probation period. Additionally, IBM East Europe/Asia agreed that, during
the next two years, it will not use license exception CTP, and will not
to engage in any transactions involving nuclear or military end users or
end uses without written authorization from BXA.

**EVI, INC.**

On June 30, 1998, the Commerce Department imposed a \$40,000 civil
penalty on EVI, Inc., of Houston, Texas, to settle allegations that EVI,
Inc., through its former subsidiary, Energy Ventures Mid-East,
Inc.,exported oil field equipment to Iran without obtaining the required
export licenses. The Department also alleged that, in connection with
each export, EVI, through its former subsidiary, Energy Ventures
Mid-East, Inc., made false and misleading statements of material fact on
export control documents. At the time, the products were controlled for
export to Iran for foreign policy reasons. The Department suspended, for
one year, payment of \$10,000 of the \$40,000 civil penalty and will
waive payment of the suspended portion of the penalty if EVI complies
with the EAR during the one-year probation period.

**GATEWAY 2000, INC.**

On June 19, 1998, the Commerce Department imposed a \$402,000 civil
penalty on Gateway 2000, Inc. ("Gateway 2000\"), of North Sioux City,
South Dakota to settle allegations that, on 30 separate occasions,
Gateway 2000 exported U.S.-origin computer systems to 16 countries,
including Iran, Syria and China, without the required validated export
licenses that it knew or had reason to know were required by the Export
Administration Regulations. The Department also alleged that, on 27
separate occasions, Gateway 2000 filed Shipper's Export Declarations
containing false or misleading statements of material fact.

**PENNY RAY/JAMES LEE**

On April 6, 1998, the Commerce Department denied Penny Ray and James
Lee, both of San Jose, California, all U.S. export privileges until
January 14, 2008, pursuant to Section 11(h) of the Export Administration
Act. A jury in San Francisco convicted Penny Ray and James Lee of
violating the Arms Export Control Act by exporting defense articles to
the People's Republic of China without the required export license from
the Department of State. On January 14, 1998, Ray and Lee were sentenced
to 18 months of imprisonment, followed by three years' supervised
release, and a \$50 special assessment fee.

**JOSE LUIS SESIN**

On May 20, 1998, a U.S. district judge in Miami, Florida, sentenced Jose
Juis Sesin, president of Sesin International Corp., a Miami food broker,
to three years' probation, imposed a criminal fine of \$20,000 and a
\$100 special assessment fee for violating U.S. restrictions on trade
with Cuba. The judge also ordered Sesin to serve home confinement using
an electronic monitor for the first six months of his probation period.
On April 6, 1998, Jose Luis Sesin pled guilty in U.S. District Court in
Miami to violations of the International Emergency Economic Powers Act,
the Trading with the Enemy Act, and the conspiracy statute for his
involvement in the illegal exportation of commercial foodstuffs and
restaurant supplies to Cuba. On February 1, 1999, the Commerce
Department denied Sesin all U.S. export privileges until May 20, 2006,
pursuant to Section 11(h) of the Export Administration Act.

**DAVID IRWIN PORTNOY**

On May 5, 1998, the Commerce Department denied David Irwin Portnoy of
Irving, Texas all U.S. export privileges until August 1, 2007, pursuant
to Section 11(h) of the Export Administration Act. On August 1, 1997,
Portnoy was convicted in the U.S. District Court in Dallas of violating
the International Emergency Economic Powers Act by transshipping
electronic components and telecommunications equipment through
Switzerland to Libya without the required export licenses.

**WAYNE P. SMITH**

On May 5, 1998, the Commerce Department denied Wayne P. Smith of Vinton,
Louisiana all U.S. export privileges until July 3, 2006, pursuant to
Section 11(h) of the Export Administration Act. On July 3, 1996, Smith
was convicted in the U.S. District Court in the Western District of
Louisiana of violating the Arms Export Control Act by exporting 80 plain
self-aligning ball bearings for McDonald Douglas F-4 Phantom II jets
without the required export license from the Department of State.

**WELL COMPLEX**

**INTERNATIONAL**/**DAVID CHAN**

On March 17, 1998, Well Complex International of Passaic, New Jersey,
pled guilty in U.S. District Court in Newark, New Jersey, to charges of
exporting hafnium granules to the People's Republic of China without
obtaining a validated export license from the Department of Commerce.
The export of hafnium is controlled to the People's Republic of China
for foreign policy reasons. David Chan, owner of Well Complex
International, pled guilty to charges that he violated the false
statement statute in connection with the illegal exportation of hafnium
granules to the People's Republic of China. On July 8, 1998, Well
Complex was sentenced to five years' probation, a \$7,500 criminal fine
and a \$200 special assessment fee. David Chan was sentenced to three
years' probation, a \$500 criminal fine and a \$100 special assessment.
The case was the result of an investigation by the Office of Export
Enforcement's New York field office.

**C.H. POWELL COMPANY**

On March 2, 1998, the Commerce Department imposed a total civil penalty
of \$30,000 on C.H. Powell Company of Peabody, Massachusetts for
allegedly preparing shipping documents containing false information and
acting with knowledge or reason to know that a violation had occurred.
The civil penalties were imposed in two separate cases. In one case, the
Department alleged that C.H. Powell prepared export control documents
with false information and used them in connection with the exports of
sodium cyanide from the United States to Peru, Venezuela and Guatemala.
In the second case, the Department alleged that C.H. Powell arranged for
an exporter to ship U.S.-origin sodium cyanide from the United States to
the Dominican Republic, knowing or having reason to know that the
exporter had failed to obtain the necessary Commerce Department
authorization.

**REPUBLIC CARGO SYSTEMS**

On February 26, 1998, the Commerce Department imposed a \$10,000 civil
penalty on Republic Cargo Systems, successor to certain of the business
of H&M International Air Freight Corp. in Kearny, New Jersey, for
allegedly exporting U.S.-origin marine diesel engine parts from the
United States to Vietnam without obtaining the required validated
license. The penalty is suspended for one year, and then will bewaived
provided that Republic Cargo Systems does not violate the export
regulations during the suspension period.

**LEP PROFIT**

**INTERNATIONAL, INC.**

On February 26, 1998, the Commerce Department imposed a \$60,000 civil
penalty on LEP Profit International, Inc. (LEP) of Marietta, Georgia,
for allegedly preparing shipping documents containing false information.
The Department alleged that the Seattle office of LEP prepared and used
export control documents to effect exports to Vietnam, representing that
the commodities were licensed for export to Vietnam, when, in fact, none
of the exports was licensed. A portion of the penalty, \$15,000, will be
suspended for two years then waived provided that LEP does not violate
the export regulations during the suspension period.

**ALLERGAN, INC.**

On January 26, 1998, the Commerce Department imposed a \$824,000 civil
penalty on Allergan, Inc. ("Allergan") of Irvine, California to settle
allegations that Allergan violated export controls on biological agents
by shipping botulinum toxin pharmaceutical product from the United
States to various countries without the required export licenses. The
export controls on biological agents are part of U.S. obligations to the
30-nation Australia Group, whose members are committed to curbing the
proliferation of chemical and biological weapons. All member countries
require licenses to export biological agents with both legitimate
civilian uses and possible uses in biological weapons. Biotoxins are
considered among the most dangerous items controlled by Australia Group
members because some nonmember countries have produced or acquired them
for biological weapons purposes. The Commerce Department's Office of
Export Enforcement field office in Los Angeles conducted the
investigation.

**HENRY JOSEPH TROJACK/HAMID ABDOL RASHIDIAN**

On February 18, 1998, a federal jury in Portland,Oregon, convicted Henry
Joseph Trojack for conspiring with others to illegally export
impregnated alumina (a chemical catalyst) to Iran through Dubai, United
Arab Emirates, while operating under the name of R & H International. On
January 12, 1999, a U.S. district judge in Portland, Oregon, sentenced
Henry Joseph Trojack to seven years' imprisonment for his part in the
conspiracy. On April 6, co-defendant Hamid Abdol Rashidian pled guilty
in U.S. District Court in Portland, Oregon, to conspiring with others to
export General Electric gas turbine parts and impregnated alumina to
Iran through the United Arab Emirates. On June 8, 1998, a federal judge
in Portland, Oregon, sentenced Hamid Abdol Rashidian to serve 21 months
in prison, followed by three years' supervised release and a \$100
special assessment fee for his participation in the conspiracy. As part
of his guilty plea, Rashidian agreed to forfeit \$10,000 to the United
States. The case was the result of a joint investigation by the Office
of Export Enforcement\'s San Jose field office and the U.S. Customs
Service.

**REPUBLIC-LAGUN MACHINE TOOL COMPANY**

On March 15, 1998, the Commerce Department imposed a \$20,000 civil
penalty on Republic-Lagun Machine Tool Company, of Carson, California,
to settle allegations that the company exported a vertical milling
machine with a computer numeric controller (CNC) from the United States
to the People's Republic of China without obtaining the validated export
license that the company knew was required. Exports of CNC-equipped
milling machines are controlled for national security and nuclear
nonproliferation reasons.

**NF&M INTERNATIONAL INC**.

On February 9, 1998, the Commerce Department imposed a \$82,500 civil
penalty on NF&M International Inc. (NF&M), a manufacturer of titanium
alloy in Jericho, New York, for allegedly exporting titanium alloy
products to consignees in Australia, Austria, England, Germany, and
Israel without obtaining the required export licenses. The Department
agreed to suspend payment of \$42,500 for one year and then to waive
that payment, provided that NF&M complies with export control
regulations.

**BE AEROSPACE**

On January 13, 1998, BE Aerospace, Inc., headquartered in Wellington,
Florida, pled guilty in the United States District Court in New Haven,
Connecticut to violating the Export Administration Regulations and was
fined \$2.5 million and given three years' probation. In a related
administrative action, the Commerce Department imposed a \$500,000 civil
penalty on PTC Aerospace, a division of BE Aerospace, to settle
allegations stemming from the same transactions which involved the
export of aircraft parts, mainly seats, from PTC Aerospace to France for
installation in Iran Air aircraft without obtaining the required
validated export licenses from the Department of Commerce. The
Department also denied PTC Aerospace's export privileges for three
years, but suspended the denial conditioned on PTC Aerospace not
committing another violation during that period. On May 12, 1998, the
Commerce Department imposed a \$10,000 civil penalty on Marc A.
Leveille, a French national and manager of BE Aerospace, S.A. in Paris,
for allegedly directly or indirectly falsifying or concealing a material
fact in the course of an action instituted under the authority of the
Act regarding the export of aircraft parts to France for installation on
Iran Air aircraft. The case was the result of a joint investigation by
the Commerce Department's Office of Export Enforcement field office in
New York and the U.S. Customs Service.

**JACK BAUGHER**

On December 19, 1997, a U.S. district judge in Yakima, Wasington
sentenced Jack Baugher to pay a \$130,000 fine, and a \$400 special
assessment fee, serve five years' probation with four months of home
detention, and to perform 100 hours of community service, based on his
guilty plea to illegally exporting pepper spray and stun guns to the
Philippines and Mexico. In addition, on August 3, 1998, the Commerce
Department denied Baugher all U.S. export privileges until December 19,
2005, pursuant to Section 11(h) of the Export Administration Act.

**WILLIAM F. MCNEIL**

On November 7, 1997, the Commerce Department imposed a five-year denial
of export privileges on William F. McNeil, of Pittsfield, Massachusetts,
basedon his conviction for illegally exporting riot shields to Romania
without the required export license.

**BEN H. ATTIA**

On October 30, 1997, the Commerce Department's Under Secretary for
Export Administration William A. Reinsch denied Ben H. Attia, also known
as Adnan Attia, of Miami Beach, Florida, individually and doing business
as General Polyphase, Inc. of Tunis, Tunisia, all U.S. export privileges
for 15 years for exporting ballistic shields to Tunisia without
obtaining the required export license. The Commerce Department\'s Office
of Export Enforcement field office in Boston investigated the case.

**KIYOYUKI YASUTOMI**

On January 5, 1998, Kiyoyuki Yasutomi, a Japanese businessman, pled
guilty in U.S. District Court in Washington, D.C. to violating the
Export Administration Act by illegally reexporting computer equipment
valued at \$1.4 million from Japan to Pakistan without the required
export license. The U.S. District Court Judge sentenced Yasutomi to
eighteen months' imprisonment and a \$10,000 fine. On November 23, 1998,
the Commerce Department denied Yasutomi all U.S. export privileges until
January 5, 2008, pursuant to Section 11(h) of the Export Administration
Act.

**FRANCISCO FERREIRO-PARGA/**

**CARLOS FERNANDEZ/KENNETH BRODER/MANUEL TORRES/**

**PEDRO BORGES**

An indictment filed in May of 1997 charged that, from November 1993
through April 1997, Francisco Ferreiro-Parga, Carlos Fernandez, Kenneth
Broder, and two co-defendants Manuel Torres and Pedro Borges, illegally
exported 38 container loads of commercial foodstuffs and restaurant
supplies from South Florida to Cuba by falsely claiming the shipments
were destined for the Dominican Republic, Netherlands Antilles, and
Mexico.

On September 18, 19, and 25, 1997**,** Ferreiro-Parga, Fernandez, and
Broder respectively, pled guilty in the U.S. District Court for the
Southern District of Florida to criminal charges relating to the illegal
export of commercial foodstuffs and restaurant supplies to Cuba.
Ferreiro-Parga and Broder pled guilty to charges that they violated the
International Emergency Economic Powers Act, the Trading with the Enemy
Act, and the federal criminal conspiracy statute. Fernandez pled guilty
to charges that he violated the Trading with the Enemy Act and the
federal criminal conspiracy statute. The pleas were the result of a
nine-month investigation by Commerce Department's Office of Export
Enforcement field office in Miami, the U.S. Customs Service, and the
U.S. Attorney's Office in Miami.

On December 5, 1997, a U.S. District Court judge in Miami sentenced
Ferreiro-Parga to 18 months' imprisonment and two years' probation for
violating U.S. restrictions on trade with Cuba. On January 25, 1999, the
Commerce Department denied Ferreiro-Parga all U.S. export privileges
until December 12, 2007, pursuant to Section 11(h) of the Export
Administration Act. On February 2, 1998, the Judge sentenced Fernandez
to five months' imprisonment, two years' supervised release, five months
of which must be spent in home detention and imposed a special
assessment of \$250. The Judge sentenced Broder to five months'
imprisonment, two years' supervised release, imposed a fine of \$30,000
and a special assessment fee of \$200. On February 2, 1999, the Commerce
Department denied Broder all U.S. export privileges until February 2,
2007, pursuant to Section 11(h) of the Export Administration Act. Torres
was found not guilty in a jury trial. Borges remains a fugitive in the
case.

**IAN ACE/KARL CORDING/**

**A. ROSENTHAL**

On August 8, 1997, the Commerce Department's Under Secretary for Export
Administration, William A. Reinsch, affirmed an Administrative Law
Judge's recommended decision and order and denied Ian Ace's export
privileges for a period of 20 years, finding that Ace, Manager of A.
Rosenthal (Pty) Ltd., Capetown, South Africa, conspired with others to
export and exported U.S.-origin shotguns to Namibia and South Africa
without obtaining the proper Commerce Department licenses. The Under
Secretary furtherfound that, in connection with those exports, Ace made
false material statements of fact in connection with the preparation,
submission, or use of export control documents. Separately, on June 6,
1997, one of Ace's co-conspirators, Karl Cording, was also denied export
privileges for a period of 20 years. The Commerce Department's Office of
Export Enforcement field office in Los Angeles investigated the case.

**ELHAM ABRISHAMI**

On August 20, 1997, Elham Abrishami, of Dublin, Ohio, was sentenced to
two terms of five months to run consecutively following a guilty plea on
January 13, 1997, in the U.S. District Court for the Southern District
of Ohio, to charges of violating provisions of the Commerce Department's
Export Administration Regulations.

On August 3, 1998, the Commerce Department denied Elham Abrishami, of
Dublin, Ohio, all U.S. export privileges until August 20, 2007, pursuant
to Section 11(h) of the Export Administration Act.

Abrishami's conviction resulted from an investigation that disclosed
that Abrishami knowingly and willfully exported and caused to be
exported items on the U.S. Department of Commerce's Control List,
consisting of radio communications equipment valued at \$9,660, from the
United States to the United Arab Emirates for transshipment to Iran
without authorization from the Department, and with knowledge that the
radio equipment was destined for Iran, a country to which exports are
controlled for foreign policy purposes. Abrishami also pled guilty to
attempting to export defense articles, 100 Sectrone ST-25 Mobilcall
Encryption Modules, from the United States to the United Arab Emirates
for transshipment to Iran without first having obtained the required
U.S. Department of State license, in violation of the Arms Export
Control Act. This investigation was conducted jointly by the Commerce
Department's Office of Export Enforcement field office in Herndon,
Virginia, and the U.S. Customs Service.

**I.G.G. CORPORATION**

On July 17, 1997, I.G.G. Corporation (I.G.G.), King of Prussia, Pa., a
wholly-owned subsidiary of IGG Component Technology, Ltd., Portsmouth,
England, pleaded guilty in the U.S. District Court for the Eastern
District of Pennsylvania to knowingly exporting electronic components
from the United States to the Indian Space Research Organization (ISRO)
without the required export licenses. I.G.G. was assessed a \$50,000
criminal fine, a special assessment of \$200 and placed on probation for
five years. In addition, on July 17, 1997, Acting Assistant Secretary
Frank Deliberti ordered I.G.G. to pay a \$400,000 civil penalty to
settle allegations that I.G.G. exported U.S.-origin electronic equipment
knowing the goods were intended for end-use by ISRO without the required
export licenses in violation of the Commerce Department's Export
Administration Regulation that implements the Enhanced Proliferation
Control Initiative (EPCI). BXA had issued an "is informed letter" to
I.G.G. under the authority of EPCI advising that an individual export
license or reexport authorization was required for all exports to ISRO.
EPCI was established to prevent any exports of products to end-users
which are known or believed to be involved with the development of
weapons of mass destruction. I.G.G. was also denied export privileges
for a period of seven years. This denial was suspended for seven years
and will thereafter be waived if the company does not violate U.S.
export control laws during the suspension period. The case was
investigated by the Commerce Department's Office of Export Enforcement
field office in New York and the U.S. Customs Service, Philadelphia, PA.

**WILLIAM A. ROESSL**

On July 22, 1997, the Commerce Department's Under Secretary for Export
Administration William A. Reinsch issued a final decision and order
affirming the Administrative Law Judge's recommended decision and order,
finding that William A. Roessl of Beverly Hills, CA, when doing business
as Enigma Industries, exported a Floating Point Systems model 164 Array
Processor from the United States through Canada to the Federal Republic
of Germany without the required export license, and denying all of
Roessl's export privileges for ten years.

**SUBURBAN GUNS (PTY) LTD.**

On July 25, 1997, Suburban Guns (Pty) Ltd. of Capetown, South Africa,
was fined \$10,000 and placed on two-year's probation, and ordered to
pay a \$600 special assessment fee in the U.S. District Court for the
Southern District of New York, for illegally exporting shotguns, rifles,
and ammunition to South Africa. On March 23, 1998, the Commerce
Department imposed a 10-year denial of export privileges pursuant to
Section 11(h) of the EAA. The Commerce Department's Office of Export
Enforcement's field office in New York investigated the case jointly
with the U.S. Customs Service.

**LANSING TECHNOLOGIES CORPORATION**

On June 17, 1997, Lansing Technologies Corporation (Lansing
Technologies) , represented by its president, Red-Chin Yang, pleaded
guilty in the U.S. District Court for the Eastern District of New York
to exporting a vector computer processor and a data acquisition control
system to the People's Republic of China without obtaining the required
export licenses from the Department of Commerce. On October 16, 1997,
U.S. District Court Judge, Eastern District of New York, imposed a
\$10,000 fine and a \$400 special assessment on Lansing Technologies.
The case was investigated by the Department of Commerce's Office of
Export Enforcement field office in New York.

**SUMMIT MARKETING, INC.**

On September 26, 1997, Sanford Groetzinger, president and corporate
counsel of Summit Marketing, Inc., were convicted on four counts of
violating the Arms Export control Act in connection with the export of
numerous military aircraft components to Iran via France, without having
obtained the required export licenses from the Department of State. On
May 11, 1998, the Commerce Department denied Sanford Groetzinger and
Summit Marketing, Inc. all export privileges until September 26, 2005,
pursuant to Section 11(h) of the Export Administration Act. The Commerce
Department's Office of Export Enforcement field office in Boston
investigated the case.

**DELL COMPUTER CORPORATION**

On June 17, 1997, the Commerce Department imposed a \$50,000 civil
penalty on Dell Computer Corporation, of Austin, Texas, to settle
allegations that it violated the Export Administration Regulations. The
Department alleged that, on three separate occasions from March 1992
through June 1992, Dell shipped U.S.-origin computer equipment from the
United States to Iran without first obtaining the required validated
export licenses from the Department of Commerce. The allegations are the
result of an investigation conducted by Export Enforcement\'s Dallas
Field Office.

**DELFT INSTRUMENTS, N.V.**

On June 16, 1997, the Commerce Department imposed a \$50,000 civil
penalty on Delft Instruments, N.V., a firm located in the Netherlands,
to settle allegations that Delft made false statements to the Department
in connection with an enforcement action. The Department alleged that,
on five separate occasions between August 2, 1991 and February 10, 1992,
Delft made false and misleading statements of material fact to the
Department when Delft opposed the renewal of a 1991 temporary denial
order. The alleged false statements related to representations Delft
made to the Department concerning whether members of its Executive Board
knew that Delft had exported thermal imaging prototypes to Iraq and
Jordan without the required U.S. export licenses. Delft plead guilty in
1992 to charges that it had violated the Arms Export Control Act by
exporting U.S.-origin thermal imaging prototypes to Iraq without the
required export license. The allegations were the result of an
investigation conducted by Export Enforcement\'s Washington Field
Office.

**DIGITAL CREATIONS**

On June 13, 1997, United States District Court Judge William Walls of
the District of New Jersey fined Digital Creations Corporation of
Closter, New Jersey, \$800,000 for violating the Export Administration
Act and Regulations. In December 1994, Digital Creations Corporation had
plead guilty to charges that it illegally exported DEC computer
equipment to the People\'s Republic of China without first having
obtained therequired export license from the Commerce Department.
Lawyers for Digital Creations then requested postponement of the
sentencing. The case was investigated by Export Enforcement\'s New York
Field Office.

**LASERTECHNICS, INC.**

On May 30, 1997, the Commerce Department imposed a \$180,000 civil
penalty on the Albuquerque, New Mexico firm, Lasertechnics, Inc., for
allegedly exporting U.S.-origin thyratrons from the United States
without the required export licenses. While neither admitting nor
denying the allegations, Lasertechnics cooperated with BXA in connection
with the investigation, which was conducted by Export Enforcement\'s Los
Angeles Field Office. Based on the investigation, the Department alleged
that, on 36 separate occasions from November 1991 through March 1994,
Lasertechnics, Inc., exported U.S.-origin thyratrons from the United
States to Hong Kong, Ireland, Malaysia, and Singapore without first
obtaining the licenses required under the Export Administration
Regulations.

Thyratrons send a high voltage current through a device and can be used
as a nuclear triggering device, but can also be used for medical and
scientific purposes. Hydrogen thyratrons were controlled at the time of
the violations for nuclear nonproliferation reasons and are currently
controlled for anti-terrorism reasons. Payment by Lasertechnics of
\$80,000 of the civil penalty will be suspended for three years, and
thereafter waived provided that the company commits no violations of the
Export Administration Act or Regulations during the period of
suspension.

**AAT COMMUNICATIONS**

On June 10, 1997, the Commerce Department imposed the maximum civil
penalty of \$30,000 against AAT Communications of Staten Island, New
York, to settle allegations that, in shipping electronic test equipment
and communications components that AAT believed to be destined for Iran,
the company violated U.S. export control laws. On three separate
occasions between December 1990 and February 1991, AAT exported
U.S.-origin electronic test equipment and communications components from
theUnited States to the United Kingdom using general license G-DEST as
the authority to export the commodities. The Department alleged that AAT
misused general license G-DEST in making those exports because the
company knew or had reason to believe that the commodities would be
reexported from the United Kingdom to Iran. In each case, the reexport
of the commodities from the United Kingdom to Iran had not been approved
by the Commerce Department. The Department\'s allegations were based on
an investigation conducted by Export Enforcement\'s New York Field
Office.

**PRESIDENT TITANIUM/**

**HELLMANN INTERNATIONAL FORWARDERS/THYSSEN HANIEL LOGISTICS/JML
FREIGHTFORWARDING/ MORRISON EXPRESS CORPORATION**

On May 29, 1997, the Commerce Department imposed a \$125,000 civil
penalty on President Titanium of Hanson, Massachusetts, for allegedly
exporting titanium bars on 25 separate occasions from the United States
to various foreign countries, England, France, Germany, Sweden, South
Africa, Switzerland, and the Netherlands, without the required validated
licenses, in violation of the Export Administration Regulations. The
civil penalty imposed on President Titanium was the final settlement in
a series of related cases that were investigated by Export
Enforcement\'s Boston Field Office. The other four cases, detailed
below, involved the freight forwarders hired by President Titanium, and
resulted in the imposition of civil penalties on each of the forwarders.

On May 1, 1997, the Commerce Department imposed a \$15,000 civil penalty
on Hellmann International Forwarders, Inc., of Miami, Florida, for
allegedly preparing shipping documents that contained false information.
The Department alleged that on threeoccasions, the Chelsea,
Massachusetts, office of Hellmann prepared and used export control
documents to ship titanium bars from the United States to Sweden,
representing that the exports qualified for export under general license
G-DEST, when in fact a validated license was required.

On April 2, 1997, the Commerce Department imposed a \$30,000 civil
penalty on Thyssen Haniel Logistics, Inc**.**, of Atlanta, Georgia,
formerly known as Amerford International Corporation, for allegedly
preparing shipping documents that contained false information. The
Department alleged that, on six occasions, the Boston office of Thyssen
prepared and used export control documents for the purpose of effecting
exports of titanium bars from the United States to Germany, representing
that the exports qualified for export under general license G-DEST, when
in fact a validated license was required.

On March 26, 1997, the Commerce Department imposed a \$15,000 civil
penalty on JML Freight Forwarding, Inc., of Kearny, New Jersey, formerly
known as Jacky Maeder, Ltd., for allegedly preparing shipping documents
that contained false information. The Department alleged that, on three
occasions, the East Boston, Massachusetts, branch of JML prepared and
used export control documents for the purpose of effecting exports of
titanium bars from the United States to Switzerland, representing that
the exports qualified for export under general license G-DEST, when in
fact a validated license was required.

On February 26, 1997, the Commerce Department imposed a \$5,000 civil
penalty on Morrison Express Corporation, of Chelsea, Massachusetts, for
allegedly preparing a shipping document that contained false
information. The Department alleged that Morrison represented on a
shipping document that titanium bars could be exported under general
license G-DEST, when in fact a validated license was required.

**ADVANCED VACUUM SYSTEMS, INC. (AVS)**

On May 1, 1997, the Commerce Department imposed a \$5,000 civil penalty
on Advanced Vacuum Systems, Inc. (AVS), of Ayer, Massachusetts,
forallegedly exporting commodities to the People\'s Republic of China
(PRC) without obtaining the required export license. Based on an
investigation conducted by Export Enforcement\'s Boston Field Office,
the Department alleged that AVS exported a low pressure sintering
furnace and spare parts valued at over \$600,000 to the PRC without the
required export license. At the time of the export, the furnace was
controlled worldwide for nuclear nonproliferation reasons. Because the
company disclosed the alleged violation to the Department and took
effective action to resolve the problem, \$2,000 of the \$5,000 penalty
was suspended for three years. The suspended portion of the penalty will
be waived after three years as long as there are no further violations.

**COMPAQ COMPUTER CORPORATION**

On April 18, 1997, the Commerce Department imposed a civil penalty of
\$55,000 on Compaq Computer Corporation, of Houston, Texas, for
allegedly exporting computer equipment without obtaining the required
validated licenses, in violation of the Export Administration
Regulations. Based on an investigation conducted by Export
Enforcement\'s Dallas Field Office, BXA alleged that, on three separate
occasions from September 1992 through June 1993, Compaq exported
computer equipment from the United States to Venezuela, Chile, and the
People\'s Republic of China without obtaining the required validated
licenses. At the time of the exports, the computer equipment was
controlled for national security reasons. The penalty imposed reflects
the fact that Compaq disclosed the alleged violation to the Department
and took action to ensure that future exports would have the necessary
authorization from BXA.

**RMI TITANIUM**

On January 8, 1997, the Commerce Department imposed a \$160,000 civil
penalty on RMI Titanium, of Niles, Ohio, for alleged violations of the
Export Administration Act and Regulations. Based on an investigation
conducted by Export Enforcement\'s Washington Field Office, the
Department alleged that RMI Titanium violated the Export Administration
Act and Regulations when it made six shipments oftitanium alloy products
to France and Israel without obtaining the required export licenses. The
Department also alleged that RMI Titanium made false and misleading
statements of material fact on export control documents. The export of
these titanium alloy products from the United States is controlled for
nuclear nonproliferation reasons.

**NEW WORLD TRANSTECHNOLOGY**

On December 20, 1996, New World Transtechnology (NWT), Galveston, Texas,
plead guilty to a criminal information that charged the company with two
counts of violating the International Emergency Economic Powers Act, and
one count of making false statements. A criminal fine of \$10,000 was
imposed and a special assessment fine of \$600 was levied against NWT.
On March 19, 1998, the Department imposed a ten-year denial of export
privileges on New World Transtechnology pursuant to Section 11(h) of the
EAA.

Export Enforcement\'s Dallas Field Office initiated an investigation of
NWT based on information provided by Export Enforcement\'s San Jose
Field Office. As a result of the Dallas Field Office\'s investigation,
the criminal information filed in the Galveston, Texas, division of the
U.S. District Court for the Southern District of Texas, alleged that NWT
had exported three Sun Microsystems computers to a nuclear equipment
factory located in the People\'s Republic of China in August 1992,
without the required validated export license. It was also alleged that,
in October 1992, NWT attempted to illegally export a MIPS computer to
the same destination in the People\'s Republic of China. Export
Enforcement Special Agents seized another computer before it could be
shipped to China via Hong Kong.

**ALLVAC**

On January 22, 1997, the Department imposed a \$122,500 civil penalty on
Allvac, a Monroe, North Carolina, manufacturer, to settle allegations
that the company violated the Export Administration Regulations. Based
on an investigation conducted by Export Enforcement\'s Washington Field
Office, the Department alleged that Allvac made 48 shipments of titanium
alloy products from the United States toAustralia, China, France,
Ireland, Israel, Italy, Japan, Germany, Switzerland, Taiwan, and the
United Kingdom, as well as one shipment of a maraging steel product from
the United States to Germany, all without the required U.S. export
licenses. The shipments of the titanium alloy and maraging steel
products, which are controlled for nuclear nonproliferation reasons,
occurred from September 1991 to June 1993. Allvac voluntarily disclosed
these shipments to the Department, and the Department agreed to suspend
payment of \$47,500 of the penalty for one year, and then to waive
payment of that amount provided Allvac commits no violation of the
Regulations during that period.

KORELSKI/DOORNBOS GMBH/HELCO COMPANY, INC.

On December 18, 1996, the Department imposed a four-year denial of
export privileges on both Doornbos GmbH of Solingen, Germany, and its
general manager, Helmut Korelski, to settle allegations that they
conspired to evade export control laws which restrict shipments of
U.S.-origin equipment to Libya. As a result, neither Doornbos nor
Korelski may engage in any transaction involving commodities,
technology, or software exported from the United States.

Based on a joint investigation conducted by Export Enforcement\'s
Washington Field Office and the U.S. Customs Service, the Department
alleged that Doornbos and Korelski acquired U.S.-made machine parts and
construction equipment by claiming that the ultimate destination was
Germany, when in fact the goods were sold to the Dong Ah Consortium for
use in the Great Man-Made River Project in Libya. As a result of the
investigation, Doornbos and Korelski also plead guilty to one count of
conspiracy and Doornbos received a criminal fine of \$500,000 in U.S.
District Court in Ohio.

On February 19, 1998, the Commerce Department imposed a two-year denial
of export privileges and a \$90,000 civil penalty on Helco Company Inc.
of Warren, Ohio for allegedly conspiring to evade U.S. export laws that
restrict exports to Libya by selling equipment and spare parts for use
in construction in the Great Man-Made River Project in Libya to Doornbos
GmbH. As part of the settlement, \$40,000 of the civil penalty and the
denial of export privileges will be suspended and then waived provided
that Helco does not violate U.S. export control laws during the
suspension period. Helco also pled guilty in federalcourt to a criminal
charge of conspiring to export machine parts to Libya. Helco will pay a
\$250,000 criminal fine and a special assessment of \$200.

**SOMBERGS/ROTHCO**

On June 3, 1996, Milton Somberg, president of Rothco, Smithtown, New
York, and his son, Howard Somberg, vice president of the company, were
arrested by Special Agents from Export Enforcement\'s New York Field
Office and from the U.S. Customs Service. In a complaint filed in U.S.
District Court for the Eastern District of New York, the two were
charged with illegally exporting military and police products controlled
for export by the U.S. Departments of State and Commerce. The illegal
exports included stun guns, tear and pepper gas, handcuffs, night vision
equipment, semi-automatic ammunition magazines, deactivated hand
grenades and chemical protective suits. The illegal exports were
destined to various countries, including Japan, Peru, Bolivia, Paraguay
and the Czech Republic.

The investigation which led to the arrests began after the receipt of
allegations of possible links between U.S. military and police surplus
equipment firms and the Aum Shinrikyu (\"Aum\"), a Tokyo-based religious
sect whose leader was prosecuted for the March 20, 1995, fatal sarin gas
attack on the Tokyo subway system. The investigation revealed that, in
the days prior to the March 20 attack, a company owned by the Aum had
contracted with Rothco for the purchase and export of 400 Israeli-made
gas masks. On March 2, 1995, Rothco shipped ten cartons of the gas
masks, falsely labeled as \"facemasks,\" to Fremont, California, for
transshipment to Tokyo. U.S. Customs agents seized the gas masks prior
to their scheduled export to Japan.

**YUCHAI AMERICA**

On October 2, 1996, Yuchai America Corporation of Cleveland, Ohio,
agreed to pay a civil penalty of \$200,000 for alleged violations of the
Export Administration Regulations. As the result of an investigation
conducted by Export Enforcement\'s New York Field Office, the Commerce
Department alleged that, in May 1994, Yuchai America attempted to export
two five-axis milling machines to the People\'s Republic of China
without the requiredvalidated U.S. export license, and made false and
misleading statements of material fact on export control documents.
Yuchai America neither admitted nor denied the allegations.

Yuchai America is an affiliate of Yuchai Machinery Company, Ltd. of
China.

**SIGMA CHEMICAL COMPANY**

On July 8, 1996, the Commerce Department imposed a civil penalty of
\$480,000 on Sigma Chemical Company, based in St. Louis, Missouri, for
allegedly violating export controls on biological agents by shipping
U.S.-origin biotoxins to various countries on 48 separate occasions
between July 1992 and January 1993 without the required export licenses.
This action marked the first settlement with a firm alleged to have
exported biological agents illegally.

The investigation which led to this settlement began in 1992. It was
prompted by a General Accounting Office (GAO) study of U.S. and
international efforts to ban biological weapons, requested by
then-Senator Al Gore. After the follow-up investigation by BXA\'s
Chicago Export Enforcement Field Office, it became clear that Sigma's
export compliance system failed to properly interpret and implement the
licensing requirements of the Export Administration Regulations.

**MCKEEVE/MCNEIL INTERNATIONAL**

David McKeeve, a Scottish national, was arrested on November 2, 1995, by
Special Agents from Commerce\'s Export Enforcement Boston Field Office
and from U.S. Customs. At the time, McKeeve was attempting, but failed,
to export controlled computer equipment to Libya, via Cyprus. He and his
company, McNeil International, were subsequently indicted for violations
of both the Export Administration Regulations and of the Office of
Foreign Assets Control\'s Libyan Sanctions Regulations. He was also
charged with conspiracy and making false statements. On May 30, 1996,
McKeeve and McNeil International were found guilty on all charges in the
U.S. District Court in Boston, Massachusetts. On August 22, 1996,
McKeeve was sentenced to 51 months in federal prison, 36 months\'
supervised release, and a \$150 special assessment, while McNeil
Internationalreceived a criminal fine of \$125,000 and a \$200 special
assessment.

**JAMES L. STEPHENS/WEISSER\'S SPORTING GOODS**

On November 28, 1995, the Commerce Department imposed a 15-year denial
of export privileges and a \$60,000 civil penalty on James L. Stephens,
president and co-owner of Weisser\'s Sporting Goods, National City,
California, for the alleged illegal export of certain U.S.-origin
shotguns to Namibia and South Africa. Separately, on January 16, 1996,
Weisser\'s Sporting Goods was fined of \$30,000 and placed on three
years\' probation in the U.S. District Court for the Southern District
of California. Weisser\'s Sporting Goods had pled guilty to one count of
violating U.S. export control laws in connection with the export of
shotguns to South Africa in the District Court on November 20, 1995. The
case was the result of an investigation by the Commerce Department\'s
Los Angeles Office of Export Enforcement.

**STORM KHEEM**

Storm Kheem, a resident of Bayshore, New York, pled guilty on January
27, 1995, to violating provisions of the Commerce Department\'s Export
Administration Regulations that implement the Enhanced Proliferation
Control Initiative (EPCI). The EPCI regulations prohibit, *inter alia,*
U.S. persons from directly contributing to the design, development,
production, stockpiling, and use of weapons of mass destruction. The
investigation discovered that Kheem and others arranged to transport
ammonium perchlorate, a highly-explosive chemical used to manufacture
rocket fuel, from the People\'s Republic of China to Iraq via Jordan.
The chemical had been deliberately mislabeled as a non-explosive water
purification chemical to disguise its contents. The Commerce EPCI
regulations reached Kheem\'s activities regarding this transaction even
though it involved foreign-origin rocket fuel. Kheem also plead guilty
to violating the Iraqi Sanctions Regulations. This investigation was
conducted jointly by Commerce, Customs, and the FBI.

**TELEDYNE INDUSTRIES,INC./TELEDYNE WAH CHANG**

Teledyne Industries, Inc. plead guilty in two separate cases, one in
Miami, Florida, on January 26, 1995, and the other in Washington, D.C.
on January 27, 1995. In addition, a division of the company, Teledyne
Wah Chang of Albany, Oregon, was denied export privileges and fined by
the Commerce Department, all for illegally exporting zirconium and
making false statements on Commerce license applications and shipping
documents. In the Miami case, Teledyne Industries, Inc. was assessed a
\$3.9 million criminal fine for violations relating to zirconium exports
to companies controlled by Carlos Cardoen, a Chilean arms manufacturer.
Cardoen used the zirconium to make cluster bombs which he then sold to
Iraq. In the Washington case, Teledyne Industries, Inc. was assessed a
\$5,498,125 criminal fine for violations relating to zirconium exports
that were supposedly destined for Greece, but which actually were
rerouted to another destination.

Commerce imposed a \$2 million civil penalty against Teledyne Wah Chang,
the division that made the illegal exports at issue in the criminal
cases. Commerce also imposed a three-year export denial against Teledyne
Wah Chang, all but three months of which were suspended. During the
remainder of the denial period, the division was on \"probation.\" The
State Department also imposed a \$1.5 million civil penalty against
Teledyne Industries, Inc.

EDWARD A. JOHNSON AND SWISSCO MANAGEMENT GROUP, INC.

On August 7, 1995, Edward A. Johnson, an employee of Teledyne
Industries, Inc., was sentenced by a U.S. District Court judge in Miami
to 41 months\' imprisonment and fined \$25,000 for his role in illegally
exporting 150 tons of zirconium to Chilean arms maker Carlos Cardoen.
The zirconium was used as an incendiary agent in cluster bombs Cardoen
sold to Iraq in the 1980\'s.

Johnson was convicted by a jury in Miami on April 4, 1995, on charges of
conspiracy, false statements on export licenses submitted to the
Commerce Department, and violating the Arms Export Control Act. Evidence
presented in the eight-week trial showed that Johnson, a salesman at
Teledyne\'s Wah Chang division in Oregon, knew Cardoen was using the
zirconium to make cluster bombs for Iraq, even though export license
applications submitted to the Commerce Department claimed the end use
was for civilian mining purposes in Chile and Peru. Johnson was also
sentenced to three years\' supervised release after serving 41 months.
On April 28, the U.S. Court of Appeals for the 11th Circuit affirmed
Johnson's conviction. Additionally, the judge sentenced Johnson\'s
co-defendant at trial, Swissco Management Group, Inc., to pay fines
totaling \$1,309,230. The same jury that convicted Johnson found Swissco
guilty of conspiracy and violating the Export Administration Act.
Swissco is a defunct Miami company which acted as Cardoen\'s U.S.
purchasing arm on the zirconium sales. Teledyne was also a co- defendant
in the case, but settled pending charges before trial (see preceding
story).

**CARLOS CARDOEN**

Carlos Cardoen, the Chilean arms merchant involved with Teledyne in the
matters described above, and several related parties, were also indicted
in connection with the scheme to illegally export zirconium to Chile,
where it was used to manufacture cluster bombs for Iraq. Cardoen is a
fugitive from justice. Cardoen has paid \$8.6 million to resolve civil
forfeiture actions that arose from activities relating to the illegal
acts that are the basis for the indictment returned against him in
Miami.

**FIBER MATERIALS, INC.**

On March 31, 1995, Fiber Materials, Inc., a Maine corporation; its
wholly-owned subsidiary, Materials International of Acton,
Massachusetts; and the company\'s top two officers, Walter L. Lachman of
Concord, Massachusetts, and Maurice H. Subilia, Jr. of Kennebunkport,
Maine, were each found guilty of one count of violating the Export
Administration Act and one count of conspiracy. The evidence at trial
established that the defendants conspired to, and did, export a control
panel in April 1988 from the UnitedStates to the Defense Research
Development Laboratory in India, intending for it to operate a
production-size hot isostatic press to be subsequently provided by the
defendants. The control panel required a validated export license from
the U.S. Department of Commerce for export from the United States to
India. The evidence showed that no such license was ever obtained by the
defendants. The evidence also established that a production-size hot
isostatic press was, in fact, later manufactured in Europe at the
defendants\' direction, and shipped from there to India. In 1991 and
1992, defendants Subilia and Fiber Materials, Inc., directed employees
to travel to India to install and make fully operational the
carbon/carbon processing equipment in India, which included connecting
the control panel to the production-size hot isostatic press.

**HALLIBURTON**

On July 25, 1995, Assistant Secretary for Export Enforcement John
Despres signed an order assessing a civil penalty of \$2,610,000 against
the Halliburton Company of Texas. The civil penalty was the largest fine
imposed by the Department for export violations, and was part of a
global settlement related to unauthorized exports and reexports of oil
field equipment made to Libya by two Halliburton subsidiaries,
Halliburton Logging Services (HLS) and Halliburton Geophysical Services
(HGS). HLS exported six pulse neutron generators to Libya between
December 1987 and August 1989, and made three unauthorized exports of
pulse neutron generators to Kuwait or Yemen between August 1988 and
January 1989. HGS made 68 unauthorized reexports of spare parts to Libya
between April 1989 and April 1991, and one illegal export of U.S.-origin
technical data to Libyan nationals in Tunisia in May 1990. Resolving the
criminal proceedings in this case, a judge in the U.S. District Court
for the Southern District of Texas accepted Halliburton\'s plea
agreement with the U.S. Attorney\'s Office, and imposed a criminal
penalty of \$1,200,000 for three violations of the International
Emergency Economic Powers Act in connection with the export of the pulse
neutron generators to Libya.

**RECENT ANTIBOYCOTT CASES**

**JOHNS HOPKINS HEALTH CARE SYSTEM**

Johns Hopkins Health Care System agreed to pay a \$10,000 civil penalty
to settle allegations that it violated the antiboycott provisions of the
Export Administration Regulations by discriminating against an
individual in support of the Arab League boycott of Israel. The
Department alleged that Johns Hopkins discriminated against a United
States person because she was Jewish. The person had been seeking a
position with the company's International Services Department, which
markets medical services around the world, including the Middle East.
The Department believes that the discriminatory conduct was motivated by
the company's concern about having a Jewish person in that position
because of the Arab League boycott of Israel.

**KOCH PETROLEUM GROUP, L.P. AND KOCH REFINING INTERNATIONAL PTE.,
LTD.**

Koch Petroleum Group, L.P. and Koch Refining International Pte. Ltd.
agreed to pay a total of \$37,000 in civil penalties to settle
allegations that the two related crude oil trading companies violated
the antiboycott provisions of the Export Administration Regulations. The
Department alleged that Koch Petroleum Group, L.P., located in Wichita,
Kansas, and its subsidiary, Koch Refining International Pte. Ltd.,
located in Singapore, failed to report their receipts of requests to
engage in restrictive trade practices or boycotts, within the time
period prescribed by the regulations.

**SUNBEAM EUROPE, LIMITED AND COLEMAN BENELUX, B.V.**

Sunbeam Europe, Limited and Coleman Benelux, B.V., two foreign
subsidiaries of Sunbeam Corporation, a Florida-based consumer products
company, Sunbeam Europe, Limited, located in the United Kingdom, and
Coleman Benelux, B.V. located in the Netherlands, agreed to pay \$9,000
in civil penalties to settle allegations that they violated the
antiboycott provisions of the Export Administration Regulations. The
Department of Commerce alleged that Sunbeam Europe, Limited failed to
report its receipts of three requests to engage in restrictive trade
practices or boycotts as required by the regulations. The Department of
Commerce also alleged that Coleman Benelux, B.V. violated the
regulations when it agreed to refuse to do business with ships
\"blacklisted\" by the Israeli Boycott Office in Lebanon.

**ALARIS MEDICAL SYSTEMS, INC.**

On June 14, 1999, the Commerce Department imposed a \$35,000 civil
penalty on Alaris Medical Systems, Inc., a manufacturer of medical
devices, formerly IMED Corporation, of San Diego, California, to settle
allegations that the company failed to report the receipt of requests
from Kuwait to participate in the boycott of Israel. The Department also
alleged that the company failed to maintain records of reportable
boycott requests.

**LANGHAM TRANSPORT SERVICES, INC.**

On May 20, 1999, the Commerce Department imposed a \$2,000 civil penalty
on Langham Transport Services, Inc., a freight forwarder in
Indianapolis, Indiana, to settle allegations that Langham Transport
Services furnished information to a company in Dubai, United Arab
Emirates regarding another person's business relationships with or in
Israel. The company voluntarily disclosed the alleged violation and
cooperated fully with the investigation.

**SABRE GROUP, INC.**

On May 20, 1999, the Commerce Department imposeda \$5,000 civil penalty
on the SABRE Group, Inc. (SABRE), a Texas provider of travel-related
products and services, to settle allegations that, in a 1998 contract
with a company in Pakistan, SABRE agreed to refuse to subcontract any
work to Israeli-based businesses or individuals. Additionally, the
Department alleged that SABRE failed to report promptly its receipt of
the request to make this agreement. SABRE voluntarily disclosed the
transaction that led to the allegations and fully cooperated with the
Department's investigation.

**HANSON AGGREGATES WEST, INC.**

On April 8, 1999, the Commerce Department imposed a \$3,000 civil
penalty on Hanson Aggregates West, Inc., formerly known as Gifford-Hill
& Company, of Dallas, Texas, to settle allegations that it furnished
information about its business relationships with Israel and failed to
report the receipt of boycott requests. Hanson Aggregates West, Inc.
voluntarily disclosed the alleged violations to the Department.

**FRITZ COMPANIES, INC.**

On February 1, 1999, the Commerce Department imposed a \$12,000 civil
penalty on Fritz Companies, Inc. to settle allegations that its Houston,
Texas office, furnished information regarding another person's business
relationships with or in a boycotted country by certifying that the
goods shipped were not of Israeli origin, were not shipped from Israel,
and did not contain any material from Israel. The company voluntarily
disclosed the alleged violations to the Department.

**GROVE EUROPE LIMITED**

On December 22, 1997, the Commerce Department imposed a \$298,000 civil
penalty on Grove Europe Limited ("Grove Europe"), a controlled-in-fact
foreign affiliate of a U.S. company located in Sunderland, England, to
settle allegations that Grove Europe furnished information about its and
other companies' business relationships with or in Israel or with
companies known or believed to blacklisted. Also, the Department alleged
that Grove Europe agreed to comply with the Arab boycott of Israel in
connectionwith exports of U.S.-origin parts to Libya.

**HONGKONG AND SHANGHAI BANKING CORP.**

On July 24, 1997, the Commerce Department's Acting Assistant Secretary
for Export Enforcement, Frank Deliberti, imposed a \$23,000 civil
penalty on the New York branch of The Hongkong and Shanghai Banking
Corporation Limited of Hong Kong to settle allegations that the bank
confirmed a letter of credit from the United Arab Emirates that
contained a request for a certification that shipped goods were not of
Israeli origin. The Department also alleged that, in connection with
three other letters of credit from Qatar, the bank agreed to refuse to
do business with banks on the Arab boycott list or agreed to require
other persons to refuse to do business with companies on the Arab
boycott list, and failed to report, or failed to report in a timely
manner, boycott-related requests it received from Jordan, Oman, Qatar
and the United Arab Emirates.

**CACI/USAF/DOJ/HOOVER/**

**ALPERSON/ANDREW**

On February 27, 1997, the Commerce Department reached settlements with
the United States Air Force, an Air Force officer, the United States
Department of Justice and one of its employees, and a government
contractor, CACI Inc. - Commercial, and one of it employees, for alleged
violations of the antiboycott provisions of the Export Administration
Regulations.

During 1991 and early 1992, the U.S. Air Force and the Justice
Department were involved in defending a lawsuit brought against the Air
Force by a defense contractor. The Justice Department hired CACI Inc. -
Commercial to provide litigation support services, including sending a
team to Saudi Arabia for several months to microfilm documents. The
Department alleged that, in a November 1991 meeting conducted by Air
Force officers, representatives of the Justice Department and CACI were
told that Jews or people with Jewish surnames could not go to Saudi
Arabia as part of the microfilming team. In preparing for the
microfilming project, CACI drafted and the JusticeDepartment employee
edited an \"operations plan\" which included the following
\"Screening/Selection Process\" requirement:

\"\... No Jews or Jewish surnamed personnel will be sent as part of the
Document Acquisition Team because of the cultural differences between
Moslems and Jews in the Region. \... No Israeli stamped passport, as per
Saudi rules.\"

BXA had no evidence that the restriction was specifically requested by,
was required by, or was even known by the Government of Saudi Arabia.

In following the operations plan, Justice Department and CACI employees
screened, interviewed, and selected people to go to Saudi Arabia.
Eventually, a team was sent to Saudi Arabia. At least one U.S. person
was refused a place on the team based on religion or national origin. In
late 1995, the Anti-Defamation League of B\'nai B\'rith informed Export
Enforcement\'s Office of Antiboycott Compliance (OAC) of a complaint it
had received alleging religious discrimination in connection with a
litigation support project carried out in Saudi Arabia by CACI. Based on
that lead, OAC conducted an investigation lasting nearly eighteen
months.

As part of settlement agreements with the Department, both the U.S. Air
Force and the Justice Department, in separate letters, agreed to
institute measures to prevent a similar event from happening again.

Air Force Colonel Michael J. Hoover, then Chief of the Air Force
litigation team, agreed to settle two allegations that he violated the
antiboycott provisions of the Export Administration Regulations by
requiring or knowingly agreeing to require the Justice Department and
CACI Inc. - Commercial to discriminate against individuals based on
religion.

Jane Hadden Alperson, Office of Litigation Support, Civil Division,
Justice Department, the case manager involved in the microfilming
project, agreed to settle two allegations that she violated the
antiboycott provisions by agreeing to discriminate against individuals
based on religion or national origin, and subsequently taking a
boycott-based discriminatoryaction against a U.S. person on the basis of
religion.

CACI Inc. - Commercial, an Arlington, Virginia contractor and David
Andrew, the senior CACI employee involved in the microfilming project,
each agreed to settle three allegations that each violated the
antiboycott provisions by knowingly agreeing to discriminate against
individuals based on religion or national origin, taking a boycott-based
discriminatory action against a U.S. person on the basis of religion,
and, with respect to one particular individual, discriminating based on
religion or national origin.

**JACK H. BERG/SERFILCO**

On June 10, 1996, Under Secretary for Export Administration William
Reinsch signed an opinion affirming an Administrative Law Judge\'s (ALJ)
ruling in connection with the Commerce\'s Department\'s charges that
Serfilco, Ltd., an Illinois commercial filtration and pumping equipment
manufacturer, and its president, Jack H. Berg, committed 25 violations
of the antiboycott provisions of the Export Administration Regulations.
On December 7, 1995, the ALJ had upheld the Commerce Department\'s
charges, and imposed a penalty of \$118,000 on Serfilco, Ltd. and a
separate \$90,000 civil penalty on Berg. The ALJ also denied, for one
year, each party\'s export privileges to Bahrain, Iraq, Kuwait, Lebanon,
Libya, Oman, Qatar, Saudi Arabia, Syria, the United Arab Emirates, and
the Republic of Yemen. Berg and Serfilco appealed the ALJ\'s December 7
ruling to the Under Secretary for Export Administration, resulting in
his June 10 opinion.

In his initial decision and order, the ALJ found that, between January
and July of 1989, Serfilco and Berg each violated the prohibition
against furnishing business relationship information in responding to a
boycott questionnaire from a distributor in Iraq. The ALJ further found
that Serfilco failed to report to the Department its receipt, on seven
separate occasions between November 1988 and April 1990, of
boycott-related requests, as required by the Regulations.

Berg and Serfilco have refused to pay the civil penalties. At the
request of the Commerce Department, the U.S. Department of Justice
filed, in federal court, a law suit against Berg and Serfilco tocollect
the penalties. Following the Justice Department's filing of the law
suit, Berg and Serfilco settled the case with the Justice Department.

**PARBEL, COSMAIR, AND MISHKIN**

On August 29, 1995, Assistant Secretary for Export Enforcement John
Despres signed orders approving settlements that imposed civil penalties
totaling \$1,446,400 on Parbel of Florida, Inc., formerly known as
Helena Rubinstein, Inc., and Cosmair Inc., both subsidiaries of
L\'Oreal, S.A., the French cosmetic company, and Bruce L. Mishkin, for
291 alleged violations of the antiboycott provisions of the Export
Administration Act and Regulations. The companies and Mishkin each
agreed to pay the civil penalties in separate but related settlements
with the Department, which, combined, constitute one of the largest for
Export Enforcement\'s Office of Antiboycott Compliance (OAC).

Under the terms of the consent agreements, Parbel paid \$1,387,000, Mr.
Mishkin paid \$50,400 and and is the U.S. distributor for that company.
At the time of the settlement, Mr. Mishkin was associate corporate
counsel for Cosmair, Inc. At the time of the alleged violations, Mr.
Mishkin held that title, as well as the titles of Vice President,
General Counsel, and Corporate Secretary of Helena Rubinstein, Inc.,
which was, in 1989, a L\'Oreal-owned company that manufactured cosmetics
and skin creams. Cosmair paid \$9,000. Parbel of Florida, Inc., located
in Miami, Florida, is a subsidiary of L\'Oreal, S.A., located in Clichy,
France. At the time of settlement, Cosmair, Inc. was wholly-owned by
L\'Oreal, S.A.,

The Department alleged that, in 1989, in response to a request from
L\'Oreal, S.A., Helena Rubinstein, Inc. and Bruce Mishkin each furnished
or agreed to furnish 144 items of information about Helena Rubinstein,
Inc.\'s business relationships with or in Israel. The Department also
alleged that, on two separate occasions in 1989, Helena Rubinstein, Inc.
failed to report its receipt of a boycott-related request concerning its
business relationships with or in Israel. Finally, the Department
alleged that Cosmair, Inc. did not prevent Mr. Mishkin, one of its
employees, from furnishing information about Helena Rubinstein, Inc.\'s
business relationships with or in Israel. The Department alleged that,
in so doing, Cosmair, Inc. violated the Regulations by permitting the
doing of an act prohibited by the Regulations.

**BAXTER INTERNATIONAL INC.**

In March 1993, Baxter International Inc., a multinational manufacturer
and distributor of hospital and medical supplies based in Deerfield,
Illinois, two of its corporate affiliates and a corporate officer agreed
to pay a total of \$6,060,600 in civil penalties to settle allegations
of violating the antiboycott regulations. The Department also imposed a
denial of export privileges prohibiting Baxter, its affiliates,
subsidiaries, and employees from entering into, negotiating, or
extending contracts to export goods or technology to Syria and Saudi
Arabia from March 1993 until March 1995. Baxter also pled guilty in U.S.
District Court in Chicago to one felony count and was fined \$500,000.