BIS Fines California Machinery Company for Illegal Export to UAE
The Bureau of Industry and Security fined a California metalworking machinery company $60,000 for illegally exporting an item to the United Arab Emirates, BIS said in an April 30 order. The company, MDA Precision LLC, knowingly violated the Export Administration Regulations when it sold a $34,000 “five-axis benchtop milling machine” to the UAE without a license. BIS said the UAE customer likely intended to transfer the machine to Iran.
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MDA Precision exported the machine in 2015, BIS said, adding that it was subject to nuclear nonproliferation and anti-terrorism controls under the EAR. The company knew the item needed a license because it had applied for and received BIS licenses in 2013 and 2014 to export five other milling machines to Israel, Chile, China and other countries, the order said. Despite this, the company incorrectly wrote in a letter to its freight forwarder that the milling machine destined for the UAE was designated as EAR99 -- items that generally don’t require a license -- and didn’t need BIS authorization.
BIS also said MDA Precision didn’t obtain information on the end-user despite doing so for previous exports of the machine, and despite the fact that the machine was paid for in advance by a third party in the UAE that “had not been previously involved in the transaction.” BIS called this a “red flag.” The agency also had “reason to believe” that the UAE customer bought the machine on behalf of the University of Tehran in Iran and said the UAE customer at least once emailed MDA Precision from an internet protocol address in Iran. BIS said this indicated “that at least some of its communications originated in Iran.”
BIS said it will waive $35,000 of its $60,000 penalty if MDA Precision doesn’t commit another export violation during a two-year probationary period and pays the remainder of the fine. As part of a settlement agreement, the company must complete export compliance training within one year and submit its training certificates to BIS. The agency said it may revoke MDA Precision's export privileges if it doesn’t pay the fine or complete the training. MDA Precision didn’t comment.