BIS Imposes Penalty for Back-Dated Document

Oct. 4, 2024
By: Ashley J. Bodden

The Department of Commerce’s Bureau of Industry and Security (BIS) has again reminded exporters how important it is to be honest and accurate in filings. Last month BIS announced an enforcement action against First Call International Inc. (First Call) of Fort Worth, Texas for intentionally submitting backdated documents to appear in compliance with the Export Administration Regulations (EAR) and exporting certain military aircraft parts without a proper license.

BIS identified a false document was submitted after requesting a copy of a Prior Consignee Statement (PCS) that exporters are required to obtain prior to utilizing License Exception Strategic Trade Authorization (STA). The company had not obtained the required statement, but instead of disclosing its mistake, the company had advised it overseas customers to back-date the PCS. And without License Exception STA, the export would have required a license from BIS.

This settlement agreement signifies the importance of obtaining all the necessary documentations needed when using license exceptions, particularly license exception STA, and complying with U.S. export control regulations. BIS performs routine audits on companies that use license exceptions, therefore it is important for those companies to acquire all documentations when required and submitting only true and accurate documentations.

The settlement also highlights the importance of having a robust export compliance program, routine self-audits of export transactions, and honesty. Had the company discovered the export violation themselves and submitted a voluntary self-disclosure, or admitted its mistake during BIS’s audit, the settlement agreement may have ended differently. But alas, First Call is now required to provide export compliance training, one-year probation, and penalty amount of $439,992 (partially suspended pending compliance at the conclusion of probationary period).

Should you require any assistance with creating an export compliance program, or if you have discovered a violation and need assistance submitting a voluntary self-disclosure, please contact any attorney at Barnes Richardson and Colburn.