On May 24, 2012, the Office of Chief Counsel for Industry and Security (OCC/IS) assisted the Bureau of Industry and Security (BIS) in reaching a settlement agreement under which Ericsson de Panama, S.A. agreed to pay $1.75 million to address 262 violations of the Export Administration Regulations (EAR). BIS charged Ericsson de Panama with implementing a scheme to evade the EAR over a multi-year period, with regard to telecommunications equipment owned by the Cuban Government. The equipment was shipped to Panama, where it was repackaged to conceal its Cuban markings, sent with falsified paperwork to the United States for repair or replacement, and then exported back to Cuba via transshipment through Panama. The equipment involved is controlled under the EAR for national security, anti-terrorism, encryption, and sanctions reasons. The settlement also requires an external audit of all 2012 transactions involving items subject to the EAR that are exported or re-exported to Cuban customers by Ericsson de Panama or any of its corporate affiliates.
This settlement represents the latest in BIS’s enforcement efforts to ensure the integrity of the export control system. BIS plays an integral part in advancing the nation’s security, foreign policy, and economic interests, and investigations and settlements like this one uphold this vital mission. OCC/IS represents and supports BIS in all administrative enforcement matters.