BIS settles conspiracy charges with NY exporters

   The U.S. Commerce Department’s Bureau of Industry and Security on Thursday said Ping Cheng and Prime Technology Corp., both of New York state, agreed to $125,000 fines and two-year denial of export privileges for each to settle allegations that they conspired to violate Export Administration Regulations (EAR).
   The two-year denial period will be suspended as long as neither commits additional export control violations during the two year period, BIS said. The violations involve attempts to export carbon fiber to China for use by the China Academy of Space Technology(CAST) without the required U.S. government authorizations.
   The carbon fiber materials involved are controlled by BIS for nuclear nonproliferation and national security reasons and are valued at approximately $315,000. BIS alleged that from February 2007 through at least April 2008, Cheng and Prime Technology Corp. conspired with others to export two types of this material to CAST in China, via Hong Kong and Singapore, without the required Department of Commerce export licenses.
   As part of this conspiracy, Cheng traveled to Minnesota to inspect the carbon fiber and prepared reports regarding the authenticity of the material. During the inspection, Cheng was provided a letter from BIS which stated in part “(T)his (material) has been classified under Export Control Classification Number (ECCN) 1C210.a. and is controlled for export for Nuclear Non-Proliferation and Anti-Terrorism reasons. As such, a license would be required to export the item to most destinations, including China and Singapore.”
   Despite those warnings, Cheng, acting on the instructions of a co-conspirator, attempted to export the unlicensed carbon fiber to Hong Kong and Singapore, for ultimate shipment to CAST, BIS explained. The items were stopped prior to being exported, and Cheng was arrested by special agents from the BIS Office of Export Enforcement and the Department of Homeland Security.
   Under the terms of the BIS order, $75,000 in fines for each is suspended, and both are subject to a two-year denial order, fully suspended. Cheng and Prime Technology export compliance officers and employees, including the company’s president, will also attend export control compliance training. Additionally, for two years Prime Technology is required to retain an Item Classification Sheet for every item exported, or to be exported from the United States that is subject to the EAR, and is the subject of a transaction in which Prime Technology has an interest, BIS said.