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Belgian Unit of US company to pay $1.6M for illegal Syrian exports

A Belgian subsidiary of a US company has pleaded guilty to breaching export controls when it shipped components used in oil extraction equipment to Syria in 2006.

Robbins & Myers Belgium S.A. – a wholly owned subsidiary of Robbins & Myers Inc. who were acquired by National Oilwell Varco in 2013 – pled guilty to four breaches of the United States' International Emergency Economic Powers Act and the Export Administration Regulations following the export of components for oil extraction equipment to Syria between August and October 2006.

An internal audit of Robbins & Myers Belgium in May 2006 had identified previous shipments being likely to have been in breach of US law.  The Belgian company ignored directions to stop shipments to Syria and between August and October of 2006, four separate shipments of components milled from US origin steel were sent to a customer with operations in Syria.  Employees of Robbins & Myers Belgium also tried to hide documents relating to the four shipments from US government investigators.

Following a plea agreement with the Department of Justice, Robbins & Myers Belgium were fined $250,000 for each of the four shipments and separately agreed a civil settlement of $600,000 with the Department of Commerce.  They also agreed to forfeit the gross proceeds of the four shipments........$31,716.

Following sentencing, the US Attorney General for the District of Columbia made it clear that the US authorities will do whatever they can to enforce export laws.  He said, "The Department of Justice will hit companies that do business with Syria where it hurts most: the bottom line.  This company will pay fines, penalties, and forfeitures more than 50 times greater than the proceeds of its sales."

Comment

The approach and mind-set of the Department of Justice is laid bare for all to see.  Whilst the total value of the four shipments was modest, Robbins & Myers Belgium's disregard for the instruction their parent company issued and their subsequent attempts to cover their trail from Department of Justice investigators have clearly not assisted their cause.  Where companies are found to have knowingly breached export controls, the US authorities will use all their powers to secure substantial and significant penalties against offenders.  Sanctions may get most of the headlines – particularly the extension of sanctions against the Russian and Iranian oil and gas sectors - but companies must not lose sight of requirements placed upon them by export controls.

It is interesting that the problems here were identified by internal audit and that a direction was given by the parent company to stop shipments to Syria but that once that direction was given, it appears that there was no effective monitoring to ensure the shipments had in fact stopped.  Parent companies must have systems in place to monitor activities of their subsidiaries to ensure that they are not being exposed to potential violations of export controls or sanctions.

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