BIS Announces $2.5M Penalty Against Flowserve & Affiliates for Exports to Iran, Syria
The Bureau of Industry and Security announced on October 3, 2011 that Flowserve Corporation and ten of its foreign affiliates have agreed to pay a civil penalty totaling $2.5 million to settle 288 charges for violating the Export Administration Regulations by making unlicensed exports and reexports of pumps, valves and related components to Iran and Syria and other countries.
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Flowserve and Affiliates Allegedly Made Unlicensed Exports/Reexports to China, Venezuela, Syria, Etc.
BIS alleged that between 2002 and 2008, Flowserve and six of its foreign affiliates made unlicensed exports and reexports to a variety of countries, including China, Singapore, Malaysia and Venezuela, of items classified under Export Control Classification Number 2B350 and controlled for reasons of chemical and biological weapons proliferation. BIS also alleged that six of Flowserve’s foreign affiliates caused the transshipment of EAR99 items to Iran and/or the reexport of EAR99 items to Syria without the required U.S. Government authorization.
Will Have to Pay Penalty, Conduct External Audit and Disclose Results to BIS
In addition to the civil penalty, Flowserve and a number of its affiliates will also be required to conduct external audits of their compliance programs and submit the results to BIS. Flowserve’s voluntarily disclosure of the violations and its cooperation significantly reduced the penalty amount. In a related case, the Office of Foreign Assets Control (OFAC) settled charges with Flowserve alleging a total of 58 violations of its Iranian, Cuban and Sudanese sanctions programs. Flowserve agreed to pay a $502,408 civil penalty to resolve the OFAC charges.
OFAC information available here.