BIS Renews Denial Order After Finding More Compliance ‘Failures,’ Potential Violations
The Bureau of Industry and Security this week renewed the temporary denial order (TDO) for three U.S. companies for their involvement in illegally exported technical drawings and blueprints to China (see 2206080068). The order, issued in June, was renewed for another 180 days, BIS said Dec. 5, partly because the agency found possible evidence of additional export violations.
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BIS originally suspended the export privileges for Quicksilver Manufacturing, Rapid Cut and U.S. Prototype, which share ownership, after they illegally exported their customers’ technical drawings to print satellite, rocket and defense-related prototypes in 3D. The companies sent these materials to Chinese manufacturers without their customers’ consent or knowledge and without required BIS licenses.
BIS’ Office of Export Enforcement said it renewed the order because it has evidence the companies’ “export compliance failures are broader in scope than the initial investigation revealed.” The agency also said it has “new concerns” about the companies “raised by actions taken after” BIS issued its order in June.
The agency said it has found additional companies that worked with Quicksilver, Rapid Cut and U.S. Prototype to illegally export “technical specifications” to China for gun components controlled under Export Control Classification Number 0E501.a and “space-rated items" controlled under ECCN 9E515.a. BIS also said it found “numerous additional suspected export control-related violations between 2017 and 2022.”
Additionally, BIS said the companies’ “attempts at compliance” since the June order “at best continue to fall short.” The businesses are continuing to provide “inaccurate information to customers about the scope of items subject to the” Export Administration Regulations, BIS said.
BIS also said the businesses may have violated the TDO. It said a China-based person who operates an @rapidcut.com email address may have provided customers with information on how to complete and fulfill pending orders despite the TDO. “Such information includes instructions to cancel existing Rapid Cut orders and reissue purchase orders to China Company No. 1, in an apparent attempt to avoid the restrictions of the TDO,” BIS said.
The “evidence presented by BIS convincingly demonstrates that Respondents have acted in violation of the Regulations; that such violations have been significant, deliberate and covert; and that given the foregoing and the nature of the matters under investigation, there is a likelihood of imminent violations,” the order said.
Spokespeople for the companies didn't respond to requests for comment. In an automated email response from their sales team's email, the companies are telling customers that BIS has "frozen our ability to service any and all jobs due to" its investigation. The company said it's "cooperating fully," is appealing the temporary denial order and is "optimistic to get it lifted. However, until we get clearance of this issue, please understand and respect our position. We are sorry" for "any inconvenience this action has caused you."