BIS Issues Temporary Denial Order for Illegal Exports to Russia, North Korea
The Bureau of Industry and Security issued a temporary denial order last week suspending the export privileges of Russian company Radiotester OOO and owner Ilya Balakaev for illegally shipping “counterintelligence items” to Russia and North Korea. The denial order was released alongside a DOJ indictment charging Balakaev for smuggling devices used in foreign counterintelligence and military operations from the U.S. to Russia and “for the benefit” of Russia’s Federal Security Service and North Korea. Both Radiotester and Balakaev will be subject to a 180-denial order, barring either from exporting items or participating in transactions with items subject to the Export Administration Regulations.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Balakaev and others conspired to illegally export the electronic devices, which were subject to the EAR, since at least 2017, BIS said. The agency said Balakaev bought a range of “sensitive” electronic devices, including spectrum analyzers, signal generators and gas detection equipment, and used the spectrum analyzer and signal generator devices to repair equipment for Russia’s FSB. He also sold the gas detection equipment to North Korea, DOJ said, adding that he contracted with the Moscow-based “First Secretary of the North Korean Embassy to the Russian Federation.”
BIS said the export-controlled items are “commonly used as part of sensitive foreign counterintelligence and military operations, including to scan a room to determine if it was bugged, to transmit encrypted communications, and to detect hazardous gases.” Balakaev used a “network” of people to aid with the scheme, including a person in the U.S. and two Russian government officials.
Since 2017, Balakaev has entered into about 10 contracts with Russia’s FSB to repair about 40 spectrum analyzers and signal generators, BIS said. To complete the repairs, he bought about 43 devices in the U.S. and “frequently traveled” between Russia and the U.S. to obtain the devices, including through John F. Kennedy International Airport in New York. Balakaev also bought 30 additional spectrum analyzers, spectrum analyzer parts and other radio parts between April 2020 and March 2021 by having them shipped to his Virginia home.
In one instance in 2019, Balakaev bought an Altair 4X gas detector on the internet and had it shipped to his home, BIS said. Soon after, he traveled from Russia to the U.S. to obtain the gas detector and traveled back to Russia to give it to an official with the North Korean embassy in Moscow.
BIS said Balakaev has “demonstrated a pattern of conduct involving the illicit procurement” of EAR controlled items for Russia and North Korea. “Balakaev made statements to law enforcement that he intended to continue to procure EAR controlled items through other means and is still obtaining contracts through the FSB,” BIS said.