The U.S. Commerce Department’s Bureau of Industry and Security on Friday said Ericsson de Panama S.A. of Panama City has agreed to pay a civil penalty of $1.753 million to settle 262 violations of the Export Administration Regulations (EAR).
Assistant Secretary of Commerce for Export Enforcement David W. Mills said the settlement “reflects the serious consequences that result when companies knowingly violate the EAR and take steps to conceal that activity. Companies must maintain vigilant compliance programs that extend to subsidiaries and affiliates wherever they do business.”
BIS alleged the violations occurred between 2004 and 2007, and Ericsson de Panama knowingly implemented a scheme to route items from Cuba via Panama, repackaged the items to conceal their Cuban markings, forwarded the items to the United States for repair and replacement and then returned the items to Cuba. Classified under Export Control Classification Numbers 5A002, 4A994, 5A991, 5B991 or designated EAR99, the items’ distribution to Cuba were controlled for national security, antiterrorism, encryption, and sanctions reasons, BIS said.
“While the conduct in this case was egregious, Ericsson de Panama avoided possible criminal prosecution and heavier fines by voluntarily disclosing the violations to BIS and cooperating with the investigation,” Mills said.
In addition to the monetary penalty, the settlement requires a company-wide export audit conducted by an independent third party of all transactions connected with Cuban customers.