Download Export Violations - Bussiness Law - Notes and more Study notes Commercial Law in PDF only on Docsity! washingtonpost.com DirecTV Fined Over Subsidiary's Export Violations Technology Equipment Sales Could Aid Foreign Armies By Renae Merle Washington Post Staff Writer Wednesday, February 2, 2005; Page E01 DirecTV Group Inc. agreed to pay a $5 million fine for violating export control regulations and a 2003 agreement restricting its sales of commercial technology to military services in China and four other countries. DirecTV's subsidiary Hughes Network Systems Inc. sold equipment that can be used for voice and data transmission systems to China, India, South Korea, Turkey and South Africa, according to a settlement with the State Department. The company modified the equipment and provided services related to the sales without State Department approval in violation of export control rules. The activities also violated a 2003 settlement that followed a State Department investigation in which DirecTV, then known as Hughes Electronics Corp., and Boeing Co. agreed to pay $32 million for illegally transferring sensitive U.S. space technology to China during the 1990s. The latest violations, which occurred between 1993 and 2003, "provided the foreign recipients with a new capability to enhance secure satellite communications," according to the State Department. Chicago-based Boeing was not named in the latest violations. Under the latest settlement, which was finalized late last month, the department will not grant the company licenses to sell defense equipment overseas until May 14. The State Department charged the firm with 56 violations of export control and arms control regulations. The violations were similar to problems covered under the 2003 settlement and took place during the previous investigation and settlement discussions, according to State Department documents. The infractions "raise serious concerns on the part of the Department as to [the company's] adherence, commitment and implementation of the terms and conditions" of the agreement, Lincoln P. Bloomfield Jr., the department's assistant secretary of the Bureau of Political-Military Affairs, said in a Jan. 4 letter. They also reflect the company's inability to "convey to their employees the legal and regulatory requirements to monitor the export of defense articles and technical data," the department said. The consent agreement did not specify how much DirecTV earned from the sales or how many employees were involved. As part of the 2003 agreement, DirecTV also hired an outside special compliance officer to monitor the company's adherence to export control laws, but it did not notify him of the latest violations until six months after discovering them, according to the State Department documents. The company's "executive decision to fail to promptly notify the [officer] of these violations and to exclude him from access to the information and subsequent internal investigation" violated the 2003 agreement, Bloomfield said. Under the latest settlement, DirecTV agreed to hire another compliance officer.
