The US Department of Commerce’s Bureau of Industry and Security (BIS) has imposed a civil penalty of $3,300,000 against Integra Technologies, Inc., headquartered in California, for shipping transistors and related products to Russia, which can be used for avionics or radar systems in the war.
Following Russia’s full-scale invasion of Ukraine in February 2022, the US has imposed export controls aimed at cutting off Russia’s access to high-tech components, including semiconductors, software, and dual-use technologies that can be utilized for military purposes. However, Russia finds ways to evade sanctions, especially through third-party jurisdictions.
Integra Technologies radio frequency and microwave power solutions company exported approximately $6.67 million worth of unauthorised products to Russian end users between February and October 2023, conducting 94 separate shipments through third-party distributors, according to a BIS statement.
The exported items were designated as Common High Priority List (CHPL) products – components specifically sought by Russia for its defense industrial base and weapons programs used in Ukraine.
“To my knowledge, this is the first fine for an American component manufacturer for supplying CHPL-listed items to Russia through distributors, as a result of our cooperation with American colleagues,” noted Vladyslav Vlasiuk, Ukraine’s President’s Commissioner for Sanctions Policy.
According to him, there should be more such cases where manufacturers are held accountable for non-compliance with export control rules.
Despite the presence of intermediary distributors, Integra knew that Russians were the end users because it required its distributors to specify the name and country of the end user.
The company voluntarily disclosed the violations and cooperated with investigators, resulting in a significant reduction of the penalty.
Of the $3.3 million fine, $1.5 million has been suspended due to the company’s limited ability to pay. By the end of September 2027, Integra must pay $1.8 million. However, if Integra violates the terms of the settlement agreement, it will have to immediately pay the remaining fine.
According to the BIS, Integra’s export compliance program lacked procedures for regular review of Export Administration Regulations updates, leading to the company’s failure to recognize that these items required a license for export to Russia as of February 2023. The company maintained it believed the products were suitable only for civilian use.
The violations were discovered in October 2023, after which Integra immediately halted all shipments to Russian end users and filed a voluntary self-disclosure with BIS, the statement notes.
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