Photo: Integra Technologies.
WASHINGTON, D.C. – On 23 December 2024, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced that it has imposed a $3.3 million fine on Integra Technologies, Inc. for export control violations related to the supply of technology components to Russia. This decision is part of a settlement agreement between BIS and the company, which pleaded guilty to supplying transistors and related products that can be used in avionics and radar systems without the necessary licences, Time Ukraine Israel portal reported, citing BIS.
Illegal shipments to Russia: violation of international sanctions
Integra Technologies, an engineering and manufacturing company headquartered in El Segundo, California, has made a number of illegal shipments of high-tech goods to Russia, including components on the Common High Priority List (CHPL). This is a list of goods that are essential to support Russia’s military programmes, including its weapons programme used during the aggression against Ukraine.
Between February and October 2023, the company sold transistors and other components worth about $6.67 million without obtaining the necessary permits from BIS. These shipments were made possible due to an incomplete export sanctions review process in Integra’s export compliance programme.
Pleading guilty and assisting in the investigation
Under the terms of the settlement agreement, Integra admitted 94 violations of the Export Administration Regulations (EAR) between February and October 2023. All of these violations were related to the export of goods through two third-party distributors to eight Russian end users. However, the company voluntarily notified BIS of its actions and actively cooperated with the investigation, which was the basis for the reduction of the fine.
Increased liability for export control violations
Matthew S. Axelrod, Assistant Secretary for Export Administration, stressed that BIS’s decision is intended to show other exporters the harsh consequences of violating the rules on supplying high priority items to Russia. “This penalty is a reminder to all companies that even accidental violations can have serious consequences,” Axelrod said.
For his part, John Sonderman, Director of the BIS Office of Export Administration, stressed the importance for US companies to keep abreast of changes in export sanctions, especially after Russia’s full-scale invasion of Ukraine. He noted that Integra failed to implement updated control procedures after the introduction of new sanctions, which led to serious violations.
Penalty for violation of export control
Pursuant to the Export Control Reform Act of 2018, Integra agreed to pay a fine of USD 3.3 million, but BIS agreed to defer payment of a portion of the fine of USD 1.5 million due to the company’s limited ability to pay. These steps were made possible by Integra’s voluntary disclosure and active cooperation with law enforcement authorities.
Continued control over the export of dual-use goods
This case is an important precedent for US companies that export dual-use goods, such as transistors and other technologies that can be used for both civilian and military purposes. The BIS decision underscores the importance of complying with international export standards, particularly with regard to the supply of critical goods to countries that violate international norms and engage in aggressive military actions.
Conclusions and lessons for the future
The case against Integra Technologies is yet another reminder of the importance of export control compliance in the face of increasing international sanctions, especially against countries such as Russia. It demonstrates that even minor violations can lead to serious financial and reputational consequences
