BIS Settles Backdating Case with Texas MRO Distributor

The Commerce Department's Bureau of Industry and Security (BIS) announced an administrative settlement against a Texas aviation supply firm, for the submission of a backdated document to make it appear that a transaction complied with the Export Administration Regulations (EAR) and for exporting military parts without BIS authorization.  

BIS identified the false document after requesting a copy of a Prior Consignee Statement (PCS) from against First Call International Inc., of Fort Worth, an aircraft and military vehicle spare parts distributor.

Exporters are required to obtain prior to utilizing License Exception Strategic Trade Authorization (STA).

First Call had not obtained the required statement, but instead of admitting the mistake to BIS, advised its overseas customer to back-date the PCS.

Without License Exception STA, this export would have required a license from BIS.

This settlement of $439,992 (partially suspended) also resolves the allegations set forth in a Proposed Charging Letter (PCL) regarding violations related to the export of certain military aircraft parts without the required BIS license or authorization to export to entities located in Malaysia and South Korea.   

Under the final order, First Call is required to provide export compliance training on the EAR to its relevant employees and has agreed to a one-year probationary period.

As a part of the settlement agreement, First Call agreed to pay $75,000, with the remaining penalty amount of $364,992 suspended due to the company’s financial condition. The remaining penalty amount will eventually be waived provided that First Call has complied with all provisions of the settlement agreement at the conclusion of the one-year probationary period.  

“BIS will not tolerate exporters undermining the integrity of our export control system through the submission of false or misleading information,” said Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod. “Today’s enforcement action once again highlights the need for companies who do business abroad to have robust training efforts and effective export compliance programs.”   

The full order, settlement agreement, and PCL are available online here.