New York Solder Maker Settles Export Violations

A New York solder manufacturer settled violations associated with the sales of products to Russia valued at approximately $96,506. Indium Corporation of America cooperated with the investigation conducted by BIS’s Office of Export Enforcement (OEE) and took remedial measures after discovering the conduct at issue, which resulted in a significant reduction in the penalty. Indium was assessed a civil penalty of $180,000.

As alleged in the Proposed Charging Letter (PCL), between April 2022 and March 2023, Indium engaged in conduct prohibited by the Export Administration Regulations (EAR) on 11 occasions when it exported solder preforms, solder wires, and solder ribbon, valued at $96,505.89, to Russia without the requisite license or other authorization from BIS. The items exported by Indium are classified EAR99.

However, because these items were classified by Harmonized Tariff Schedule (HTS) codes that appeared on Supplement no. 5 to Part 746 of the EAR at the time of export, these items required a license for export to Russia pursuant to § 746.10(a)(1) of the EAR.

Supplement no. 5 to Part 746 of the Regulations identifies 'luxury goods' which requirea BIS license for export, reexport, or transfer (in-country) to Russia or Belarus. For the purposes of this license requirement, a 'luxury good' is any item identified in Supplement no. 5 to Part 746 of the Regulations, which includes the industrial metals products distributed by Indium.

As detailed further in the PCL, Indium encountered, but failed to appropriately address, red flags throughout these transactions, including:  

• Last minute changes to transactions associated with an originator in Russia
• Shipments planned for out of the way destinations and payments coming from thud-country parties or businesses not on an  end-user certificate
• Last minute changes to. shipping instructions that appear contrary to customer history or business practices

On May 19, 2023, after these violations occurred, the parties to Indium’s transactions—Inter-Trans Sp z.o.o., BMA Spedition GmbH, and Ostec Integra Ltd.—were added to the Specially Designated Nationals List by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC). These parties have facilitated hundreds of shipments of western electronics components to Russia since the beginning of Russia’s full-scale invasion of Ukraine. In particular, Ostec Integra Ltd. is one of 12 companies of the Ostec Group, which imports and distributes quantum and semiconductor technologies and supports Russian producers of various missile systems and aerial bombs. 

The full order, settlement agreement, and PCL are available online [Case ID E2978]