PetroChina Fined $14.5 Million for US Export Scheme

PetroChina International America Inc. (PCIA) has entered into an agreement to pay a fine and monetary forfeiture totaling $14.5 million for violations of U.S. export law, including cargos misclassified and/or undervalued at the time of export and then entered into AES.

PCIA is a subsidiary of PetroChina International Co. Ltd., one of the largest oil and gas companies in the world. It was incorporated in New Jersey in 2003 and is principally located in Houston. The U.S. Attorney's Office, Southern District of Texas, prosecuted the case.

PCIA agreed to pay the fine and forfeiture after authorities discovered evidence they had reported inaccurate information in the Automated Export System (AES), an electronic database that exporters use to declare international exports from the United States. Specifically, PCIA misclassified more than $32 million of ultra-low-sulfur diesel fuel as mineral oil mix for certain export transactions to Mexico that took place in 2019 and 2020. 

The investigation that led to fine and forfeiture began in December 2019 after Mexican authorities discovered discrepancies between importation documents for a Panamanian oil tanker after it made entry in Port Veracruz, Mexico. Mexican authorities contacted U.S. trade officials for assistance in clarifying the discrepancies.

Authorities conducted a historical analysis of export data PCIA provided, which revealed additional exports that were misclassified and/or undervalued at the time of export and then entered into AES.

“PCIA misclassified or undervalued millions of dollars in petroleum exports using the U.S. electronic database that is trusted throughout the global marketplace for timely, accurate and reliable data and information,” said Dawson. “These actions helped facilitate illegal activity abroad and damaged America’s reputation as a leader in global trade. The entry of false or misleading information into export systems is a serious law violation. Working in conjunction with our domestic and international partners, we were able to uncover these violations of U.S. export law and levy a fine and forfeiture totaling $14.5 million to level the playing field for competitors and deter similar unlawful conduct in the future.”

“Today’s forfeiture is a prime example of the U.S. government’s strong interagency partnerships working together to effectively target entities engaging in illicit activities abroad, especially those attempting to use the country’s own systems to facilitate that activity,” said McClish. “BIS will continue to identify and disrupt those who attempt to profit from and circumvent U.S. export controls and regulations.”

PCIA has fully cooperated with the investigation into the export violations and has enhanced its compliance program. It has agreed to provide the U.S. Attorney’s Office with details of its efforts in a yearly report for the three-year-term.