BIS issues TDO to prevent ‘imminent EAR’ breach by Belgian exporter
The US Bureau of Industry and Security (‘BIS’) has announced that it has requested, through its Office of Export Enforcement (‘OEE’), the issuance of an order temporarily denying (for a period of 180 days) export privileges for ‘Hans De Geetere of Belgium and his company Knokke-Heist Support Corporation Management, also known as Hasa-Invest (“Knokke-Heist”) (collectively, “the Respondents”)’, so as to prevent an ‘imminent violation’ of the Export Administration Regulations (‘EAR’).
BIS said, ‘The OEE’s request and investigation are based, inter alia, upon facts indicating that De Geetere engaged in conduct prohibited by the Regulations by acquiring or attempting to acquire under false pretenses accelerometers, items subject to the Regulations, from the United States on behalf of prohibited end-users or for prohibited end-uses in China. The use of accelerometers by the aerospace and defense industries, and Respondents’ false statements made to U.S. companies to obtain the items, raises significant concerns of future violations absent the issuance of a TDO [temporary denial order].’
BIS said that, around April 2021, OEE detained a shipment of accelerometers being exported to a German company: ‘OEE obtained sales documentation for this shipment from U.S. Company 1, including an end-user statement wherein Knokke-Heist asserted that the items were being purchased on behalf of a Belgian Government agency.’
‘OEE subsequently informed Respondents that they were unable to confirm the alleged Belgian Government end-user and planned to advise U.S. Company 1 not to proceed with the transaction. Despite this warning, OEE received an email purportedly written by Knokke-Heist’s Belgian Government customer, copying De Geetere.’ The email, OEE found, ‘was fraudulent…and did not come from the Belgian Government.’
BIS said that, prior to that shipment, ‘De Geetere, via Knokke-Heist, had ordered approximately $360,000 worth of accelerometers via U.S. Company 1’s German distributor starting in or about July 2020. Notably, these orders started shortly after a Chinese distributor for U.S. Company 1, Shanghai Nova Instruments Company, Ltd, was placed on the Entity List on June 5, 2020, for being “involved in the procurement of items subject to the EAR for possible use in missile and unmanned aerial vehicle applications in China without the licenses required pursuant to §§ 744.3 and 744.21 of the EAR.’
Also, it said, OEE obtained evidence that at least some of the Respondents’ orders, ‘…were placed on behalf of China Aerospace Research Institute, an entity BIS has reason to believe is connected to or is an alias for the China Aerospace Science and Technology Corporation (“CASC”) 1st Academy Research Institute, a party also on BIS’ Entity List and the recipient of at least some earlier shipments from entity listed Shanghai Nova Instruments.In or about November 2020, shortly after an order for China Aerospace Research Institute was rejected by U.S. Company 1, Respondents attempted to obtain the same quantity and model of accelerometers from U.S. Company 1’’s German distributor.’
In issuing the Order, Matthew Axelrod, Assistant Secretary for Export Enforcement said,
‘A TDO is needed to give notice to persons and companies in the United States and abroad that they should cease dealing with De Geetere and Knokke-Heist in export or reexport transactions involving items subject to the EAR. Such a TDO is consistent with the public interest to preclude future violations of the Regulations given the serious national security concerns impacted by the misconduct and the clear disregard for complying with U.S. export control laws.’
