By Here is a pretty hefty fine that was leveled on this Colorado based company:
A U.S. company is accused of illegally exporting defense technology used by the U.S. military to South Korea, China, Russia and Turkey, federal prosecutors said Wednesday.
Rocky Mountain Instrument Co., based in Colorado, said it is working toward a plea agreement with prosecutors and that it has been cooperating with investigators for more than two years.
Prosecutors allege that RMI, which manufactures optics components, exported prisms and technical data for optics used in military applications to the four countries from April 1, 2005, to Oct. 11, 2007. They say RMI did so without permission from the U.S. Department of State.
Federal officials did not elaborate what the technology was used for. U.S. District Attorney spokesman Jeff Dorschner declined to comment on whether the alleged crime compromised national security.
Prosecutors said the company will be forced to forfeit $1 million if convicted of a charge of knowingly and willfully exporting defense articles without a license. The amount represents the money the company obtained through the alleged offense.
RMI spokeswoman Tricia Heller said the company expects to reach a plea agreement within the next 45 days. She said she couldn’t comment on whether the plea would include any admission of wrongdoing. [CBS News]
5:35 pm on March 19th, 2010 1
In the headline, you are missing several other Asian countries that this Rocky Mountain named company issued to:
"A U.S. company is accused of illegally exporting defense technology used by the U.S. military to South Korea, China, Russia and Turkey"
Let us count our allies to the U.S. as deserving first, including bedfellows. That makes S.Korea and China exempt…
Im Soviet Russia, alliance makes you.
8:19 pm on March 19th, 2010 2
Actually, it is very difficult to export (as it should be) US MFR's defense articles to China. Almost everything to Korea can be shipped under EAR99/NLR, but often you have to wait a year to get a reply from State telling you that. What the article didn't make clear is that every exporter of defense related materials must be ITAR registered. Either this company wasn't ITAR registered (unlikely) or they were, but were shipping ITAR controlled items (and I'm pretty sure military grade optics are ITAR controlled) that required a license.
1:55 am on March 20th, 2010 3
Only taking their ill-derived profits as a punishment? Bah! They should get punitive fines of several times their profits from the illegal sales and their CEO should be criminally prosecuted, jailed, and permanently barred from being involved in exporting anything sensitive out of the country. Otherwise, it's just a slap on the wrist and indicates the feds aren't really serious about enforcing export controls on sensitive military products. Who cares if that drives them out of business? Someone else who can follow the laws will take up the slack.
3:56 am on March 20th, 2010 4
From "Photonics.com"
The company was bought in 1983 by Dr. Yubong Hahn -sound familiar?
Wow, I guess this isn't new to the company note the 2007 raid -
July 14, 2009 — Optical components maker Rocky Mountain Instrument Co. (RMI) has filed for Chapter 11 bankruptcy, citing the recession and a 2007 federal raid on the business as contributing factors, according to the Denver Business Journal.
Hahn also discussed the October 2007 raid on the business by officials from the Defense Criminal Investigative Service, or DCIS, that has not resulted in any charges against the business. At the time, local media reported that a convoy of about 50 cars containing members of Immigration and Customs Enforcement (ICE), DCIS and Lafayette police surrounded the business on the morning of Oct. 11. Agents were seen removing boxes from the business and loading them into a truck.
Ha, Ha, Ha, what a bunch of idiots the US has. How much and what technology and components were exported? What is wrong with the US?
6:18 am on March 20th, 2010 5
Dr. Yubong Hahn! What a great name!
Stoner: What's yer name, man.
Dr. Hahn: Doctor Hahn Yu-bong.
S: No, just a couple of aspirin. Now what's yer name?
DrH: Hahn Yu-bong.
S: Sure, man. If yer offerin', that's totally cool.
DrH: Tank you. My name is good name.
S: What's a good name? Now hand me bong.
DrH: No, not Hahn Mi-bong, Hahn Yu-bong.
S: Yes!
(uncomfortable pause)
S: So… hand me bong.
DrH: No! Hahn Yu-bong.
(pause)
S: Well get with it. I'm waiting.
DrH: Waiting for what?
S: Hand me bong!
DrH: No! Hahn Yu-bong.
S: You keep talking, man, but I ain't seein' any action. At least hand me jay.
DrH: No, Hahn Mi-jae my sister.
8:10 am on March 20th, 2010 6
You're a natural!
12:07 pm on March 20th, 2010 7
Sounds like a last gasp by Rocky Mountain Instuments to remain solvant by selling illegally.
Criminal charges should be brought against the company officers that did the dirty deed. If charges aren't forthcoming, one would have to wonder why?
12:40 pm on March 20th, 2010 8
They HAD to know that selling to China and Russia was something they should at least report through the ITAR application process. If they had sold to SK in the past and didn't require a license, a case could be made that they didn't think one would be needed for subsequent sales. Regardless, ignorance of the law is not an excuse and since 911, the State Department has taken ITAR compliance very serious. The application process to even receive an ITAR registration code is detailed, expensive and they make very clear that the company is to maintain an ITAR compliance program.
The only problem I have with the system is that they actually often cost companies to lose business as it often can take 4 – 6 months (or more) to get a reply on whether a license is needed or not. The problem with that is that a mfr is not going to make product until they know that and therefore, the customers end up going to Israel or Europe to buy product they can get quicker. Korea is generally an EAR99/NLR country, but you still have to go through the process. So let's say you seeking a ruling, get it in three months then take three months to mfr. That's a six month delivery. If you need a license, it takes three months to get the ruling, three months to get the license, and three months to mfr. Now you're looking at a 9 month delivery. Gawd forbid the rules change during any of that and you have to go back an re-apply! I'm not saying that's a good excuse to try and circumvent the system as it's not worth losing your export privileges.
The other problem I have (which you cannot really gleam from the article whether this is the case or not) is that the government is known to sit by and watch US companies export illegally (without doing anything to stop it) while they build a case. Kinda defeats the purpose of the controls if you ask me and makes it appear as if they're more interested in collecting fines than preventing the dissemination of products, materials and information that can be used against us.
12:52 pm on March 20th, 2010 9
It would seem obvious that the exports were illegal under the circumstances. So why aren't the perpetraters being prosecuted? Political influence?
As far as the government sitting by and watching US companies export illegally while they build a case is plausable, but what have you got to back it up?
1:32 pm on March 20th, 2010 10
I didn't suggest it wasn't illegal. They're probably not being prosecuted because the exports probably would have been approved if the company had just applied. In other words, more than likely, the problem is that they didn't do the appropriate paperwork. Therefore, it becomes civil rather than criminal offense. Also, it is the corporation that technically made the shipments… you can't throw a corporation in jail. However, you can ban the principals of the corporation, the ones that are listed on the ITAR registration documents, from exporting. IF the case can be made that they knowingly circumvented the export regulations by forging documents, etc., then yes, they can also be criminally charged. What they probably did was ship ITAR products under EAR99 when they should have received a DoS ruling. If they had, the DoS ruling may have required an export license (likely for Russia and China) while not requiring one for SK. However, since they didn't get a ruling first for SK, they where charged with violating ITAR regulations.
As for building cases…. I'm involved in an industry that often requires ITAR compliance. I attend ITAR compliance training seminars, etc. and often in those seminars they will tell you they build cases over time. My point is that if they see an illegal export taking place, they should intervene immediately. They often do, but there are many cases where they do not. Usually it's in cases where the violation is really about paperwork more than it is about treasonous activity.
As I mentioned on another blog regarding this case; more than likely the company ownership was 1) Ignorant (not keeping up to date on Export Compliance Laws) 2) Lazy (knew of the laws but didn't want to go through all the paperwork 3) Greedy (knew the laws but wanted to make quick sales to get money in the door and therefore, didn't want to go through the ITAR compliance process or 4) all of the above.
JMHO.
1:47 pm on March 20th, 2010 11
Thanks.
2:03 pm on March 20th, 2010 12
You're welcome.
7:25 pm on November 23rd, 2011 13
I suspect that this is just another example of business incompetence or greed. I would be inclined to believe business incompetence.
It is a shame that with so many very competent business people out of work and unemployed that businesses continue to keep staff and management lacking higher competence instead of seeking to hire the higher competent business people who are in the unemployed.
This is part of our US economic problems.
When will US businesses learn that it is time to recruit higher competence?