NET Global's Unlicensed Export of More Than 100 Tons of Sodium Cyanide and Potassium Cyanide to...

7/29/2019 NET Global's Unlicensed Export of More Than 100 Tons of Sodium Cyanide and Potassium Cyanide to Israel

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UNITED STATES DEPARTMENT OF COMMERCEBUREAU OF INDUSTRY AND SECURITYWA SHINGT ON, D.C. 2023 0

In the Matter of: )1New England Trading Global Inc.389 W. Elm Street 1Pembroke, MA 02359 ))1Respondent 1

ORDER RELATING TO NEW ENGLAND TRADING GLOBAL INC.The Bureau o f Industry and Security, U.S. Department of Com merce ("BIS") has

notified New England T rading Global Inc. ("NET Global"), of its intention to initiate anadministrative proceeding ag ainst NET Global pursuant to Section 766.18(a) of theExport Administration Regulations (the "~ e~ ula tio ns "), 'nd Section 13(c) of the ExportAdministration Act of 1979, as amended (the "~ ct" ),2 hrough issuance of a proposedcharging letter to NE T Global that alleged that NET Global committed thirteen violationsof the Regulations. Specifically, these charges are:

' The R egulations are currently codified in the Code o f Federal Regulations at 15 C.F.R.Parts 730-774 (2010). The violations charged occurred during 2004 ,200 5 and 2006.The Regulations governin g the violations at issue are found in the 2004 ,200 5 and 2006versions of the Code of F ederal Regulations (1 5 C.F.R. Parts 730-774 (2004-06)). The


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Charges 1-13 15 C.F.R. 5 764.2(a) - Engag ing in Prohib ited Conduct byExpor ting Sodium Cyanide and Potassium Cya nide to IsraelW ithout the Required LicensesOn thirteen occasions between on or about September 22,20 04, and on or aboutDecember 29,2 006 , NET Globa l engaged in conduct prohibited by the Regulations byexporting sodium cyan ide and potassium cyanide, items classified under Export ControlClassification Num ber ("E CC N) 1C350, controlled for reasons of chemical andbiological weapons proliferation, and valued at $242,779, to Israel without theDepartment of Comm erce license required by Se ction 742.2 of the Regulations. In sodoing, NET G lobal comm itted thirteen violations of Sectio n 764.2(a) of the Regulations.

WH EREA S, BIS and NET Global have entered into a Settlement Agreementpursuant to S ection 766.18(a) of the Regulations whereby they agreed to settle this matterin accordance with the terms and conditions set forth therein, and

WH EREA S, I have approved of the terms of such Settlemen t Agreement;IT IS THEREFORE ORDERED:

FIRST, that a civil penalty of $365,000 is assessed against NET Global. Paymentshall be suspended for a period of one year from the date of entry of this O rder andthereafter shall be w aived, provided that d uring the period of suspen sion, NET Global hascommitted no violation of the Act, or any regulation, order, or license issued thereunder.

SECON D, that the proposed charging letter, the Settlemen t Agreement, and thisOrder shall be made available to the pub lic.

This O rder, which cons titutes the final agency action in this m atter, is effectiveimmediately.


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UNITED STATES DEPARTMENT OF COMMERCEBUREAU OF INDUSTRY AND SECURITYWASHINGTON, D.C. 20230In the Matter of: 1

1New England Trading Global Inc.389 W. Elm Street 11Pembroke, MA 02359 1Respondent 1

SETTLEMENT AGREEMENTThis Settlement Agreeme nt ("Agreement") is made by and between New England

Trading Global Inc. ("NET Global") and the Bureau of Industry and Security, U.S.Departmen t of Comme rce ("BIS") (collectively, the "Parties"), pursuant to Section766.18(a) of the Exp ort Administration Regulations (currently codified at 15 C.F.R. Parts730-774 (20 10)) ( the "~ e~u lat ion s") ,issued pursuant to the Export Administration Act

of 1979, as amended (50 U.S.C. app. $8 2401-2420 (2000)) (the " ~ c t " ) , ~WHEREAS, BIS has notified NET Global of its intention to initiate an

administrative proceeding against it, pursuant to the Act and the Regulation s;

The violations alleged to have been committed occurred during 2004,20 05, and 2006.The Regulations governing the violations at issue are found in the 2004,20 05, and 2006versions of the Code o f Federal Regulations. See 15 C.F.R. Parts 730-774 (2004-06).


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Settlement AgreementNew England Trading Global Inc.Page 2 of 4WHE REAS, B IS has issued a proposed charging letter to NET Global that alleged

that it com mitted thirteen violations of the Regulations, specifically:Charges 1-13 15 C.F.R. 5 64.2(a) - Engaging in Prohibited Condu ct byExporting Sodium Cyanide and Potassium Cyanide to IsraelWithout the Required LicensesOn thirteen occasions betwe en on or about September 22,2004, and on or aboutDecembe r 29,20 06, NE T Global engaged in conduct prohibited by the Regulations byexporting sodium cyanide and potassium cyanide, items classified under Export ControlClassification Number ("E CC N) 1C350, controlled for reasons of chemical andbiological weapons proliferation, and valued at $242,779, to Israel without theDepartment of Comm erce license required by Section 742.2 of the Regulations. In sodoing, NET Global comm itted thirteen violations of Section 764.2(a) of the Regulations.

WHER EAS, NE T Global has reviewed the proposed charging letter and is awareof the allegations made agai nst it and the administrative sanctions which could beimposed against it if the allega tions are found to be true;

WHER EAS, NE T Global fully understands the terms of this Agreement and theOrder ("Order") that the Assistant Secretary of Commerce for Export Enforcement willissue if he approves this Agreement as the final resolution of this m atter;

WHE REAS, NE T Global enters into this Agreement voluntarily and with fil lknowledge of its rights;

WHER EAS, NE T Global states that no promises or representations have beenmade to it other than the a greements and considerations herein expressed;

WHE REAS, NE T Global neither admits nor denies the allegations contained inthe proposed charging letter;


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Settlement AgreementNew England Trading Global Inc.Page 3 o f 4NOW THER EFOR E, the Parties hereby agree as follows:1. BIS has jurisdiction over NET Global, under the Regulations, in

connection with the m atters alleged in the proposed ch arging letter.2. The following sanction shall be imposed against NET Global in complete

settlement of the alleged violations of the Regulation s relating to the transactions detailedin the voluntary self-disclosure and the proposed charg ing letter:

a. NE T Global shall be assessed a civil penalty in the amou nt of$365,000, all of wh ich shall be suspended for a period of one year from the dateof entry of the O rder and thereafter shall be waived, provided that during theperiod of suspension, NET Global has committed no violation of the Act, or anyregulation ord er, or license issued thereunder.3. Subject to the approval of this Agreement pursuant to paragraph 8 hereof,

NET Global hereby waives all rights to further procedural steps in this matter (exceptwith respect to any alleged v iolations of this Agreement or the Order, if issued), including,withou t limitation, any right to: (a) an administrative hearing regarding the allegations inany chargin g letter; (b) request a refund of any civil penalty paid pursu ant to thisAgreem ent and the Order , if issued; and (c) seek judicial review or otherw ise contest thevalidity of this Agreem ent or the Order, if issued.

4. Upon entry of the Order, BIS will not initiate any further administrativeproceeding against NET Global in connection with any violation of the Act or the


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' fSep 23 10 ll:30a NET Global

SettlementA p e m a tNe w England TradingGlobalInc.Page4 of46. This Agreement is for settlement pwposes only. Therefore,ifthis

Agreement is not accepted and theOrder is not issued by the Assistant SecretaryofCommerce orExport Enforcement pursuant to Section 766.18(a) of the Regulations, noParty may use this Agreement in any administrative or judicial proceeding and the PartiessbaIl not be bound by the terms contained in this Agreement in any subsequentadministrative or judicial proceeding.

7. Noagreement, nderstanding,representation or intapretation notcontained in this Agreementmay be usedto vary or otheMrise affect the terms ofthisAgreement or the Order, if issued,nor shall this Agreement serve to bind, constrain,orotherwise limit anyaction by any 0th gency or departnent of the U.S. Governmentwith respect to the facts andchurnstances addressed herein.

8. Tllis Agreement shall become bindingon the Parties only if theAssistantSecretary of Commerce for Export Enforcement approvesit by issuing the Order, whichwill have the same orceand effect as adecision and order issuedafter a fulladministrative hearingon the record.

9. Each signatory &inns thathe has authorityto enter into this SettlementAgreement and tu bind his respective party to the terms and conditions set forth herein,

BUREAUOF NIDUSTRY AND SECURITY NEW ENGLAND TRADING GLOBALZNTOF COMMERCE


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PROPOSED CHARGING LETTERCERTIFIED MAIL - RETURN RECEIPT REQUESTED

New England Trading Global Inc.38 9 W. Elm StreetPembroke, MA 0235 9Attn: Greigh R. AluisyPresident

Dear Mr. Aluisy:The Bureau of Ind ustry and Security, U.S. Department of Comm erce ("BIS"), has reasonto believe that New E ngland Trading Global Inc. ("'NET Global"), of Pembroke,Massachusetts, has comm itted thirteen violations of the Expo rt AdministrationRegulations ( the "~e ~u lati on s~ ') , 'w hic hre issued under the authority of the Ex portAdministration Act of 1979, as amended (the "~ c t " ) . ~pecifically, BIS charges thatNET Global comhitted the following violations:Charges 1-13 15 C.F.R. 5 764.2(a) - Engaging in Prohibited Conduct byExporting Sodium Cyanide and Potassium Cyanide to IsraelWithout the Required LicensesAs described in g reater detail in the attached Schedule of Violations, which isincorporated herein by reference, on thirteen occasions between on or about September22,20 04, and on or about December 29,2006, NE T G lobal engaged in conductprohibited by the Regulatio ns by exporting sodium cyanide and potassium cyanide, itemsclassified under Export Control Classification Numb er ("EC CN ) 1C350, controlled forreasons of chem ical and biologica l weapons proliferation, and valued a t $242,779, toIsrael without the Department of C ommerce license required by Se ction 742.2 of theRegulations. In so doing, NE T G lobal committed thirteen violations of Section 764.2(a)of the Regulations.

The Regulations are currently codified in the Code of Federal Regulations at 15 C.F.R. Parts 730-774


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I

1 New England Trading Global Inc.Proposed Charging LetterPage 2 of 3

Accordingly, NET Global is hereby notified that an administrative proceeding isinstituted agains t it pursuant to Part 766 of the R egulations for the purpose of obtaining an orderimposing admin istrative sanctions, including any or all of the follow ing:The m aximum civ il penalty allowed by law o f up to the greater of $250,000 perviolation or twice the value of the transaction that is the basis of the ~i o la ti o n ;~

Denial of exp ort privileges; andlorExclusio n from practice before BIS.

If NET G lobal fails to answ er the charges contained in this letter within 30 day s after beingserved with notice of issu ance of this letter, that failure will be treated as a default. See 15C.F.R. GG766.6 and 766.7 (2010). If NET G lobal defaults, the Adm inistrative Law Judge mayfind the charges alleged in th is letter are true without a hearing or further notice to NET Global.The Under S ecretary of C omm erce for Industry and Security may then impose up to themaximum penalty for the charges in this letter.NET Global is further notified that it is entitled to an agency hearing on the record if it files awritten demand for one with its answer. See 15 C.F.R. 9 766.6 (2010). N ET G lobal is alsoentitled to be represented by counsel or other authorized representative who has power ofattorney to represent it. See 15 C.F.R. $$ 766.3(a) and 766.4 (2010).The Regu lations provide for settlement without a hearing. See 15 C.F.R. 9 766.18 (20 10).Should NET G lobal have a proposal to settle this case, NET G lobal or its representative shouldtransmit it to the attorney representing BIS named below.NET Global is further notified that under the Small Business Regulatory Enforcement FlexibilityAct, NET G lobal may be eligible for assistance from the O ffice of the National Ombudsman ofthe Small Business Admin istration in this matter. To determine eligibility and get moreinformation, please se e: http://www.sba.gov/ombudsman/.The U.S. Coast Guard is p roviding adm inistrative law judge services in connection with the


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I New England Trading Global Inc.proposed Charging ~ e t t e rPage 2 of 3

U.S. Coast Guard ALJ Docke ting Center40 S. Gay StreetBaltimore, Marylan d 2 1202-4022

In addition, a copy of NET Global's answer must be served on BIS at the followin g address:Chief Counsel for Industry and S ecurityAttention: Thea D. R. Kendler, Esq.Room H-3839United States Department of Commerce14th Street and Constitution A venue, N. W.Washington, D.C. 20230

Thea D. R. K endler is the attorney representing BIS in this case; any comm unications that NETGlobal may wish to have con cerning this matter should occur through her. Ms. Kendler may becontacted by telephon e at (202) 482-5301 .Sincerely,

John SonderrnanActing DirectorOffice of Export Enforcem ent


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New England Trading Global Inc.Proposed Charging LetterSchedule of Violations

Charge12345678910111213

Date9/22/200410/06/200410/16/20041/08/200531 1212005611 612005912 11200512/07/20053/14/20064/08/20067/05/200610/04/200612/29/2006

DestinationIsraelIsraelIsraelIsraelIsraelIsraelIsraelIsraelIsraelIsraelIsraelIsraelIsrael

CommodityPotassium CyanideSodium CyanidePotassium Cyanide

Potassium Cyanide andSodium CyanideSodium CyanideSodium CyanideSodium CyanideSodium CyanidePotassium CyanideSodium CyanideSodium Cyanide

Potassium Cyanide andSodium CyanideSodium Cyanide

ECCN1C3501C3501C3501C3 501C3501C3501C3501C3501C3501C3501C3501C3501C350

InvoiceNo.30630 730 932 934238142245653 957 6654739844

Amount (kg)3,4065,5618,86810,288 (Sodium Cya nide)935 (Potassium Cyanide)1,8009,71415,2049,7731,588

16,53512,8139,600 (Sodium Cyanide)800 (Potassium Cy anide)12,752

Value$9,546$7,397

$16,323$20,965$7,740

$18,4 19$27,659$18,173$3,829

$33,589$24,128$22,804$32,207

Violation(s)15 C.F.R. 5 764.2(a)15 C.F.R. 5 764.2(a)15 C.F.R. 5 764.2(a)15 C.F.R. $ 764.2(a)15 C.F.R. 5 764.2(a)15 C.F.R. 5 764.2(a)15 C.F.R. 5 764.2(a)15 C.F.R. 5 764.2(a)15 C.F.R. 5 764.2(a)15 C.F.R. 5 764.2(a)15 C.F.R. 5 764.2(a)15 C.F.R. tj 764.2(a)15 C.F.R. 5 764.2(a)

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