The Weekly Current

Compliance

In late July, the Department of Justice (DOJ) announced the closure of two cases as the trend toward enforcement continues.

Cadence Design Systems Inc. has agreed to plead guilty and pay over $140 million in criminal and civil penalties to resolve charges that it committed criminal violations of export controls.

Hardware, software, and semiconductor design intellectual property were sold to the National University of Defense Technology (NUDT), which is on the Department of Commerce’s Entity List. Employees failed to communicate with their Export Compliance personnel to obtain a BIS license, resulting in the violations.

“Protecting the U.S. semiconductor industry is critical to our national defense,” said Assistant Director Roman Rozhavsky of the FBI’s Counterintelligence Division. “Working with NUDT, which has been on the entity list for a decade for its work to advance China’s military capabilities, is unacceptable. The FBI will stop at nothing to defend the homeland from China’s Communist Party.”

In another case, a Lebanese national, Brian Assi, was sentenced to 44 years in prison for attempting to export heavy drilling machinery used for laying explosives for mining to Iran without a license, among other charges.

Assi provided false details to his employer’s U.S. entity and freight forwarders, indicating an end use in Iraq while diverting the goods to Iran through Turkey to circumvent export laws.