BIS recently released a Charging Letter, Settlement Agreement and Order pursuant to which pump maker Graco agreed to pay $97,000 to the Bureau of Industry and Security (“BIS”) to settle fifteen alleged violations of the Export Administration Regulations. The violations involved direct shipment of diaphragm pumps to locations requiring licenses as well as shipment of the pumps to distributors with knowledge that the distributor would reship the pumps without a license to destinations requiring a license.

The Settlement Agreement and the Order were dated June 22, 2007. The earliest violation occurred in 1999 and the latest violation in February 2002. All fifteen violations, accordingly, fell outside the relevant five-year statute of limitations set forth in 28 U.S.C. § 2462.

So why, some of you might ask, would Graco agree to pay a $97,000 to BIS even though BIS would have no power to collect the fine in federal court? Simple. Graco agreed to pay the amount to avoid denial of export privileges which is not subject to the statute of limitations. The bottom line for exporters is that the threat of denial of export privileges can be used to obtain a fine from exporters that would otherwise be barred by the statute of limitations.

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