Jul

7

Mr. Gaillard Not So Gaillard Now


Posted by at 10:19 pm on July 7, 2010
Category: BISCriminal PenaltiesCuba SanctionsIran Sanctions

Oyster Bay Pump Works
ABOVE: Oyster Bay Pump Works

Patrick Gaillard, president of Oyster Bay Pump Works, a producer of automated liquid dispensing laboratory equipment, recently signed a consent agreement with the Bureau of Industry and Security (“BIS”) under which he agreed to a three-year denial order and a $300,000 fine, $275,000 of which was suspended for one year provided that he commits no further export violations. According to the charging documents, Gaillard shipped laboratory equipment made by his company to Cuba and Iran by transshipping the equipment through Germany and the U.A.E.

Back in 2007. Gaillard pleaded guilty to criminal charges arising out of one of these exports and was sentenced to 30 days in prison, a $25,000 criminal fine, three years of probation, and a $300 special assessment. And, apparently, as Mr. Gaillard walked out of prison after serving his time, there were his friends from BIS, who participated no doubt in the criminal investigation, waiting at the prison gate for a second bite at Mr. Gaillard’s apple. BIS is free to waive about the Supreme Court’s decision in Hudson v. United States, 522 U.S. 93 (1997), which held that subsequent administrative fines almost never violate the Double Jeopardy Clause, but that doesn’t make the double whammy fair or decent, particularly where BIS is knee deep in the criminal trial.

The charging documents also accuse Gaillard of “acting with knowledge,” but the facts supporting these charges don’t seem altogether consistent with that.

Gaillard had knowledge that violations of the regulations were occurring or were about and intended to occur because Gaillard knew of the U.S. embargo of Iran and that the items could not be exported to Iran without U.S. Government authorization. In or around November 2005, a sales representative from an Iranian company approached Gaillard for the sale and export of the items described above to Iran. When Gaillard declined, citing the U.S. embargo of exports to Iran, the sales representative arranged with Gaillard to have the items exported to the Iranian company’s trading arm in the U.A.E., from where the items would be transshipped to Iran.

This suggests that Gaillard may have held the common, but incorrect, belief that the Iran sanctions would not block an export to a country other than Iran. Once the item is in the foreign country, so the belief goes, it is the law of that foreign country which governs whether or not the item can be exported to Iran. If that is what Gaillard believed, it is hard to assert that Gaillard acted with knowledge that his actions were illegal even if his belief were incorrect.

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Copyright © 2010 Clif Burns. All Rights Reserved.
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4 Comments:


Im not certain if the argument here is that U.S. Taxypayers (and businesses)are paying way too much to protect “interests” in the Middle East, (which I would agree they are) or if the 300,000 fine would be more than enough to defend Mr. Gaillard, which all should understand, is doubtful.

If you ask him, Id bet he would agree the U.S.Government should find a better cause to focus our resources on.

Most people have had it with this boycott nonsense.

Comment by Mike Liberto on July 8th, 2010 @ 3:21 pm

What it “suggests” is that Galliard knew that it was illegal to export goods to Iran, but that he could get way with it if he transhipped through the UAE. The Statement- of-Facts from his criminal plea would substantiate that he knew it was illegal to use the UAE to divert or tranship goods to Iran.

Comment by 1811RTD on July 8th, 2010 @ 10:46 pm

The Statement of Facts in a criminal plea isn’t always a good indication of what really happened. That statement would need to say that he had such knowledge to support the plea. Defendants who are pleading to avoid trial will often be willing to admit things that aren’t true to support the plea, even though they aren’t supposed to do that.

What struck me here is that Gaillard rebuffs the Iranian customer at first saying that he can’t ship to Iran and he didn’t agree until the idea of transshipment was suggested by the customer. If he was intent on breaking export laws, he wouldn’t have declined to ship to Iran at first but would have suggested an export to an intermediary destination himself.

Granted that his view of the law would have been wrong, but it is a common mistake.

Comment by Clif Burns on July 9th, 2010 @ 7:18 am

Mike…

“Most people have had it with this boycott nonsense.”

I assume you mean embargo??

Comment by hotshot on July 10th, 2010 @ 11:52 am