FEDEX Gets Hit by BIS for Shipments to Parties on the Entity List

Yes, even FEDEX can and does get hammered for Export Control violations. On April 24th, 2018 BIS reached a settlement for 53 violations of Part 764.2 of the EAR, namely facilitating unlicensed exports to parties listed on the entity list. The exports in question took place between July 1, 2011 and January 19, 2012 and involved shipments to Aerotechnic France SAS (“Aerotechnic”) and the Pakistan Institute for Nuclear Science and Technology (“PINSTECH”) both of whom were listed on the entity list when the exports occurred. The charging letter and accompanying settlement indicated FEDEX had used screening software that was not set for fuzzy logic and required full and exact names in order to register an entity list “hit.” That being the case in some cases a clean screen was registered when entering “Aerotechnic” when screeners failed to enter the second term “SAS” into the screening software.

The above case highlights the need for precise and accurate screening USING FUZZY LOGIC and not relying on exact terms when conducting compliance screens!

As a result of the above case FEDEX has been assessed a civil penalty in the amount of $US 500,000 due by May 24th and they are required to hire a consultant to conduct and submit to BIS a full audit of export records for the period 2017-2020 to ensure compliance with the entity and denied persons lists. That is what you call a lot of work for some accounting firm out there! And the first audit report covering 2017 and 2018 is due for delivery to BIS by November 30,2018. Good luck with that! Hitting FEDEX with export control violations– seems like low hanging but lucrative fruit for the US Government.

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