A recent round of hefty fines for violation of U.S. trade laws is getting the attention of import-export pros. Nearly $200m in fines will have to be paid by ITT Corp., Chiquita Brands International and Baker Hughes Services International for various violations.
ITT was hit with the biggest penalty in a $100m settlement of a case involving export of controlled night-vision equipment to China, Singapore, and the U.K. without either the proper export license or written authorization from the Department of State. To make matters worse, ITT left critical information out of arms exports required reports and then failed to take corrective action in a timely way once aware of the problem. The fine would have been even higher if ITT had not finally self-reported to State.
Chiquita Brands International recently will pay $25 million to settle Justice Department charges that the company knowingly paid protection money to Colombian paramilitaries designated by the U.S. in 2001 as a foreign terrorist organization (FTO). Chiquita management did not react to the FTO designation until 2003, when it made a voluntary self-disclosure to the Justice Department regarding some 100 payments beginning in 1997 that totaled $1.7m. Chiquita executives, however, instructed their Colombian subsidiary to keep up the payments through mid-2004. The Columbian government could potentially prosecute Chiquita executives.
Baker Hughes Services International Inc. was fined $44m for violating the Foreign Corrupt Practices Act (FCPA)--the largest penalty ever levied under the act. The FCPA forbids companies and individuals from paying bribes to foreign government officials. The company pled guilty to violations of the anti-bribery provisions of the FCPA, conspiracy to violate the FCPA, and aiding and abetting the falsification of the books and records of its parent company, Baker Hughes Inc. The bribes totaled $4.1m and were made between May 2001 and November 2003, via an intermediary. The company understood that the bribes were destined for an official of Kazakhoil, the state-owned oil company of Kazakhstan.
Managing Imports and Exports, http://www.ioma.com