Erdal Kuyumcu, the U.S. citizen and the CEO of the Woodside based Global Metallurgy, LLC, was penalized with a jail time for exporting to Iran, a metallic powder primarily composed of cobalt and nickel. Such metals are regulated by the U.S. Department of Commerce to combat nuclear proliferation and terrorism, thus exporting them without the required license from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) is prohibited. The exporter of record has obligations under General Prohibition 5 in § 736.2(b)(5) of the EAR which states that, ‘‘you may not, without a license, knowingly export or reexport any item subject to the EAR to an end- user or end-use that is prohibited by part 744 of the EAR.’’
The case include clear indicators that an unlawful diversion was present.
The company was reluctant to offer information about the end-user and end-use of the product being exported. In order to conceal the true destination from the supplier, the goods were diverted to Turkey prior initial export to Iranian steel company. Furthermore, the court documents stated that the Iranian company had the same address as an OFAC designated Iranian entity under the Weapons of Mass Destruction Proliferator sanctions program and along with that was associated with Iran’s nuclear and ballistic missile programs. Diversion risk is one of the red flags identified by Department of Commerce – Bureau of Industry and Security in supplement No. 3 to Part 732 — BIS’s “Know Your Customer” Guidance and Red Flags.
Acting Assistant Attorney General for National Security Dana J. Boente stated that by sentencing the defendant to over 4 years in prison he is being held accountable for his attempt with others to export more than a thousand pounds of metallic powder with nuclear and missile applications to Iran and the National Security Division will prosecute those who is looking to illegally provide dangerous material and technology to a state sponsor of terrorism.
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