Decoding Export Controls: Does The Latest BIS Settlement Signal A Trend In Increased Enforcement Actions Involving Encryption?

Last week, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) announced that Intel Corporation subsidiary, Wind River Systems Inc. (Wind River), agreed to pay a $750,000 civil penalty to settle charges that it sold encryption operating software products to foreign government end users and to organizations identified on the BIS Entity List without required Department of Commerce licenses. Intel acquired Wind River, a U.S.-based software vendor for embedded applications, through a stock purchase agreement. Through its not-so-cryptic message, BIS is demonstrating heightened enforcement efforts, with a focus on sensitive technologies.

The Wind River penalty stems from a voluntary disclosure filed in April 2012, when the company disclosed to BIS that it made four exports to various entities in China identified on the BIS Entity List between 2008 and 2011. Wind River also disclosed that during the same period, it made 51 unauthorized exports of