Export, Customs & Trade - Enforcement Highlights

On October 5, 2005, the Department of Commerce, Bureau of Industry and Security ("BIS") entered an order under which ProChem (Proprietary), Limited ("ProChem") (as the successor to Protea Chemicals (Proprietary), Limited ("Protea")) of South Africa, agreed to pay $1,540,000 in civil penalties to settle charges that Protea had committed 220 violations of the Export Administration Regulations ("EAR") from 1999 to 2003 in connection with exports of potassium cyanide and sodium cyanide to South Africa. BIS alleged that Protea resold the potassium cyanide and sodium cyanide to end users in South Africa not listed on the original U.S. export licenses, and that Protea resold these chemicals knowing that the sales would violate the EAR. Although ProChem had no relationship with Protea at the time that all or nearly all of the alleged violations occurred, BIS assessed the penalty against ProChem on a theory of successor liability. Protea sold its business to an intermediate party in 2001, and