Notice2024-13508
In the Matter of: USGoBuy, LLC, 6804 NE 79th Ct., Building A, Portland, OR 97218, Respondent; Order Activating Suspended Portion of Civil Penalty and Activating Suspended Denial of Export Privileges Against USGoBuy, LLC
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 21, 2024
Issuing agencies
Commerce DepartmentIndustry and Security Bureau
Full Text
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<title>Federal Register, Volume 89 Issue 120 (Friday, June 21, 2024)</title>
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[Federal Register Volume 89, Number 120 (Friday, June 21, 2024)]
[Notices]
[Pages 52022-52024]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-13508]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
In the Matter of: USGoBuy, LLC, 6804 NE 79th Ct., Building A,
Portland, OR 97218, Respondent; Order Activating Suspended Portion of
Civil Penalty and Activating Suspended Denial of Export Privileges
Against USGoBuy, LLC
On June 17, 2021, then-Acting Assistant Secretary of Commerce for
Export Enforcement, Kevin J. Kurland signed an order (the ``June 17,
2021 Order'') approving the terms of a settlement agreement (the
``Settlement Agreement'') between the Bureau of Industry and Security,
U.S. Department of Commerce (``BIS''), and USGoBuy, LLC (``USGoBuy'' or
``the Company''). USGoBuy is a package forwarding company based in
Portland, Oregon that offers a service that allows non-U.S.-based
customers to purchase items online from U.S. retailers and have those
items shipped to the Company's warehouse in Oregon. USGoBuy then
consolidates various items ordered by its customers and re-packages the
items for export from the United States. USGoBuy also offers a
``BuyForMe'' service in which it purchases U.S.-origin items on behalf
of its customers, and then exports the items to a foreign addressee and
address provided by the customer.
The Settlement Agreement and the June 17, 2021 Order relate to an
enforcement action brought by BIS against USGoBuy for exporting
riflescopes, items classified under Export Control Classification
Number (``ECCN'') 0A987.a, controlled for Crime Control reasons, to
China and the United Arab Emirates, without seeking or obtaining the
licenses required for these exports, in violation of the Export
Administration Regulations (the ``Regulations'').\1\
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\1\ The Regulations are currently codified in the Code of
Federal Regulations at 15 CFR parts 730-774 (2024). The violations
at issue in the Settlement Agreement occurred in 2015. The
Regulations governing those violations are found in the 2015 version
of the Code of Federations (15 CFR parts 730-774). The 2024
Regulations set forth the procedures that apply to this matter.
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The Settlement Agreement and June 17, 2021 Order imposed on USGoBuy
a civil penalty of $20,000. USGoBuy was required to pay $5,000 of this
amount to the Department of Commerce by July 17, 2021. Payment of the
remaining $15,000 was suspended for a probationary period of three
years from the date of the June 17, 2021 Order, after which it would be
waived, provided that during this three-year probationary period,
USGoBuy paid the $5,000 non-suspended portion of the civil penalty,
committed no other violation of the Regulations, and completed an
independent, external audit (the ``Export Compliance Audit'' or
``Audit'').
The June 17, 2021 Order required that the Export Compliance Audit
cover the 12-month period after the June 17, 2021 Order and be in
substantial compliance with the Export Compliance Program sample audit
module published by BIS. To the extent USGoBuy identified any
violations of the Regulations through the Audit, the June 17, 2021
Order required USGoBuy to promptly provide supporting documentation
related to the violations and a detailed plan of corrective actions to
be taken.
In addition, the June 17, 2021 Order also imposed a three-year
denial of USGoBuy's export privileges under the Regulations. This
denial order was suspended pursuant to section 766.18(c) of the
Regulations, subject to the same probationary conditions described
above. According to the June 17, 2021 Order, if USGoBuy failed to make
full and timely payment of the non-suspended penalty, did not complete
the audit and submit the results as required by the Settlement
Agreement, or if USGoBuy committed additional violations of the
Regulations during the three-year probationary period, BIS could modify
or revoke the suspended
[[Page 52023]]
denial order and activate against USGoBuy a denial order including a
denial period of up to three years.
BIS has brought to my attention that following the imposition of
the June 17, 2021 Order, USGoBuy failed to implement corrective actions
in response to the 2015 violations and committed additional violations
of the Regulations during the probationary period in violation of the
June 17, 2021 Order.\2\ Moreover, even after identifying violations
that occurred during the probationary period, USGoBuy failed to
implement corrective actions to address those additional violations.
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\2\ USGoBuy also only paid the $5,000 non-suspended portion of
its monetary penalty on October 19, 2021--over 90 days after the
date established in the June 17, 2021 Order.
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Specifically, through the Export Compliance Audit, the results of
which USGoBuy submitted over 18 months after the June 17, 2021 Order,
USGoBuy identified significant continued deficiencies in its export
compliance program, including with respect to identifying items for
which export authorization may be required and related recordkeeping
requirements under the Regulations. The Company also identified through
the Audit 176 instances in which the Company failed to submit
Electronic Export Information as required by the Regulations and
additional exports for which the Company failed to maintain adequate
records as required by the Regulations. Despite identifying these
continued deficiencies through the Audit, USGoBuy did not implement
corresponding corrective actions to address the findings of its Audit
as required by the June 17, 2021 Order. Most notably, the Company did
not implement adequate enhancements designed to appropriately identify
items in the packages it exports that may require export authorization
from BIS and a corresponding process to either refrain from exporting
such items or to seek appropriate authorization.
Separately, in November 2022, Homeland Security Investigations
(``HSI'') intercepted a shipment of an item to USGoBuy on behalf of one
of the Company's customers. The item required authorization for export
from the United States to China. After intercepting the shipment, HSI
replaced the item with one that did not require authorization, and
added conspicuous markings to the outside of the package indicating
that authorization to export the package was required. HSI then allowed
the package to continue in transit to USGoBuy. Despite the conspicuous
export control markings on the package, USGoBuy exported the package to
China on the same day it received it without attempting to obtain
authorization. This event illustrates that despite being subject to a
suspended three-year denial order, USGoBuy did not have in place
appropriate export clearance procedures to prevent an unauthorized
export even where a package had explicit export control markings
notifying USGoBuy that export authorization was required.
As a result of the conduct described above, USGoBuy has violated
the probationary conditions relating to the suspension of the denial of
their export privileges. In accordance with sections 766.17(c) and
766.18(c) of the Regulations, by letter dated May 15, 2024 (the
``Notice Letter''), I provided USGoBuy with notice of my preliminary
determination that the Company violated the probationary conditions of
the June 17, 2021 Order and included a summary of the facts on which I
based my preliminary determination, which are also outlined above. The
Notice Letter provided the Company with an opportunity to respond and
to show why I should not activate the $15,000 suspended penalty amount,
issue an active three-year denial order against them, or take both
actions.
In response, USGoBuy submitted a written submission to me on May
30, 2024, which I fully considered. In the response, USGoBuy did not
dispute any of the facts outlined above that form the basis of my
determination that the Company violated the probationary conditions
related to the suspended penalties in this matter. In addition, USGoBuy
provided no explanation as to why it failed to implement adequate
compliance controls after the June 17, 2021 Order or after the findings
from the Audit. USGoBuy did outline in its response certain compliance
enhancements that it implemented in May 2024, but these enhancements do
not appear reasonably designed to address the Company's past violations
or to identify and prevent future potential misconduct. As a result,
the Company's response did not provide a sufficient showing as to why I
should not activate the suspended penalties in this matter.
Based on the totality of circumstances here, I have determined
within my discretion that it is appropriate to activate a denial order
for a period of three years.
It is therefore ordered:
First, for a period of three years from the date of this Order,
USGoBuy, LLC, with a last known address of 6804 NE 79th Ct., Building
A, Portland, OR 97218, and when acting for or on its behalf, its
successors, assigns, representatives, agents, or employees (hereinafter
collectively referred to as ``Denied Persons''), may not, directly or
indirectly, participate in any way in any transaction involving any
commodity, software or technology (hereinafter collectively referred to
as ``item'') exported or to be exported from the United States that is
subject to the Regulations, or in any other activity subject to the
Regulations, including, but not limited to:
A. Applying for, obtaining, or using any license, license
exception, or export control document;
B. Carrying on negotiations concerning, or ordering, buying,
receiving, using, selling, delivering, storing, disposing of,
forwarding, transporting, financing, or otherwise servicing in any way,
any transaction involving any item exported or to be exported from the
United States that is subject to the Regulations, or engaging in any
other activity subject to the Regulations; or
C. Benefitting in any way from any transaction involving any item
exported or to be exported from the United States that is subject to
the Regulations, or in any other activity subject to the Regulations.
Second, that no person may, directly or indirectly, do any of the
following:
A. Export or reexport to or on behalf of a Denied Person any item
subject to the Regulations;
B. Take any action that facilitates the acquisition or attempted
acquisition by a Denied Person of the ownership, possession, or control
of any item subject to the Regulations that has been or will be
exported from the United States, including financing or other support
activities related to a transaction whereby a Denied Person acquires or
attempts to acquire such ownership, possession or control;
C. Take any action to acquire from or to facilitate the acquisition
or attempted acquisition from a Denied Person of any item subject to
the Regulations that has been exported from the United States;
D. Obtain from a Denied Person in the United States any item
subject to the Regulations with knowledge or reason to know that the
item will be, or is intended to be, exported from the United States; or
E. Engage in any transaction to service any item subject to the
Regulations that has been or will be exported from the United States
and which is owned, possessed or controlled by a Denied Person, or
service any item, of whatever origin, that is owned, possessed or
controlled by a Denied Person if such service involves the use of any
item
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subject to the Regulations that has been or will be exported from the
United States. For purposes of this paragraph, servicing means
installation, maintenance, repair, modification or testing.
Third, after notice and opportunity for comment as provided in
section 766.23 of the Regulations, any person, firm, corporation, or
business organization related to a Denied Person by ownership, control,
position of responsibility, affiliation, or other connection in the
conduct of trade or business may also be made subject to the provisions
of this Order.
Fourth, any license issued pursuant to the Act or Regulations in
which USGoBuy has an interest of the date of this Order is hereby
revoked.
Fifth, this Order shall be served on USGoBuy, and shall be
published in the Federal Register.
This Order is effective immediately.
Matthew S. Axelrod,
Assistant Secretary of Commerce for Export Enforcement.
[FR Doc. 2024-13508 Filed 6-20-24; 8:45 am]
BILLING CODE 3510-DT-P
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</html>Indexed from Federal Register on June 21, 2024.
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