On October 3, 2011, Bureau of Industry and Security (BIS) reported that Flowserve Corporation of Irving, TX, and ten of its foreign affiliates have agreed to pay a civil penalty totaling $2.5 million to settle 288 charges for violating the Export Administration Regulations (EAR). Specifically, BIS alleges that Flowserve exported and reeexported pumps, valves and related components to Iran, Syria and other countries without the required licenses.
Flowserve is a supplier of goods and services to the oil, gas, chemical, and other industries. BIS alleged that between 2002 and 2008, Flowserve and six of its foreign affiliates exported items classified under ECCN 2B350 of the Commerce Control List (CCL) to various countries, including China, Singapore, Malaysia and Venezuela, without the required licenses. In addition, BIS alleged that six of Flowserve's foreign affiliates transshipped EAR99 items to Iran and/or reexported EAR99 items to Syria without the required U.S. Government authorization.
Flowserve voluntarily disclosed the violations and its cooperation with the investigation significantly reduced the penalty amount, according to BIS. In addition to the civil penalty, Flowserve and its affiliates will be required to conduct external audits of their compliance programs and submit the results to BIS.
In a related case, the Department of Treasury's Office of Foreign Assets Control (OFAC) settled charges with Flowserve for a total of 58 alleged violations of OFAC's Iranian, Cuban and Sudanese sanctions programs. Flowserve agreed to pay a $502,408 penalty to settle the OFAC charges.