Corporate Law

Justice Targets Export Law Violations

Companies that ship products abroad in violation of U.S. export laws could find themselves in the sights of a new amped-up Justice Department enforcement program. Billed as a crucial component of the war on terrorism, it seeks to prevent American technology from being stolen by foreign companies.

Technology thefts are rampant, and prosecutors will target in particular the illegal transfer of weapons, components and products, such as medical devices, that can be retrofitted to be used as weapons components, Steven Pelak tells Bloomberg. An 18-year veteran, Pelak was appointed last month as the Justice Department’s first national export control coordinator.

Earlier this year, the department got a guilty plea–and an agreed $100 million penalty payment– from ITT Corp., after the White Plains, N.Y., defense contractor exported weapons-grade night-vision goggles to China. While the government is committed to prosecuting intentional violators, it is better for everyone if companies self-report any violations they discover, says Pelak. “It’s not in their economic interest to be involved in a grand jury investigation. It’s hugely expensive.”

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