Commerce Temporarily Denies Export Privileges for Illegal Exports to Pakistan
The Commerce Department issued a Jan. 15 order temporarily denying export privileges for five people and five companies for involvement in an international procurement scheme to illegally export U.S. items to Pakistan. The scheme, announced in an indictment recently released by the Justice Department (see 2001150040), involved Muhammad Kamran Wali of Pakistan, Muhammad Ahsan Wali and Haji Wali Muhammad Sheikh of Canada, Ashraf Khan Muhammad of Hong Kong and Ahmed Waheed of the United Kingdom. It also involved Business World of Pakistan, Buziness World of Canada, Business World of Hong Kong, Hong Kong-based Industria Hong Kong Ltd. and Pakistan-based Product Engineering. The scheme involved attempts to export items to Pakistan’s Advanced Engineering Research Organization (AERO) and the Pakistan Atomic Energy Commission (PAEC), both of which are on the Entity List. The order denies their export privileges for 180 days from Jan. 15.
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To illegally export the items, the people filed false or misleading Electronic Export Information in the Automated Export System, the order said. All five people have continued “to seek similar U.S.-origin items” to illegally export as recently as September, Commerce said, and obtained those items as recently as November. The order also contains email addresses, family members and other identifying information for each of the five men, as well as individual cases in which they hid end-users from U.S. companies. The illegally exported items include industrial safety equipment, electronics and cartridge heaters. One member of the scheme, Ahsa, used a credit card in his name to pay for U.S.-origin items from a non-complicit U.S. company, Commerce said.
Commerce said the order is necessary to “stop transactions in progress” as the people are likely still attempting to illegally export from the U.S. And because the scheme’s procurement channel is structured to “avoid detection” through the use of third countries, Commerce said the shipments may “take several months” to complete, Commerce said.
In one instance, the people told a U.S. manufacturer that they were buying the items for intended use in hospitals throughout Pakistan, which involved a manufacturer named “Precision Engineering Services.” Commerce said the shipments were actually intended for PAEC. The people paid for the shipments using a wire transfer from Buziness World Canada. In another instance, the people bought cartridge heaters from a U.S. supplier to be delivered to Electro-Power Solutions of Hong Kong, a company with the same address as Business World Hong Kong and Industry Hong Kong. Commerce said the PAEC’s Instrumentation Control and Computer Complex requested the cartridge heaters from Business World Pakistan a few months earlier.
Those instances were just two of a “number of prior export transactions” where the people “obscured the originator of the transaction by incorporating middle parties and alternative entities and destinations.” The people should be denied export privileges “to prevent further diversion of U.S. origin items,” Commerce said, and a notice is “needed” to notify U.S. companies to stop business dealings with these people and companies.