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, 52022-52024 [2024-13508]

Agencies

• DEPARTMENT OF COMMERCE
• Bureau of Industry and Security

[Federal Register Volume 89, Number 120 (Friday, June 21, 2024)]
[Notices]
[Pages 52022-52024]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[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

[[Page 52024]]

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