USGoBuy was found out of compliance with export control law for shipping rifle scopes and other items to countries considered national security threats.
A package forwarding company headquartered near Portland International Airport has drawn a three-year export ban for shipping rifle scopes and other sensitive technologies to geopolitical rivals of the U.S.
Trade officials said sanctions against USGoBuy were meant as a warning to other companies to heed shipping restrictions to countries considered possibly security threats including Iran and United Arab Emirates, the Wall Street Journal recently reported.
A 2021 settlement allowed the company to forego immediate penalties if it maintained compliance with export-control requirements. When it failed to improve compliance, the Department of Commerce issued a denial order, a rare move that signals a toughening approach to enforcement of restrictions on the export of sensitive technologies.
USGoBuy’s case dates to 2015 when the company was found to have shipped four rifle scopes to a buyer in Iran. In response, special agents with the Office of Export Enforcement met with company representatives to discuss export compliance, according to the settlement. USGoBuy was fined $20,000, $15,000 of which was suspended if it could maintain compliance for three years. The company was also ordered to conduct an internal audit, which turned up numerous compliance issues including 176 recordkeeping violations.
Following the audit, investigators with the Department of Homeland Security intercepted a package containing rifle scopes on its way to USGoBuy’s Portland warehouse. Agents removed the item and placed labels on the package stating an export-control license was required to ship the package. Regardless, the dummy package was shipped to China the next day.
Calls to USGoBuy’s executive director Ken Chen were not returned.
The denial order prevents USGoBuy from shipping most products outside the U.S. and could effectively shut down the company given its business model. Founded in Oregon in 2013, USGoBuy bills itself as the country’s largest and most reliable package forwarding company. Freight forwarders like USGoBuy allow customers outside the U.S. to avoid high international fees and shop with companies that don’t ship outside the U.S.
Scopes and other firearm accessories are listed among prohibited items on the company’s website.
The issuance of a denial order by the Commerce Department is a rare step last undertaken in 2018 when it forbade companies from doing business with Chinese telecommunications company ZTE Corp. due to ZTE’s work in North Korea and Iran, WSJ reports. Those actions were undone several months later by the Trump administration.
This move comes in light of an effort by the Biden administration to sharpen restrictions that limit the flow of technologies that could give an advantage to rival nations like Russia and China. The department’s Bureau of Industry and Security released guidance specific to freight forwarders in March.
One cause of the stepped-up enforcement is evidence that U.S. weapons components have been used by Russian forces on battlefields in Ukraine despite export measures meant to punish Russian President Vladimir Putin. Additional steps to address the problem of sensitive technologies in enemy hands include the Commerce Department sending trade data to more than 20 companies that manufacture drone and missile technology found to have been supplied to Russian forces. It further provided a list of 600 foreign parties that have sold restricted parts to Russia, WSJ reports.
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