The Bureau of Industry and Security recently released a Final Decision and Order fining Kabba & Amir Investments, Inc. dba International Freight Forwarders (“IFF”), a Canadian freight forwarding company, $6,000 for aiding and abetting the export of an x-ray film processor to Cuba in June 2000. Notwithstanding the potential penalties that could have been imposed on it, IFF represented itself in a hearing on the charges and made arguments that, well, illustrated the famous maxim about someone who represents themselves having a fool for a client and an idiot for a lawyer.

The underlying facts appeared not to have been in dispute. Kontron Instruments S.A., a French company, ordered four AFP Minimed 90 x-ray film processors from a U.S. company and had them shipped to IFF in Canada. Kontron directed IFF to remove all shipping and packing labels and documents, relabel the packages and ship the products to Cuba.

IFF took the matter to hearing in front of an ALJ and premised its defense on two arguments. First, that it didn’t know that the goods originated from the United States. Second, IFF argued that under Canadian law the exporter, not the shipper, was required to obtain any export license. Luckily, IFF can’t sue itself for malpractice.

The ALJ dismissed the preposterous argument that IFF didn’t know that the goods came from the U.S. by noting that IFF had admitted in its response to the initial BIS charging letter that it had been “advised to pickup a shipment from United States for furtherance to Cuba.” IFF probably also realized where the shipment came from when it removed the original shipping and packing labels and documents, but I suppose that’s just piling on.

Nor did IFF’s argument that Kontron, not IFF, needed to get the export license fare much better. Section 734.12 of the Export Administration Regulations (“EAR”) specifically states that compliance with foreign law does not relieve anyone from compliance with the EAR.

This case was pending as of October 16, 2007, IFF was subject to the increased $250,000 penalty. Given that IFF took the matter to hearing with, charitably speaking, two not very compelling defenses, IFF should be ecstatic that BIS imposed only a $6,000 fine.

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