26 February 2002
Source: http://usinfo.state.gov/cgi-bin/washfile/display.pl?p=/products/washfile/latest&f=02022502.elt&t=/products/washfile/newsitem.shtml


US Department of State
International Information Programs

Washington File
_________________________________

25 February 2002

Commerce Dept. Fines Firm for Illegal Export of Encryption Software

(Neopoint, Inc. to pay $95,000 for selling software to Korea) (340)

The Commerce Department's Bureau of Export Administration (BXA) has
imposed a $95,000 civil penalty on a California firm to settle charges
that the company exported encryption software to South Korea in
violation of U.S. export control laws, according to a February 21 news
release from the Department of Commerce.

The case of Neopoint, Inc. of San Diego "demonstrates" that the
government "can and will enforce its export controls on encryption
products," according to Assistant Secretary of Commerce for Export
Enforcement Michael J. Garcia.

Following is the text of the news release:

(begin text)

For Immediate Release
February 21, 2002

Penalty Imposed for 
Illegal Export of Encryption Software

The Commerce Department's Bureau of Export Administration (BXA) has
imposed a $95,000 civil penalty on Neopoint, Inc., of San Diego,
California, to settle allegations that the company exported encryption
software to South Korea in violation of U.S. export control laws.

BXA charged that, on ten occasions between March 1998 and June 1999,
Neopoint exported 128-bit encryption software to two firms in South
Korea without the required export licenses. In all but one of these
shipments, BXA alleged that Neopoint knew that an export license was
required. Neopoint cooperated fully with BXA's investigation of the
charges.

"This case demonstrates that the U.S. Government can and will enforce
its export controls on encryption products," said Assistant Secretary
of Commerce for Export Enforcement Michael J. Garcia.

BXA administers and enforces export controls on dual-use items and
technology for reasons of national security, foreign policy,
nonproliferation, anti-terrorism, and short supply. Criminal penalties
and administrative sanctions can be imposed for violations of the
Export Administration Regulations.

Assistant Secretary Garcia commended Special Agent Lou VanZant, from
BXA's Los Angeles Field Office, who investigated this case.

(end text)

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Department of State. Web site: http://usinfo.state.gov)