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Sun in talks over US export control allegations

Sun Microsystems negotiating a settlement with a U.S. government agency after being accused of violating US export controls.

Sun Microsystems negotiating a settlement with a U.S. government agency after being accused of violating US export controls. 

The Office of Export Enforcement at the US Department of Commerce's Bureau of Industry and Security (BIS) wrote to Sun in February 2002, charging that sales in Egypt in 1998 and to a reseller in Hong Kong in 1997 for subsequent resale to China violated US export control regulations.

BIS wrote to Sun again in April this year, documenting 19 additional charges.

All of the charges relate to Sun products shipped through third parties, according to Sun vice president of global communications and marketing Andy Lark, although Sun declined to name the companies involved.

If Sun is found to be in violation of the export controls, it could face financial penalties, or be denied export privileges.

BIS has proposed a settlement involving a financial penalty and a one-year suspended denial of export privileges, a denial that would not be enforced as long as Sun respected the export controls during the period.

Sun is negotiating with BIS over the scope of the proposed denial of export privileges. The company believed it would be reasonably likely to reach a negotiated resolution. If negotiations fail, the matter will go to an administrative hearing.

While it expected that the proposed financial penalties will not have a significant effect on its business, Sun admitted an export ban would hurt.

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