PetroChina International America Settles U.S. Export Control Violation Charges for $14.5 Million

PetroChina International America (PCIA) has agreed to pay a fine and forfeiture totaling $14.5 million to resolve charges with the Department of Justice (DOJ) for violating U.S. export control laws. The DOJ announced Tuesday that PCIA, a subsidiary of PetroChina International, consented to the penalty after authorities found evidence of the company reporting inaccurate information in the Automated Export System (AES), an electronic database used by exporters to declare international exports from the United States.

The DOJ acknowledged PCIA's full cooperation in the investigation and its commitment to certain compliance undertakings. The investigation, conducted by the Department of Homeland Security, the Department of Commerce’s Bureau of Industry and Security (BIS), and Customs and Border Protection, revealed that in 2019 and 2020, PCIA misclassified over $32 million worth of ultra-low-sulfur diesel fuel as mineral oil mix for certain export transactions to Mexico.

The investigation commenced in December 2019 when Mexican authorities sought U.S. trade officials' assistance in clarifying discrepancies found in importation documents for a Panamanian oil tanker, the DOJ explained. “Authorities conducted a historical analysis of export data PCIA provided, which revealed additional exports that were misclassified and/or undervalued at the time of export and then entered into AES,” the DOJ stated in the release.

As part of the settlement, PetroChina agreed to enhance its compliance program and to provide details of its compliance efforts in an annual report to the U.S. Attorney’s Office for the Southern District of Texas over the next three years. “The forfeiture is a prime example of the U.S. government’s strong interagency partnerships working together to effectively target entities engaging in illicit activities abroad, especially those attempting to use the country’s own systems to facilitate that activity,” said Trey McClish, BIS special agent in charge, in the release. “BIS will continue to identify and disrupt those who attempt to profit from and circumvent U.S. export controls and regulations.”

PetroChina has yet to respond to requests for comment.

By fLEXI tEAM