Nalco and U.S. Department of Commerce

8/9/2019 Nalco and U.S. Department of Commerce

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UNITED STATES DEPARTMEN T OF COMMERCEBUREAU OF INDUSTRY AND SECURITYWASHINGTON, D.C. 20230

In the Matter of : )1Nalco Company )1601 West Diehl Road 1Naperville, Illinois 6056 3 11Respondent

ORDER RELATING TO NALCO COM PANY

The Bureau of Industry and Security, U.S. Department of Commerce (BIS) hasnotified Nalco Company (Nalco), of its intention to initiate an administrativeproceeding against Nalco pu rsuant to Section 766.3 of the Export AdministrationRegulations (currently codified at 15 C.F.R. Parts 730-774 (2008 )) (the Regulations),1and Section 13(c) of the Export Administration Act of 1979, as amended (50 U.S.C. app.$6 2401 -2420 (2000)) (the ccActy): through issuance of a proposed charging letter toNalco that alleged that Nalco committed 13 violations of the Regulations. Specifically,these charges are:


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Charges 1-13: 15 C.F.R. 9 764.2(a) - Exports of Triethanolamine w ithout theRequired LicensesAs described in greater detail in the Schedule of Violations, wh ich is enclosed herewithand incorporated herein by reference, on 13 occasions, from on or about April 24,2 003through on or about September 1 1 ,2006, Nalco engaged in condu ct prohibited by theRegulations by expo rting hardness test kits containing Triethanolamine (TEA), itemssubject to the EAR and classified under ECCN3 1C395.bY n d o r replacement solutionscontaining TEA, items subject to the EAR and classified under EC CN 1C350, from theUnited States to the Bahamas, Dominican Republic and Angola, without the Departmentof Com merce licenses required by Section 742.2 of the Regulations. In doing so, Nalcocom mitted 13 violations of Section 764.2(a) of the Regulations.

WHEREAS, BIS and Nalco have entered into a Settlement Agreement pursuant toSection 766.18(a) o f the Regulations whe reby they agreed to settle this matter inaccordance with the terms and conditions set forth therein, and

WHEREAS, I have approved of the terms of such Settlement Agreement;IT IS THEREFOR E ORDERED :

FIR ST, that a civil penalty of $1 15,000 is assessed against N alco, which shall bepaid to the U.S. Department of Comm erce within 30 days from the date of entry of thisOrder. Paym ent shall be made in the mann er specified in the attached instructions.

SECO ND , that, pursuant to the Debt Collection Act o f 1982, as amended (3 I


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Accordingly, if Nalco should fail to pay the civil penalty in a timely man ner, theundersigned m ay enter an Order denying all of Nalco export privileges for a period ofone year from the date of entry of this Order.

FOURTH, that the proposed charging letter, the Settlement A greem ent, and thisOrder shall be made available to the public.

This O rder, which constitutes the final agency action in this m atter, is effectiveimmediately.

% f I c I ADarryl w J a c k s o wAssistant Secretary of Commercefor Export Enforcem entEntered this /a* day of - 2008.


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UNITED STATES DEPARTMENT OF COMMERCEBUREAU OF INDUSTRY AND SECURITYWASHINGTON, D.C. 20230

In the Matter of : 1)Nalco Company 1I601 W est Diehl Road 1Naperville, Illinois 60563 11Respondent 1

SETTLEMENT AGREEMENTThis Settlement Agreement (Agreement) is made by and between Nalco

Company (Nalco) and the Bureau of Industry and Security, U.S. Department ofCommerce (BIS) (collectively, the Parties), pursuant to Section 766,18(a) of theExport Administration Regulations (currently codified at 15 C.F.R. Parts 730-774 (2008))(the Regulations), issued pursuant to the Export Administration Act of 1979, asamended (50 U.S.C. app. $5 2401-2420 (2000)) (the

WHE REAS, Nalco filed a voluntary self-disclosure with BISs Office of ExportEnforcement in accordance with Section 764.5 of the Regulations concerning the


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Settlement AgreementNalco CompanyPage 2 of 5WHEREAS, BIS has notified Nalco of its intention to initiate an adm inistrative

proceeding against it, pursuant to the Act and the Regulations;WHEREAS, BIS has issued a proposed charging letter to Nalco that alleged that it

committed 13 violations of the Regulations, specifically:Charges 1-13: 15 C.F.R. 0 764.2(a) - Exports of Triethanolamine without theRequired LicensesAs described in greater detail in the Schedule of Violations, which is enclosed herewithand incorporated herein by reference, on 13 occasions, from on or about April 24,20 03through on or about September 1 1,2006 , Nalco engaged in conduct prohibited by theRegulations by exporting hardness test kits containing Triethanolamine (TEA), itemssubject to the EAR and classified under ECCN3 IC395.b, and/or replacement solutionscontaining TEA, items subject to the EAR and classified under ECCN 1C350, from theUnited States to the Bahamas, Dominican Republic and Angola, without the Departmentof Commerce licenses required by Section 742.2 of the Regulations. In doing so, Nalcocommitted 13violations of Section 764.2(a) of the Regulations.

WHEREAS, Nalco has reviewed the proposed charging letter and is aware of theallegations made against it and the administrative sanctions which could be imposedagainst it if the allegations are found to be true;

WHEREAS, Nalco fully understands the terms of this Agreement and the Order


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Settlement AgreementNalco CompanyPage 3 of 5

WHEREAS, Nalco neither admits nor denies the allegations contained in theproposed charging letter;

WHEREAS, Nalco wishes to settle and dispose of all matters alleged in theproposed charging letter by entering into this Agreement; and

WHEREAS, Nalco agrees to be bound by the Order, if entered;NOW THERE FORE, the Parties hereby agree as follows:1. BIS has jurisdiction over Nalco, under the Regulations, in connection with

the matters alleged in the proposed charging letter.2. The following sanction shall be imposed against Nalco in complete

settlement of the alleged violations of the Regulations relating to the transactions detailedin the voluntary self-disclosure and the proposed charging letter:

a. Nalco shall be assessed a civil penalty in the amount of $1 15,000,which shall be paid to the U.S. Department of Commerce within 30 days from thedate of entry of the Order.

b. The timely payment of the civil penalty agreed to in paragraph 2.a


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Settlement AgreementNalco CompanyPage 4of 5

without limitation, any right to: (a) an administrative hearing regarding the allegations inany charging letter; (b) request a refund of any civil penalty paid pursuant to thisAgreement and the Order, if entered; and (c) seek judicial review or otherwise contest thevalidity of this Agreement or the Order, if entered.

4. Upon entry of the Order and timely payment of the $1 15,000 civil penalty,BIS will not initiate any further administrative proceeding against Nalco in connectionwith any violation of the Act or the Regulations arising out of the transactions identifiedin the voluntary self-disclosure and in the proposed charging letter

5 . BIS will make the proposed charging letter, this Agreement, and the Order,if entered, available to the public.

6. This Agreement is for settlement purposes only. Therefore, if thisAgreement is not accepted and the Order is not issued by the Assistant Secretary ofCommerce for Export Enforcement pursuant to Section 766.1 S(a) of the Regulations, noParty may use this Agreement in any administrative or judicial proceeding and the Partiesshall not be bound by the terms contained in this Agreement in any subsequent


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Settlement AgreementNalco CompanyPage 5of 5

will have the same force and effect as a decision and order issued after a fulladministrative hearing on the record.

9. Each signatory affirms that he has authority to enter into this SettlementAgreement and to bind his respective party to the terms and conditions set forth herein.

BUREAU OF INDUSTRY AND SECURITYU.S. DEPARTMENT OF COMMERCE NALCO COMPANY

c1 Stephen N. Landsman--ik%a-w*Thomas MadiganDirector Vice-president, General Counsel andOffice of Export Enforcement Secretary


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CERTIFIED MAIL - RETURN RECEIPT REQUESTEDNalco Company160 1 West D iehl RoadNaperville, Illinois 60563Attn: J. Erik Fyrwald, Chairman, President and Chief Executive OfficerDear Mr. Fyrwald:The Bureau of Industry and Security, U.S. Department of Comm erce (BIS), has reason tobelieve that Nalco Comp any of Naperville, Illinois (Nalco) has com mitted 13 violations of theExport Administration Regulations (the Regulations), which are issued under the authority ofthe Export Administration Act of 1 979 as amended (the Act).2 Specifically, BIS charges thatNalco com mitted the following violations:Charges 1-13: 15 C.F.R. 5 764.2(a) - Exports of Triethanolam ine without theRequ ired LicensesAs described in greater detail in the Schedule of Violations, which is enclosed herewith andincorporated herein by reference, o n 13 occasions, from on or about April 2 4, 20 03 through on orabout September 11,2006, Nalco e ngaged in conduct prohibited by the R egulations by exportinghardness test kits containing Triethanolamine (TEA), items subject to the EAR and classifiedunder ECCN 3 1C395.bY nd/or replacement solutions containing TE A, items subject to the EAR


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Nalco CompanyProposed Charging LetterPage 2of 3Accordingly, Nalco is hereby notified that an administrative proceeding is instituted against itpursuant to Part 766 of the R egulations for the purpose of obtaining an order im posingadministrative sanctions, including any or all of the following:

The maximum civil penalty allowed by law of up to the greater of $250,000 per violationor twice the v alue o f the trans action that is the basis o f the violation:Denial of export privileges; and/orExclusion from practice before BIS.

If Nalco fails to answer the cha rges con tained in this letter within 30 days after being served withnotice of issuanc e of this letter, that failure will be treated as a default. See 15 C.F.R.$ 6 766.6 and 766.7. If Nalco defaults, the Administrative Law Judge m ay find the chargesalleged in this letter are true without a hearing or further notice to Nalco. See id. The UnderSecretary for Industry and Security may then impo se up to the maximu m penalty on the chargesin this letter. See id.Nalco is fur ther notified that it is entitled to an agency hearing on the re cord if it files a writtendemand for one with its answer. See 15 C.F.R. 0 766.6.' Nalco is als o entitled to be representedby counsel or other authorized representative who has power of attorney to represent it. See 15C.F.R. $ 5 766.3(a) and 766.4.The R egulations provide for settlement without a hearing. See 15 C.F.R. 0 766.18. ShouldNalco have a propo sal to settle this case, it or its represe ntative should transm it it to me throughthe attorney representing BIS named below.


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Nalco CompanyProposed Charging LetterPage 3o f 3In addition, a copy o f Nalco's answer must be served onBIS at the following address:

Chief Counsel for Industry and SecurityAttention: Glenn Kam inskyRoom H-3839United States Departme nt of Commerce14'hStreet and Constitution Avenu e, N.W .Washington, D.C. 20230Glenn Kam insky is the attorney representing BIS in this case. Any co mm unications that Nalcomay wish to have concerning this matter should occur through him. He m ay be contacted bytelephone at (202) 482-5301.

Sincerely,

Thomas MadiganActing DirectorOffice of Export Enforcement

Enclosure


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NALCO COMPANY - SCHEDULE OF VIOLATIONSDATES: 4/24/03-9/11/06

COUNTRY OFPURCHASER I DESTINATION DESTINATION

EXPORTTRANS DATE QUANTITY ULTIMATEACTION (mm/dd/yy) COMMODITY (Each) ECCNI1 04/24/03 1 1C395b SHERATON GRAND RESORT Bahamasnethanolamine - Test Kit2 06/13/03

1 1C39Sb HULL BLYTH ANGOLA LTD ESSO Angolanethanolamine- Test Kit3 1011 6/03 3 1C395b HUTCHINSON LUCAYA LIMITED Bahamasnethanolamine - Test Kit4 02/19/04 Tnethanolamine - Test Kit 3 1C39Sb CONSORCIO ENERGETICO PUNTA Dominican RepublicS 08/23/04 Tnethanolamine -Tes t Kit 1 1C39Sb HUTCHINSON LUCAYA LIMITED BahiUllas

Tnethanolamine - Bottle 6 1C350 c 9 HUTCHINSON LUCAYA LIMITED Bah'XTlaS6 11/03/04

7 03/24/05 Tnethanolamine -Bottle 1 1c3 soc 9Tnethanolamine - Test Kit 1 1C39Sb CONSORCIO ENERGE TICO PUNTA Dominican Republic

8 08/19/05 Triethanolamine Bottle 4 1C3SOc 9 COMPANIA DE ELECTRICIDAD DE BAYAHIB Dominican Repub lic9 1210 1 os WARTSILA DOMINICANA C POR A SULTANA

Tnethanolamine - Test Kit 1 1C39Sb DEL ESTE Dominican Repub lic10 02113/06

1 1C395b NESTLE DOMINICANA SA Dominican Republicnethanolamine - Test Kit11 0612 1 06 Tnethanolamine - Test Kit 1 1C39Sb LA ELECTRICIDAD DE SANTIA GO C Dominican Repub lic

Triethanolamine Bottle 5 IC3SOc 9 NESTLE DOMINICANA SA Dominican Republic12 01/2S/06-13 09/11/06 Triethanolamine Test Kit 1C39SbTriethanolamine - Bottle 6 1C3SOc 9 GILDAN DOMINICAN REPUBLIC TEXTILE Dom in~canRepublic

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Nalco and U.S. Department of Commerce

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