U.S. Bans Exports by Oregon Freight-Forwarder in Warning Shot to Industry

An Oregon freight-forwarder was hit with an export ban in what officials said was a warning to companies to heed restrictions on the shipment of sensitive technologies to countries the U.S. considers threats to national security.

The U.S. Commerce Department said on Monday it was imposing a three-year export ban on USGoBuy after the Portland-based company failed to improve its compliance with U.S. export-controls laws following a 2021 settlement. Under that agreement, the department had agreed to forgo any immediate ban—pending compliance improvements at the company.

That pact came to an end last week. The Commerce Department went forward with a so-called denial order, a rare step that could effectively shut down USGoBuy’s operations given the nature of the company’s business, an official said. Freight-forwarders allow customers in other countries to place orders for U.S. goods, which the companies then arrange to ship internationally.

A denial order by the Commerce Department’s Bureau of Industry and Security prohibits companies from continuing to export most goods from the U.S.

A representative of USGoBuy didn’t immediately respond to a request for comment Monday morning.

The last time the Commerce Department took such an action was in 2018, when it prohibited U.S. companies from selling products to Chinese telecommunications company ZTE Corp. Officials at the time accused ZTE of violating the terms of a settlement relating to allegations of sanctions-busting involving North Korea and Iran.

Just three months after imposing the ban, however, the Trump administration reversed it as part of a deal that placed ZTE under additional compliance-monitoring.

The use of the order against an American company comes as Commerce Department officials have sought to warn companies on the importance of complying with U.S. export-controls regulations. The U.S. has stepped up enforcement in particular to control the flow of technologies that might give an edge to global rivals such as Russia and China.

In March, the Bureau of Industry and Security released guidance specific to freight-forwarders on how to comply with the export-controls regulations it oversees.

The action against USGoBuy traces back to a 2021 settlement the company entered into with BIS after it was found to have shipped riflescopes to China and the United Arab Emirates.

The settlement required USGoBuy to conduct an audit of its compliance program. That audit found significant flaws, including apparent violations that had occurred after the agreement was in place, according to BIS. In total, the audit turned up 176 instances where USGoBuy had failed to make the appropriate export filings or maintain adequate export records, the bureau said.

The problems continued even after the audit, BIS said on Monday. In late 2022, the Department of Homeland Security’s investigations branch intercepted a package of an export-controlled item being sent to USGoBuy’s Oregon warehouse.

To test the company’s compliance procedures, BIS said agents removed the unidentified item and placed conspicuous labels on the box stating that an export-control license was required. Despite the labels, USGoBuy reshipped the dummy package to China the same day it was received, the bureau said.

Write to Dylan Tokar at [email protected]