For Want of RegDOX, a Company Can Be Lost

We at RegDOX feel much sympathy, although admittedly mild frustration, when we learn of the export law enforcement actions by the State Department. Such actions that result in millions of dollars of fines followed by periods of intensive government internal involvement in the violators’ business.

We have sympathy for the cost, loss of reputation, and additional commercial liability incurred by the violators. Our frustration is because we know that with a small fractional investment in our ITAR/EAR technical data solution, the violations would have been avoided.

Recent Example:

The latest example of such an unnecessary incident is a recent State Department administrative settlement with South Carolina-based 3D Systems Corporation. This settlement was to resolve alleged Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR) violations. The settlement pertained to export law violations that occurred between 2012 and 2018. All involved technical data that could have been secured and controlled by the RegDOX solution to avoid wrongful mishandling.

These violations include unauthorized exports of technical data to Germany, unauthorized exports and retransfers of technical data to the People’s Republic of China, unauthorized reexports of technical data to Taiwan, unauthorized exports of technical data to foreign-person employees, and the failure to maintain ITAR records.

As part of the 36-month State Department Consent Agreement, 3D Systems will pay a civil penalty of $20,000,000. However, $10,000,000 of this amount will be spent on Department-approved measures to strengthen 3D’s compliance program. Additionally, the company will appoint an external Special Compliance Officer for at least one year and undergo two external audits of its ITAR compliance program. It will also implement additional compliance measures.

But 3D Systems’ troubles do not end there. It entered into a separate $7 million settlement with the Commerce Department for EAR violations at about the same time. Further, a shareholder class action lawsuit for inaccurate financial reporting has been brought and suits against corporate officers have been started. Even more, last month 3D Systems was informed that the Securities and Exchange Commission opened a formal investigation and served a subpoena on the company.

With a nod to the many claimed authors of the aphorism about the consequences of a want of a nail, it can be truly said that for want of a small investment in RegDOX, the most sophisticated ITAR/EAR technical data storage and collaboration solution on the market, corporate prosperity can be lost.

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