Koffsky Schwalb LLC
  • Home
  • Attorneys
    • Mark I. Koffsky
    • Efrem Schwalb
    • Gary Serbin
    • Steven A. Weg
    • Daniel E. Baron
    • Tal S. Benschar
  • Practice Areas
    • Business Law
    • Civil Litigation
    • Intellectual Property
    • Employment Law
    • Real Estate
  • Blog
  • Contact
Phone: (646) 553-1590 | Fax: (646) 553-1591

Beyond The Legalese

U.S. Government Fines Wind River Systems for Unlicensed Export of Encryption Technology in Software

10/31/2014

2 Comments

 
Picture
The U.S. government strictly regulates exporting sensitive technology outside its borders.  Depending on the nature of the technology and the country of export, a license from the Bureau of Industry and Security (BIS, part of the Commerce Department) may be required.  For Cuba, Iran, North Korea, Sudan or Syria, no export of any kind is generally allowed.

While some technology—such as nuclear energy and missile defense—are on the restricted list for obvious reasons, many businesses may be surprised to learn that encryption technology is also heavily regulated by BIS.   The regulations cover many common encryption algorithms used in both off-the-shelf and custom-built software, including open-source algorithms.  Any shipment of such software across the U.S. border could potentially be in violation of U.S. law and subject the exporter to a large fine or possible criminal sanctions.

Wind River Systems, a subsidiary of Intel, found this out the hard way.  On October 8, 2014, BIS announced a $750,000 penalty against Wind River Systems, for the unlawful exportation of 55 encryption software products to users in China, Hong Kong, Russia, Israel, South Africa, and South Korea.

Two things are worth noting.  First, because Wind River Systems voluntarily disclosed the violation to BIS, BIS reduced the penalty significantly.  Had BIS discovered the violation on its own, the fine would likely have been much higher.  Second, BIS’ action is unusual because it in involves a fine for export to countries other than those under a total export ban (Cuba, Iran, North Korea, Sudan or Syria).  Prior to this action, such violations usually resulted in a warning letter.

BIS’ upping the ante on encryption enforcement in software means that companies engaged in cross-border shipments of software should review their products to make sure that they are in compliance with export regulations.

2 Comments
legal case management link
11/28/2014 12:33:00 pm

The regulations cover many common encryption algorithms used in both off-the-shelf and custom-built software, including open-source algorithms.

Reply
hong kong company formation link
3/1/2017 03:40:40 am

It is extremely nice to see the greatest details presented in an easy and understanding manner.

Reply



Leave a Reply.



    Categories

    All
    Civil Procedure
    Constitutional Law
    Copyright
    Corporate
    Employment Law
    International
    Internet
    Litigation
    Media
    Patent
    Privacy
    Real Estate
    Software
    Tax Law
    Trademark


    Archives

    June 2017
    May 2017
    April 2017
    March 2017
    January 2017
    December 2016
    November 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    November 2015
    October 2015
    July 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    September 2013
    July 2013
    June 2013
    April 2013
    March 2013
    February 2013
    January 2013

    RSS Feed

     349 Fifth Avenue | Suite 733 | New York, NY 10016 | T: 646.553.1590
  Attorney Advertising | Legal Notices | Privacy Policy
Proudly powered by Weebly