Intersil Corp. of Milpitas, Calif., has agreed to pay a $6 million civil penalty for violating export control laws and spend up to $4 million to institute stronger internal compliance procedures, the U.S. State Department said Thursday.
The company allegedly misclassified thousands of radiation-hardened and tolerant integrated circuits, which are defense articles controlled on the U.S. Munitions List, as goods subject to the jurisdiction of the Department of Commerce and regulated by the Export Administration regulations. Certain commodities were exported, re-exported or transferred to entities on the Department's Directorate of Defense Trade Controls' Watch List. Some of these entities were known front companies for or diversion points to countries that are banned from buying U.S. defense-related goods.
The State Department said Intersil was unaware it was improperly classifying its products
for space applications until a foreign customer raised concerns the integrated circuits may be controlled under the Munitions List.
Intersil will also hire a dedicated compliance official to oversee implementation of the agreement with the State Department, conduct two audits of its compliance program, and improve training for its employees.
The State Department said it did not debar Intersil from export of defense articles because it self-disclosed the violations in 2011 and cooperated with the government to take remedial measures.