December 16, 2003 3:58 PM PST

Sun settles export violation charges

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Sun Microsystems has agreed to pay $291,000 in fines to settle U.S. Commerce Department charges that the server maker violated rules in exporting equipment to China and Egypt.

Several of the 24 charges stemmed from exporting without a license a 14-processor E5000 server to a Chinese military customer, the Changsha Institute of Science and Technology, the Commerce Department said in letters to Sun and in a statement Monday.

Other charges included exporting a server to a military customer in Egypt without a license; failing to send the government copies of shipping information; altering a document after the Commerce Department issued a subpoena; and exporting computer upgrades to Colombia and Venezuela but not being able to verify the ultimate recipients.

Sun agreed to the settlement "without admitting or denying the allegations," the Santa Clara, Calif.-based company said in a statement. In addition, Sun said it has strengthened its monitoring of exports to ensure full compliance with laws.

Sun disclosed the export violation charges in September 2002 and said in May 2003 it was in settlement negotiations.

Sun headquarters is paying $269,000, while two Hong Kong subsidiaries--Sun Microsystems China and Sun Microsystems California--each paid $11,000. In addition, Sun had its export privileges revoked for a year, but under the settlement terms the revocation is suspended.

In addition, Automated Systems--another Hong Kong company that the Commerce Department said was involved in the export to the Changsha Institute of Science and Technology--will pay a $22,000 fine as part of a settlement, the department said.


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