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Circuit maker pays $10 million to settle U.S. export control charges

By Andrea Shalal

WASHINGTON (Reuters) - California-based Intersil Corp has agreed to pay a civil penalty of $10 million to settle 339 alleged violations of U.S. export control laws that potentially harmed U.S. national security, the State Department said on Wednesday.

The department said an extensive compliance review showed that many of the alleged violations occurred because Intersil did not properly control its radiation hardened and tolerant circuits, which were on the U.S. munitions list.

The company acknowledged the settlement in a filing with the U.S. Securities and Exchange Commission.

Certain circuit components used on satellites were exported, re-exported or retransferred to entities on the government's watch list, including some that were "known front companies" for customers in countries such as China that are banned from getting U.S. weapons exports, it said.

State Department officials said the company improperly classified the components as regulated under the Department of Commerce, when in fact they were subject to the State Department's export controls.

They said the misclassified circuits were sent to distributors in Belgium, France, Germany, Hong Kong, Japan, Italy, the Netherlands, Russia, Singapore, Sweden, Spain and Britain, with some parts later re-exported to other countries, including China.

The State Department said it agreed to suspend $4 million of the penalty if the company spends the money on remedial compliance measures and other compliance costs.

It said the company also agreed to set up a special internal compliance position to oversee the consent agreement, conduct two audits, and provide additional training for employees.

It said the company disclosed the alleged export control and arms control violations, acknowledged their serious nature, and implemented extensive remedial measures.

As a result, it said it decided against barring the company from additional export business.

(Reporting by Andrea Shalal; Editing by Lisa Shumaker)

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