HOUSTON — PetroChina International America Inc. has entered into a non-prosecution agreement to pay a fine and monetary forfeiture totaling $14.5 million for violations of U.S. export law, announced Homeland Security Investigations (HSI) Houston Special Agent in Charge Mark Dawson, Special Agent in Charge Trey McClish of the Bureau of Industry and Security’s (BIS) Office of Export Enforcement in Dallas, which is part of the U.S. Department of Commerce, and U.S. Attorney for the Southern District of Texas Alamdar S. Hamdani.
PetroChina International America is a subsidiary of PetroChina International Co. Ltd., one of the largest oil and gas companies in the world. It was incorporated in New Jersey in 2003 and is principally located in Houston.
“PCIA misclassified or undervalued millions of dollars in petroleum exports using the U.S. electronic database that is trusted throughout the global marketplace for timely, accurate and reliable data and information,” said Dawson. “These actions helped facilitate illegal activity abroad and damaged America’s reputation as a leader in global trade. The entry of false or misleading information into export systems is a serious law violation. Working in conjunction with our domestic and international partners, we were able to uncover these violations of U.S. export law and levy a fine and forfeiture totaling $14.5 million to level the playing field for competitors and deter similar unlawful conduct in the future.”
PetroChina International America agreed to pay the fine and forfeiture after authorities discovered evidence that they had reported inaccurate information in the Automated Export System, an electronic database that exporters use to declare international exports from the United States. Specifically, the company misclassified more than $32 million of ultra-low-sulfur diesel fuel as mineral oil mix for certain export transactions to Mexico that took place in 2019 and 2020.
The investigation began in December 2019, after Mexican authorities discovered discrepancies between importation documents for a Panamanian oil tanker after it made entry in Port Veracruz, Mexico. Mexican authorities contacted U.S. trade officials for assistance in clarifying the discrepancies.
HSI Houston, in conjunction with its federal partners, conducted a historical analysis of export data PetroChina International America provided, which revealed additional exports that were misclassified and/or undervalued at the time of export, and then entered into the Automated Export System.
“Today’s forfeiture is a prime example of the U.S. government’s strong interagency partnerships working together to effectively target entities engaging in illicit activities abroad, especially those attempting to use the country’s own systems to facilitate that activity,” said McClish. “BIS will continue to identify and disrupt those who attempt to profit from and circumvent U.S. export controls and regulations.”
“From its bustling port to its proximity to Central and South America, Houston is a lucrative hub for international commerce,” said Hamdani. “The city’s continued growth depends on companies playing by the rules, in this case export and import regulations. The potentially false or misleading valuations PetroChina International America input into a government database gave it an unfair competitive advantage while also harming the integrity of global trade with nations like Mexico. The $14.5 million forfeiture and fine assessed against PCIA should send a message to all those companies still not playing by the rules — the Southern District of Texas will hold you to account.”
PetroChina International America has fully cooperated with the investigation into the export violations and has enhanced its compliance program. It has agreed to provide the U.S. attorney’s office with details of its efforts in a yearly report for the three-year term.
HSI, the BIS, and U.S. Customs and Border Protection conducted the investigation. Assistant U.S. Attorney Suzanne Elmilady is handling the matter with HSI’s embedded counsel.
HSI Houston and the U.S. attorney’s office actively encourage the submission of voluntary self-disclosures from parties who suspect they may have violated U.S export law. Voluntary self-disclosures serve as a strong indication of a party's commitment to complying with U.S. export law and regulatory controls. To prevent unfair trade and ensure a level playing field, HSI also encourages the reporting of suspected or known third-party violations of U.S. export law. To self-disclose a potential violation or report a suspected third-party violation, please contact HSI at petroleum.exports@hsi.dhs.gov.
For more news and information on HSI’s efforts to aggressively investigate trade fraud in Southeast Texas follow us on X, formerly known as Twitter, at @HSIHouston.
About HSI
HSI is the principal investigative arm of the Department of Homeland Security, responsible for investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel, and finance move. HSI’s workforce consists of over 10,000 employees, assigned to 235 offices within the United States, and 93 overseas locations in 56 countries. HSI's international presence represents the Department of Homeland Security’s largest investigative law enforcement presence abroad and one of the largest international footprints in U.S. law enforcement.