The US Department of Justice announced on Tuesday, June 25th, that PetroChina International America (PCIA), a subsidiary of China National Petroleum Corporation, has agreed to pay fines and forfeit funds totaling $14.5 million for violating US export regulations.
PCIA, registered in New Jersey in 2003, is primarily based in Houston. The Southern District of Texas US Attorney’s Office stated that there is evidence indicating PCIA provided false information in the Automated Export System (AES), an electronic database used by exporters to declare international exports to the US.
Prosecutors revealed that “in certain export transactions to Mexico in 2019 and 2020, PCIA misreported over $32 million worth of Ultra-Low Sulfur Diesel (ULSD) as mineral oil blends.”
US prosecutor Alamdar S. Hamdani stated, “Houston, being near Central and South America and possessing bustling ports, is a profitable international business hub. The city’s continued growth depends on companies adhering to regulations.”
“The potential erroneous or misleading valuations input by PCIA into government databases gave them an unfair competitive advantage, while also harming the global trade integrity with countries like Mexico,” Hamdani added.
He emphasized that the forfeiture and fines imposed on PCIA send a message to companies that do not abide by rules that the Texas prosecutors will hold them accountable.
Mark Dawson, the head of Homeland Security Investigations (HSI) in Houston, commented, “PCIA’s misclassification or undervaluing of millions of dollars in oil exports using US electronic databases perpetuates illicit activities overseas and damages the reputation of the US as a global trade leader. Inputting false or misleading information into the export system is a serious violation.”
Additionally, prosecutors noted that PCIA cooperated with the investigation into their violations and has strengthened its compliance program.
PCIA did not immediately respond to Reuters’ request for comments.