Canadian Manufacturing

Alberta firm pleads guilty to exporting prohibited goods to Iran

Lee Specialties Ltd. blamed address mixup; fined $90,000 for sending Viton O-rings

CALGARY—Putting the wrong address on a $15 shipment of synthetic rubber rings has cost an Alberta company $90,000 for violating legislation which prohibits sending certain products to Iran.

Lee Specialties Ltd. of Red Deer, Alta., pleaded guilty to one count of violating the Special Economic Measures Act after charges were announced by the RCMP.

The court withdrew two other charges under the Customs Act and the United Nations Act.

Police say an investigation began in January 2012 after the Canada Border Services Agency (CBSA) intercepted Viton O-rings from a cargo shipment at Calgary International Airport that was destined for Iran.

Viton is a brand of synthetic rubber that can be used in the oilfields, but also in nuclear programs.

Viton O-rings and gaskets are specifically mentioned in the Special Economic Measures Act as a prohibited item.

They cannot legally be shipped or sold to any person or company in Iran.

A lawyer for the company said the rings were supposed to go to Dubai, but there was an address mix-up on the packaging.

“That’s absolutely in our view what happened here. You have an accounting system that allows multiple addresses to go in,” said lawyer Kristine Robidoux. “They have the same company name but two different addresses … one in Tehran and one in Dubai and so when it should have gone to Dubai, it went to Tehran.”

Lee Specialties has operations in Red Deer where it designs and manufactures specialized oilfield equipment including pressure control equipment and production logging tools.

The judge accepted a joint submission from the prosecution and defence and fined Lee Specialties $90,000.

Robidoux said her client accepted responsibility for its mistake.

“They take their reputation very seriously and of course when an event like this happens in large part due to human error … that really hurts and so certainly they’ve taken this very seriously,” she said.

“Their compliance program now is second to none.”

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