Three American companies have been sanctioned for sending defense plans to China. They are accused of transferring files of technical drawings and blueprints used to 3D print satellites, rocket technology and other defense-related prototypes just so they can save costs. These unauthorized exports have resulted in a penalty known as a temporary denial order (TDO), which is described as one of the most severe civil penalties applicable.
On June 7, 2022, the US Department of Commerceit is Bureau of Industry and Security (BIS) announced the enforcement charges against the U.S.-based companies, Quicksilver Crafting, Quick Cutand US Prototype, to suspend all export privileges for 180 days, which may be renewed.
The decision comes after the United States identified that the three companies were collectively using the same rental mailbox in Wilmington, North Carolina, to receive export-controlled designs from their domestic customers to 3D print designs. aerospace and space parts. However, without the consent or knowledge of their customers, these designs were sent to manufacturers in China to 3D print the items without the required permission from the US government. Once the components were printed, they were shipped back to the United States and to the prime customers.
According to the 11 pages of the BIS TDO Documentan investigation by the Commerce Department’s Office of Export Enforcement (OEE), found that the first suspicious activity alerts were reported in February 2020, when a U.S. global aerospace and defense technology company alerted an export control violation by a third-party vendor involving the unauthorized export of controlled satellite technology to China.
The OEE revealed that around July 2017, satellite parts were ordered from Quicksilver in Wilmington. As part of the transaction, Quicksilver received approximately a dozen engineering drawings and 3D CAD files to fabricate the specified components, which the customer would then use in a prototype satellite.
Even though Quicksilver advertises its 3D printing services on its website, the company ordered the parts from a Chinese company. The shipping label and pro forma invoice provided with the parts shipment identified Quicksilver as having an address in China and stated that the products were shipped from that country, even though no export license had been requested. or obtained for the transaction.
A similar breach was discovered in 2021 at Rapid Cut – which is linked to Quicksilver by location, ownership and operating personnel – also involving controlled technology exported to China without the required BIS export license. Except for this time, these were purpose-built parts for the ground support and test equipment of a rocket platform. The OEE’s inspection of the three companies’ questionable behavior provided evidence that there was a “clear disregard for export controls” that extended beyond just items subject to OEE regulations. Export Administration (EAR), but also encompassed the unlicensed export of defense articles to China, designated in the International Traffic in Arms Regulations (ITAR) and listed on the US Munitions List, to China.
Commerce Secretary Gina Raimondo said in a recent statement that the new TDOs are the “first enforcement actions taken by the Department of Commerce’s Bureau of Industry and Security in the context of export controls imposed by the United States”.
Commenting in this particular case, U.S. Under Secretary of Commerce for Export Enforcement Matthew S. Axelrod added that “outsourcing 3D printing of space and defense prototypes to China harms security.” national of the United States. By sending their customers’ technical drawings and blueprints to China, these companies may have saved a few dollars, but they did so at the collective expense of protecting US military technology.
Due to its sensitivity and importance to U.S. national security, information shared by the three companies is subject to strict export controls. This is why the TDO signed by Axelrod denies export privileges from Quicksilver, Rapid Cut, and US Prototype to prevent any imminent EAR violations and also encourages former customers of the three 3D printing service bureaus to review their records to determine whether intellectual property or export-controlled technology has been provided or potentially compromised.
One of the most striking findings is that the three societies are strongly interconnected. Not only do they use the same mailbox address, but the president of US Prototype has been a senior process specialist at Rapid Cut since 2010, while his wife is also listed as vice president of US Prototype. Additionally, Quicksilver and Rapid Cut have duplicate websites; the only difference between them is the name at the top of the site (see comparison below). Considering the irregularities in the companies and the TDO issued for the illegal export of technology to China, we will follow all future BIS decisions regarding the companies.
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