The Turbocharger Export Story

1990

A True Story

Written 12/2015, and rewritten 12/2019* 709 Words*

By Howard Yasgar

This story is about a very costly problem that happened to one of my unethical friends.

He was a fellow named Harry that had a large truck parts business in the Chicago area.

I won’t mention his full name as I don’t want to embarrass him.

At the time that I heard the story, [t was because my company was involved in military sales, and we were in my office discussing the dangers of exporting military parts overseas.

My Midwest friend told me that he recently had a major problem with our government regarding his exporting parts to the Mideast for a customer.

He said the problem had cost him over $385,000 and almost cost him his building as well as his entire company, but he said it was all just because of a simple misunderstanding.

For most of my career I have been in the wholesale parts business, and my company has always done a considerable amount of business with the U.S. government as well as our shipping to many foreign military customers overseas.

I know very well that to do this type of business there is a certain protocol you must adhere to.

You need to have a Department of State License, which is costly, and in most cases, you will need an end user certificate.

Both these things are extremely important, and the government monitors them closely.

The government monitors each end user certificate to see if the items being purchased are truly being used in the country they are being shipped to, or will they be diverted to a blacklisted country.

Besides that, as a military parts exporter you are expected to keep abreast of what countries are on our government’s blacklist, they are the countries that you cannot do business with.

Do companies cheat on these requirements? Yes, they do, they do it all the time, but when they are caught, they are fined and then prosecuted.

What complicates the export situation even more, is the extremely complicated way business is conducted in the United States.

We have manufacturers selling, we have wholesalers selling, we have distributors selling, we have dealers selling, and we have exporters selling, and in between all of them there are all types of agents, and all of them are looking to obtain overseas business.

All these various entities at some time must do business with one another, and there, must be a modicum of trust involved.

For example, if a dealer or agent is selling something overseas and he is shipping directly from the manufacturer, or distributor, he is expecting them to remain anonymous, he doesn’t want his customer to know who his sources are.

Most ethical suppliers know this and do remain anonymous.

On the other hand, the supplier is also assuming that his customer is not selling to a illegal blacklisted country, which could get him prosecuted by our government.

In the case of my friend in the Midwest, he was the distributor for a company making military turbochargers.

He received a large order from an exporter, and he was assured that the parts were going to a friendly country, France.

My Midwest friend, being a bit of an unethical character, loaded down the shipment with his catalogs, calendars, and business cards, he did this unethical thing all the time, he was hoping to steal the end user customers for himself.

Well guess what? The exporter had lied to him; the shipment did go to France but it was intercepted

While being transshipped to Iran, and everyone knows that Iran is a blacklisted country.

The shipment was confiscated.

My friend protested, but his catalogs, calendars and business cards were found in the shipment, he was obviously soliciting their business.

He was advised by the government to get an attorney.

I don’t think he does that unethical stuffing shipments with his catalogs and calendars anymore.