WASHINGTON – On March 5, 2021, Jeremy Pelter, performing the non-exclusive functions and duties of
the Under Secretary for Industry and Security (BIS) of the U.S. Department of Commerce, issued a final
order imposing a 15-year denial order against Alexander Brazhnikov, Jr. This penalty was recommended
by U.S. Coast Guard Administrative Law Judge Michael J. Devine based on a BIS and FBI investigation
into unlicensed exports of electronic components from the United States to Russia, including parties on
BIS’s Entity List.

“Today’s administrative action following a criminal conviction demonstrates Export Enforcement’s
commitment to combating violations of export laws and regulations with all of our enforcement tools,
especially when it comes to exports to entities involved in weapons of mass destruction activities,” said
Kevin J. Kurland, performing the non-exclusive functions and duties of the Assistant Secretary for Export
Enforcement at the Department of Commerce.

The BIS order resolved allegations that Brazhnikov participated in an elaborate multi-year conspiracy to
procure electronic components from U.S. manufacturers and distributors for export to Russia without
the required export licenses. The unlicensed exports include shipments to listed entities such as the All-Russian Scientific Research Institute of Technical Physics (“VNIITF”), an entity whose public website
states that it is one of the two world-class nuclear weapons centers operating in Russia.

Brazhnikov and his co-conspirators sought to disguise their illegal conduct by establishing a number of
foreign bank accounts in third countries in the names of front companies to conceal the source of the
funds and the identities of the end users, and by systematically falsifying shipping documents to
understate the value of the items to evade the requirement of filing Electronic Export Information with
the U.S. Government. Brazhnikov went to further lengths to conceal the actual end users by repackaging and re-labeling the items and then having them shipped to various falsely-identified
recipients and false addresses in Russia, including vacant apartments and storefronts controlled by his
Russian co-conspirators.

In June 2015, Brazhnikov plead guilty in federal court to smuggling charges and to a charge of conspiring
to commit money laundering to hide the illegal proceeds of his criminal activities. On June 30, 2016,
Alexander Brazhnikov was sentenced in U.S. District Court for the District of New Jersey to 70 months in 
prison, a $75,000 criminal fine, a $65 million forfeiture, forfeiture of his two houses valued at
approximately $500,000 each, and a $300 special assessment.

"As this administrative enforcement action demonstrates, a major violator of our nation's export control
laws has been denied the privilege to export items subject to the EAR for fifteen years," said Jonathan
Carson, Special Agent in Charge of the New York Field Office. "The Office of Export Enforcement will use
all of our unique authorities to ensure that engaging in illegal export activity has significant and long
term consequences."

BIS’s mission is to advance U.S. national security and foreign policy objectives by ensuring an effective
export control and treaty compliance system and promoting continued U.S. strategic technology
leadership. Among its enforcement efforts, BIS is committed to preventing U.S.-origin items from
supporting Weapons of Mass Destruction (WMD) projects facilitating terrorist activities, or destabilizing
military modernization programs. For more information, please visit www.bis.doc.gov.