Dell Reports Justice Department Investigation Of Syria Sales

Dell Reports Justice Department Investigation Of Syria Sales
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Dell Inc. (NASDAQ:DELL) reported that the U.S. Department of Justice has been investigating the sale of Dell computer equipment to Syria. The company mentioned the investigation in an SEC filing made earlier today.

The ongoing Justice Department investigation is related to a New York Times report in May of this year that Dell equipment had been sold to the Syrian government via a Dubai-based distributor in violation of U.S. trade sanctions prohibiting such exports. At that time Dell said it could not confirm that any illegal shipments had been made, but was investigating a tip from an anonymous source about a shipment to Syria.

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Dell statement in letter to SEC

Although Dell has not released further details on the case yet, a statement made in a July 2 letter to the SEC outlines their position. “Dell has been in regular communication with the Assistant U.S. Attorney handling the matter and is cooperating with the investigation.”

The letter continued, “Dell Inc. does not conduct any business directly in any country identified as a state sponsor of terrorism, including Syria, unless under authority of a license or license exception from the U.S. government and the governments of any other countries with jurisdiction. In addition, Dell does not authorize its resellers and distributors to make sales of Dell products to any end user in such countries and, in its reseller and distributor contracts, specifically notifies its authorized partners that the sale of any Dell products to or in restricted countries is prohibited by U.S. law.”

The letter also went on to mention that now privately-held Dell was conducting an internal investigation into the situation led by outside counsel.

U.S. law against exports to Syria

The legal violation under investigation in this case relates to a ban against the export of U.S.-manufactured goods to Syria. An executive order enacted in 2004 prohibits the export of goods comprising greater than 10 percent US-manufactured component parts to Syria.

Also see: Dell Inc. Go-Private Deal Gets Regulators’ Nod

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