MOVIES

MOUNTAIN VIEW, Calif. -- SGI today announced that it has reached an agreement with the U.S. Department of Justice to settle the export licensing issues related to the sale of four deskside computers in 1996 to a Russian government laboratory. SGI has agreed to acknowledge two violations of export licensing requirements and pay a fine of $500,000 for each violation. SGI anticipates court approval of the resolution in early January. The 1996 export came at a time when the U.S. government, in the spirit of post-Cold War cooperation, was encouraging the technology industry to assist Russia's government laboratories in developing commercially beneficial scientific research. SGI's technology is well suited for scientific research and environmental remediation. This was the intended purpose confirmed at the time of the sale by the customer, which is located in one of the world's most polluted areas. However, because the export was made to a government-operated facility involved in both civil and non-civil activities in Russia, SGI has agreed in this settlement that it should have applied for an export license. The computers involved in the transaction were not used for military-related applications. "This resolution allows us to take responsibility for this matter and maintain focus on our business," said Sandra Escher, senior vice president and general counsel. "Since 1996, we have taken action to significantly enhance our export compliance programs. We are committed to effective compliance practices and vigorously adhering to all laws." As part of the settlement process the Department of Justice filed a complaint today in federal court in San Jose. The settlement agreement with the government is expected to be filed in due course and the settlement should receive final court approval in January.