(Yicai Global) Dec. 10 -- Yantai Jereh Oilfield Services Group has resolved a dispute with US regulators who will remove export controls against the company in place since March 2016 after it paid fines and signed a recent settlement agreement.

The company inked the covenant with the US Office of Foreign Assets Control and has agreed to pay it a civil penalty of USD2.8 million. The agreement will take effect upon signing, the oilfield equipment developer and service provider headquartered in Shandong province in eastern China said in a statement yesterday.

Its shares [SHE:002353] rose 3.92 percent on the news to CNY18.04 (USD2.61)  

OFAC has consented to pardon the company and permanently waive all civil liability in the case (without any determination of fault) given the commitment Jereh Oilfield Services made in the agreement, the firm added.

Jereh Oilfield Services signed as required by the US Department of Commerce's Bureau of Industry and Security and has agreed to pay BIS a civil fine of USD600,000.

BIS will now remove the firm from the restricted export entity list, per the statement. 

The company has improved its organizational structure and implemented strict controls of institutions and processes to ensure that it complies with US export control rules and the settlement agreement to minimize the risk of future violations of either, it added.

BIS charged the firm and its affiliates with violating the rules from October 2014 to March 2016 and added them to the list of export control entities on March 21, 2016.

Jereh Oilfield Services' US suppliers have been required to apply for export licenses from US authorities according to US Export Administration Regulations when sending products to it since then, and this was limiting the company's import of equipment parts and accessories from the US for its production and sales.

Editor: Ben Armour