Apr
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Prosecution’s Argument in Mak Trial Makes Exports of 757s to China Illegal
Posted by Clif Burns at 8:05 am on April 4, 2007
Category: General
We have criticized before the prosecution’s claim in the Chi Mak prosecution that the public domain exclusion doesn’t apply to exports of technical data to China. The prosecution bases its argument on language in section 126.1(a) of the ITAR that says that “exemptions” can’t be used for exports to embargoed countries. As we have noted, that language clearly refers to parts of the ITAR explicitly denominated as “exemptions” and not to the various definitional exclusions scattered through the ITAR, such as the exclusions of public domain information and basic research principles from the definition of technical data.
It recently occurred to us that one exclusion in particular shows the folly of the government’s position — the exclusion of quartz rate sensors from Category VIII(e). That category covers “inertial navigation systems.” A note to Category VIII(e) states that the category “does not include” quartz rate sensors if the sensor is “included as an integral part of a commercial standby instrument system” on commercial aircraft.
The background behind that rule is the infamous QRS-11 navigational chip that Boeing began to put in the navigational systems of commercial jetliners in 2000. In April 2006, Boeing agreed to pay a $15 million civil penalty for, among other violations set forth in the charging letter, exporting commercial jetliners equipped with that chip to embargoed countries, including China from 2000 until 2003.
Beginning in 2003, Boeing began to apply for license for exports of commercial aircraft equipped with the QRS-11. In September 2003, Boeing applied for a license to export such aircraft to China. It was clear to DDTC that the arms embargo wasn’t intended to prevent shipment of QRS-11 equipped planes to China. Accordingly, it sought and obtained Presidential waivers to permit shipment of such planes to China, notwithstanding the arms embargo. Additionally, DDTC ultimately amended the rules on January 7, 2004, to exclude QRS-11 equipped commercial airplanes from the USML. The clear intent of this provision was to remove such aircraft from the strictures of the arms embargo in section 126.1.
The argument by the prosecution in the Mak case is counter to the understanding of DDTC of its own rules. DDTC clearly intended to permit QRS-11 aircraft to be shipped to proscribed countries under section 126.1. If the prosecution’s argument were accepted, Boeing will be breaking the law by selling its commercial aircraft to China. The prosecution might actually believe that but DDTC, which makes the rules, doesn’t.
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Copyright © 2007 Clif Burns. All Rights Reserved.
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7 Comments:
You have to wonder whether the AUSAs working this case got review and clearance for their motion and brief from Main Justice, like th’re supposed to do, or just winged it on their own. If they did, then we have to presume that someone at State reviewed it, but if so that begs the question whether it was someone in the Legal Advisers office or someone actually in DDTC. All the more reason for DDTC to add its own chief counsel’s office to give it legal advice on not only the AECA, but administrative procedures and criminal law as well.
How is it that a leading blog publishes zilch on the Tyco Valves and the ITT Corp. case? The mystery befuddles me. Perhaps Mr. Deal has a conspiratorial retort.
Slinger — I am a lawyer and not a journalist. The purpose of this blog is to stimulate discussion of export law issues with, hopefully, stimulating commentary not found elsewhere. So, unlike the NYT or the WaPo, I don’t have the time or ability to cover every export story. Reasons for not covering a story include limited time on my part, my perception that what I have to say about a case is not interesting, availability of adequate coverage from other sources and, obviously, professional obligations to existing and former clients.
But I do thank you for calling this effort a “leading blog” 🙂
I have every faith in our learned Brother Burns discretion and good taste, and appreciate his yeoman-like efforts in maintaing this space. But now that you mention it Slinger, it wouldn’t surprise me to learn that ICE and DDTC were paying a Chinese hacker ring to delete portions they didn’t like.
Wow, to say that the leading blog has NOTHING to say on the ITT settlement is amazing for a “leading blog”!! I suspect that the truth lies in your statement regarding “professional obligations to existing and former clients.”
I would expect you to advise your readers when such seminal cases are openly “ignored” in your blog.
Mr. Burns:
I have to agree with Slinger’s comments. As an avid reader of your blog (I, too, also agree that it is a leading blog in the field), I was disappointed to find no discussion or commentary on both the Tyco settlement and the ITT case.
If you cannot or choose not to write about such cases because you have professional obligations to existing or former clients, it would be wise to so advise your readers.
You are so outspoken on the issues, that the silence was ultimately deafening on these two cases.
I look forward to your candor on such issues in the future and hope to see more if your excellent analysis and commentary.
[…] As we’ve reported before, the prosecution in the Mak trial tried to claim that the ITAR forbids export of public domain data on military items to China. The prosecution also argued that the State Department “certification” that the documents in question were “technical data” under the ITAR was a conclusive and unreviewable determination that they were not. We explained here, here and here, why these arguments were wrong. […]
