Sep
3
Wednesday Export Law Grab Bag
Posted by Clif Burns at 8:52 pm on September 3, 2008
Category: Arms Export • Criminal Penalties • Cuba Sanctions • Iran Sanctions
We’re back from vacation and we’re back with a grab bag of things:
- University of Tennessee Professor J. Reece Roth was convicted on eighteen counts, including violations of the Arms Export Control Act for permitting foreign graduate students to have access to information relating to an Air Force project on the use of plasma technologies for unmanned aerial vehicles. According to the report on the Knoxville News Sentinel‘s website, a key piece of evidence proving that Roth had knowledge that his conduct was illegal was a set of notes that divided the work between an American graduate student and the Chinese graduate student in order to keep export-controlled technical data away from the graduate student. When this arrangement impeded progress on the project, the students were allowed to share data. Roth claimed that he didn’t believe the information was export-controlled until the project netted an actual military product, a claim that would appear inconsistent with his initial division of work on the project between the American and the Chinese graduate student.
- The Denver Business Journal supplies more information on the Platte River Associates prosecution for allegedly violating the Cuba embargo. The attorney for Platte River told the Denver Business Journal that the prosecution arises from training that the company gave to an employee of a Spanish company, Repsol, that had previously purchased geological modeling software used for oil exploration. The employee arrived with seismic data that appeared to relate to the western Caribbean and possibly to Cuba. There is apparently no allegation that Platte River dealt with any Cubans or the Cuban Government, nor any allegation that Repsol actually used the software in connection with a Cuban project. Instead, it now appears that the government’s case is based not on the sale of the software but the training of the Repsol employee. It’s still a tenuous connection without proof that Repsol used the software in connection with dealings with the Cuban government.
- Someone has made a broad-ranging Freedom of Information Act request at the Office of Foreign Assets Control (“OFAC”), apparently seeking copies of all applications for licenses to export agricultural and medical products to Iran. This has prompted OFAC to send letters to licensees requiring the licensees to assert in writing any claims that information in these licenses is proprietary or confidential to the licensee. Does anyone have any information on who may be seeking this information and why? Please let me know in the comments section.
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8 Comments:
The original FOIA request to OFAC was made by the Associated Press in 2005. Information on Sudan licenses issued by OFAC has also been requested. See the 25th paragraph of the following article on exports to Iran that was published by the AP on July 8th: http://www.wsbt.com/news/consumer/24082589.html.
Obviously, this request is of great concern to exporters that have submitted license applications to OFAC (most of which are for humanitarian products authorized by TSRA). As you know, applications submitted to OFAC for specific licenses contain a great deal of business proprietary information and is typically not released by OFAC under FOIA.
Received one for Iran as well. Strange…
The Iranian Basketball player signed a contract with the Memphis a week or so ago. I wish I could get a government agency to approve a license that fast.
Hello Clif,
My client received a letter from OFAC on this and I called OFAC to follow up. I was told that the FOIA requests (there are five) for Ag/Med licenses were submitted by the Associated Press, the Jewish World Watch, the National Foreign Trade Council, the Eren Law Firm (here in DC), and a private individual [who has now decided to withdraw his FOIA request]. OFAC sent out over 1,000 letters on this.
And thanks for your excellent work on this blog. Funny, I’m at Goodwin Procter, so we’re in the same building; perhaps we’ll have lunch sometime to meet and compare stories on export controls.
Regards,
Rich
Given that both BIS and DDTC (by reference to the EAA in 2778)depend upon 12(c) of the expired EAA to escape FOIA, I find it mighty interesting that OFAC is going through the hoops to find another exception to avoid giving up documents that any other agency would have to provide. actually read IEEPA and discovered that there is no FOIA exemption?
I find this to be especially entertaining given that in both Times-Mirror and Wisconsin Project the 11th and the DC Circuits, respectively, held that IEEPA somehow kept 12(c) alive, or at least on life-support, despite the expiration of the EAA pursuant to the clear, unambiguous sun-set language of Sec. 19 of the EAA. Of course, Wisconsin Project was based on grandfather language in the temporary resuscitation of the EAA IN 2001 and covered only FOIA requests submitted prior to the passage of the temporary extention. Plus, neither plaintiff challenged the “continuation” of the EAA/EAR during the “lapse” of the EAA. Of course, neither Times-Mirror nor the Wisconsin Project (Gary Milhollin’s critter, who never met an export control he didn’t like) were exporters and neither of them had any cause to challenge the continuation of the EAA/EAR in defiance of clear statutory language. Yet this Dept. of Justice cites both cases as broad authority for the unseemly proposition that the expiration of a statute by its express and unambiguous terms is an “emergency” arising outside the United States that can be invoked by IEEPA despite the statutory language, all based on a snatchet of the House Report that is contradicted by the statement of the subcommittee chairman and floor manager during the mark-up session. Entertaining indeed.
I’ve got some FOIA requests I’ve been meaning to submit. Might be a treat to see how the 6th Circuit would regard a FOIA request in which the requester didn’t take a dive on the question of the validity of the “continuation” of a statute by executive order.
Roth was not convicted on 18 counts. He was only convicted on conspiracy to violate the Arms Export Control Act together with fifteen separate illegal exports of military technical information. Roth was also convicted of one count of wire fraud relating to defrauding the University of Tennessee of the honest services by illegally exporting sensitive military information relating to this U.S. Air Force contract. Therefore, equaling only 17 convictions, the Knoxnews article erred.
Mike, OFAC was put through the FOIA ringer a while back in the case in which they ultimately agreed to disclose some civil penalty information, which may explain why they don’t rely on 12(c). I also think that (b)(4) is an appropriately available exemption for some or all of an AgMed license application. Certainly, the list of customers for the item can be considered to be legitimately confidential business information.
What penalty expected for Roth’s conviction?
Rich Kuslan, Editor
Asiabizblog
http://www.asiabizblog.com
