Oct
23
ITAR? What’s An ITAR? Is It Like an iPod?
Posted by Clif Burns at 1:33 pm on October 23, 2009
Category: DDTC • ITAR • Part 129
Psst. Have I got a deal for you. For only $65 million you can be the owner of a military landing hovercraft — complete with guns, compartments for three tanks, space for 170 troops and nuclear and CBW shelters. It can be yours in just 4-5 months and will ship from Eastern Europe. And it’s for sale on the website of Portland Yacht Sales, which bills itself on the site as engaged in “International Yacht and Ship Brokerage.”
To be clear, of course, I’m not really trying to promote the sale of this landing vehicle to any of my readers. In fact, you’ve probably guessed that my reason for bringing up this unusual web offer would be to wonder whether the State Department’s Directorate of Defense Trade Controls (“DDTC”) has thrown the book — or rather thrown Part 129 of the International Traffic in Arms Regulations (“ITAR”) — at Portland Yacht yet.
Part 129 requires that companies acting as brokers of defense articles — and this is pretty clearly a defense article under USML Category VI(a) — must register with DDTC, and I have a sneaking suspicion that Portland might not have done that. But there’s more. There is that pesky requirement that you have to obtain a license from DDTC before you can broker “significant military equipment” (“SME”) valued at more than $1 million. Category VI(a) naval vessels are clearly defined as SME and $65 million is more than a few dollars north of $1 million. And I’m guessing that Portland doesn’t have the brokerage license either.
I’m sure that Portland Yacht will say it never even heard of this ITAR-thingy and never dreamed in its wildest dreams that selling a $65 million dollar vessel with anti-aircraft artillery, nuclear shelters, and room for 3 tanks and 170 troops to foreign governments would be, er, subject to some silly regulations. I mean, really, it’s not that different from selling an SUV to the French Embassy, right?
[Hat tip to reader Garrett Steele for pointing this sale out to me.]
UPDATE: Portland Yacht took down the webpage offering the military hovercraft for sale. We took a pdf snapshot of the page before it disappeared, which you can see by clicking here.
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10 Comments:
Hey Clif,
If I buy this will your firm help me get it imported? That thing could really help with traffic here in Los Angeles.
All I ever get are off-color jokes. Where does Garrett get his material?
Wow… genius alert. Guess they will know about it now!
Hey, Portland Yacht Sales, if you’re reading this, you timing is perfect:
http://www.buyusa.gov/oregon/itar.html
See you there!
How funny is this… If you go to Portland Yacht’s home page, there’s a link called “International Export” which advises that “You can’t afford to deal with amateurs.” If I lived in Portland I would be parked near PYS’s office at 8am on Monday to count how many black SUVs show up.
Cliff
In the past, at least, a hovercraft was treated as an aircraft in the UK and you required a Pilot’s Licence rather than a Master’s Ticket to drive one over a certain size.
Would this affect the Classification?
Hamish
@Hamish: That wouldn’t affect the classification here. What’s relevant here is that it was modified for military use by adding, for example, guns, tank compartments, and nuclear and CBW shelters.
But what if it has been thoroughly demilitarized? The hulk of the ex-USS Bennington, CV-20, was exported to India for scrapping circa 1994-95 as “G-DEST” after sale as surplus by DoD’s DRMS. While “demilitarization” alone might not suffice for a US-origin vessel under DRMS contract terms now in effect, if the once military hovercraft has had all weapons and ITAR controlled navigation and communications systems removed, could it not be “substantially transformed” into a commercial ferry.
Cliff
But is the classification Category VI(a) or is it that of an aircraft (Cat VIII) or an Amphibious vehicle in Cat VII?
I have two thoughts:
1) If the Black SUVs have arrived, i hope that they have got their paperwork done correctly – it appears that there is plenty of room for an inappropriate search if the wording is not quite correct.
2) If you are legitimately trading in Hovercraft and their components then there are wide variations in the classification of engines etc. (SME etc).
Does anyone have experience of this?
Hamish
Word must have spread quickly, they pulled the boat from their web page!
I practice in the area of export control in Portland, OR…I’ll make sure to send them my card 😉
