Thermon Manufacturing, based in San Marcos, Texas, agreed to pay $14,613.24 (and not one penny more or less) in civil penalties to the Office of Foreign Assets Control (“OFAC”) in connection with three exports by the company to Sudan in 2004 and 2005. The exports involved were heat-tracing equipment manufactured by the company. Heat-tracing equipment consist of systems used to maintain stable temperatures in pipes and pipelines and generally involve the use of steam, heated fluids or electrically-heated cables along the length of the piping.

Thermon voluntarily disclosed the matter to OFAC. Probably a significant factor in the relatively low fine was, as OFAC put it in its announcement of the settlement agreement, that

Thermon also reported to OFAC corrective measures and improvements to its OFAC compliance procedures it had taken in response to its discovery of the alleged violations.

More interesting than the Thermon settlement, which was announced in OFAC’s monthly reports of civil penalties, was that this was the only settlement reported by OFAC this month. Not one Internet purchaser of Cuban cigars was collared by the agency in August. Perhaps all the cigar chasers at OFAC were on vacation. Or perhaps someone finally did a cost-benefit analysis of the agency’s war on Cuban cigars.

Last week the Bureau of Industry and Security (“BIS”) proposed changes in the Commerce Control List to impose new export controls on devices designed for human execution, certain restraint devices, law enforcement striking devices, and certain torture devices that weren’t previously controlled. Although these new controls are laudably motivated by human rights concerns, they seem to be oblivious to the notion that the devices subject to these new controls are readily available abroad and that these controls will not have any impact on humans rights abuses by rogue states intent on doing bad things to their citizens or others who fall into their hands. Instead, the only real effect will be to impose additional regulatory burdens, in some cases, on U.S. exporters who are trying to determine whether items are now covered by the new and amended export controls.

One of the more perplexing, and arguably only symbolic, new ECCNs would cover equipment designed for the execution of human beings. Presumably this covers equipment which is only used to execute human beings, so shipments of swords to the Saudis, who regularly use them as execution devices, is still a-okay. Exporting stones to Afghanistan and Pakistan wouldn’t be a problem, although I suspect that each country has an ample supply of stones and little need to import them. No problems with ropes, either, unless, of course, the noose is pretied.

But this raises another question. Is anyone in the United States making (and exporting) electric chairs, guillotines, gas chambers, lethal injection machines and gallows? I have to say I’d be somewhat surprised if that were the case and I suspect that countries that still use execution devices of this sort build the devices themselves with locally-available parts.

Finally, the proposed execution device ECCN includes a little slap in the face of our friends to the north, noting that a license is required for execution devices to all countries “including Canada.” Canada last executed a criminal in 1962, outlawed capital punishment in 1976, and refuses extradition unless the extraditing country provides assurances that the defendant will not be subject to the death penalty.

ECCN 0A978 which currently requires a license to export saps would be expanded to law enforcement striking devices. (No jokes, please, about exports of saps in the more commonly-understood sense). The list of illustrative devices also would be increased from saps to such exotica as tonfas,

sjamboks,

and whips.

Unless a whip is a tool of the trade under the BAG exception, Indiana Jones is so screwed.

Houston-based FMC Technologies recently agreed to pay $610,000 to settle charges that it had exported butterfly valves on 78 occasions without required export licenses from the Bureau of Industry and Security (“BIS”). This ouch-sized fine, which followed a voluntary disclosure by FMC, is almost twice the $304,141 value of the exported valves. BIS, perhaps hoping not to scare other people thinking about voluntary disclosures, didn’t actually provide the total value of the exports in its schedule of exports but, of course, Export Law Blog whipped out its calculator to total up the value of the individual shipments as a unique service to its readers.

I would hazard that pipe and valve exports cause more problems for exporters than almost any other item. This is, I think, because it doesn’t occur to most people that a valve or pipe could be export-controlled. Supercomputers, yes; pipes, er, not so much.

But pipes and valves are indeed controlled by ECCN 2B350, depending on the composition of the surfaces that come in contact with the fluids or gases flowing through the pipe or valve. The two most common surfaces that cause a pipe or valve to become controlled are, first, alloys (usually stainless steel) with more than 25% nickel and 20% chromium and, second,Teflon or other fluoropolymers. FMC’s catalog of its butterfly valves indicates that Teflon was one of the optional materials for the O-ring and the valve disk. (Stainless steel 351 was also available but its nickel and chromium percentages, 14% and 18% respectively, fall below the parameters for ECCN 2B350.)

Needless to say, the value of these particular controls is somewhat dubious. Teflon-coated valves are widely available from pipe and valve manufacturers throughout the world. A quick Google search shows a number of sources of supply for teflon-coated valves and pipes. Like this company in Singapore or this one in China. The newly-announced top-to-bottom review of export controls would do well to start with review of these pipe and valve controls.
304141

ABOVE: CSM 7806 Mobile Telephone
Interception Device

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Manhattan defense attorney Robert Simels is on trial in connection with alleged criminal actions taken by him in the course his defense of Guyanese drug lord Roger Khan. These charges included alleged witness tampering and alleged possession of illegal eavesdropping equipment. Simels has claimed that the eavesdropping equipment came from Guyana and was owned by his client Roger Khan. This claim has the Guyanese government fussing and fuming like a convention of preachers caught caught in a go-go joint, with the Guyanese police even going so far as to trot out and display interception equipment that the government claims it seized from Khan.

Why doth the Guyanese government protest so much? Well it appears that the equipment — a laptop computer and a CSM 7806 (pictured on the right) came from a Fort Lauderdale store called the Spy Shop and were exported to Guyana. Export geeks will immediately realize that such equipment is classified as ECCN 5A980. Under the licensing policy set forth for these devices in section 742.13 of the Export Administration Regulations licenses to someone other than a telecom company are subject to a general policy of denial. Although section 742.13 doesn’t say this, one has to assume that an export to a foreign government (other than an AT country) or its law enforcement agencies would also be approved notwithstanding a general policy of denial.

If the cellphone eavesdropping device was legally exported and wound up in Khan’s hands, it means he got it from either one of Guyana’s (now-privatized) telecom companies or, more likely, from the Guyanese government. If from the Guyanese government, that means the government had connections to Khan’s cocaine business. That would, of course, be bad. Very bad. And that might explain why the Guyanese are claiming that they don’t know where Simel’s CSM 7806 came from, but that it didn’t come from them because they not only didn’t give the device to Khan but also they seized the stuff from him when they found him with it.

So who do you believe? Oh, and just to help you make your decision, the head of the company that owns the Spy Shop that sold the equipment testified in the Simel trial that the equipment was sold to the Government of Guyana.