Archive for the ‘DDTC’ Category


Jun

26

Best. Office. Name. Ever. Really.


Posted by at 9:40 pm on June 26, 2012
Category: Criminal PenaltiesDDTC

F-16Two criminal informations (which you can find here and here) have been filed in the United States District Court for the Southern District of Florida charging Alberto Pichardo, an officer of the Venezuelan Air Force, and others with violation of the Arms Export Control Act in connection with alleged unlicensed exports of F-16 parts and other military aircraft parts from the United States to the Venezuelan Air Force.

Judging from a news report on the charges as well as the two dockets, it appears that Pichardo has decamped the United States prior to the charges. There is no indication in the docket that an arrest has been made. It is probably safe to assume that Pichardo is not coming back to the United States voluntarily in the future at this point and that an extradition request with the Venezuelan courts will not be favorably received. The charging documents also name Freddy Arguelles, a former pilot of the Venezuelan Air Force (also no longer in Florida), as well as Victor Brown, a Hialeah Gardens aircraft parts trader, as co-defendants. Kirk Drellich of SkyHigh Accessories, Inc., located in Davie, Florida, was named as a co-conspirator but not charged in the documents that have been filed so far. (SkyHigh advertises on its website that it is “fully export compliant.”)

But the most interesting detail in the charging papers, and the reason for the post title, is this: Pichardo “was responsible for the oversight and control of the Venezuelan Military Acquisitions Office in Doral, Florida.” That’s right. In 2009 and 2010, the time period of the exports in question, there was a “Venezuelan Military Acquisitions Office” openly operating in Doral, Florida. The U.S. arms embargo against Venezuela had been in place since August 2006.

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Copyright © 2012 Clif Burns. All Rights Reserved.
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Jun

14

Proposed USML Category X Reforms Praised by Jason Voorhees


Posted by at 6:28 pm on June 14, 2012
Category: BISDDTCExport Reform

MacheteThe Bureau of Industry and Security (“BIS”) and the Directorate of Defense Trade Controls (“DDTC”) have announced proposed reforms to Category X of the United States Munitions List (“USML”). Category X covers protective personnel equipment and shelters.

For those wondering about the title of the post, one aspect of the reforms has nothing to do with Category X. The proposed rules published by BIS indicate that machetes, favorite of many rebel forces and villains in teen slasher flicks, are to be classified as EAR99. Machetes are currently controlled under ECCN 0A988 and require licenses for exports to Iraq, North Korea and Rwanda. One of the advantages of taking machetes off of the Commerce Control List is that it would eliminate the need to figure out the difference between what is considered a machete controlled by the rule as opposed to a really big knife which, presumably, is not.

The thrust of the proposed reforms deals with hard and soft body armor. Currently body armor is controlled based on the level of protection as measured by the NIJ Standard, with types IIIA and below subject to BIS control under ECCN 1A005 and everything above that (Types III and IV) are on the USML in Category X. (A frequent source of confusion is the NIJ standard for Type IIIA is, somewhat counter-intuitively, below, and provides less protection than, Type III). Current controls do not depend upon whether the body armor was specifically designed for military use or not.

Under the proposed rules, soft armor that meets Type III standards or that is “manufactured to military standards” would be moved to the new ECCN 1A613. Hard armor plates meeting Type III standards would also be moved to the new ECCN 1A613. All Type IV armor would remain in Category X of the USML. The new ECCN 1A613 would be subject to NS Column 1 controls which are stricter than the NS Column 2 controls applicable to the body armor covered by ECCN 1A005. Items controlled under NS Column 1 require a license to all destinations other than Canada. The proposed rule would mitigate this restriction somewhat by making items controlled by ECCN 1A613 eligible for license exception STA which permits unlicensed exports, if certain other conditions are met, to a number of countries including most of Europe.

Probably the most significant of the proposed changes is that body armor, other than Type IV armor still on the USML, may now be exported under license exceptions TMP and BAG. This means that body armor may be exported, in checked luggage or separately, for personal use without the requirement for a license. There has been considerable public criticism of the current regime which makes it difficult, if not impossible, for U.S. employees travelling to dangerous destinations to carry protective gear with them.

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Copyright © 2012 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Apr

30

Danger, Danger, Will Robinson! Deemed Exports Ahead!!


Posted by at 6:51 pm on April 30, 2012
Category: BISDDTCDeemed Exports

Medical LabA long article published today on the Bloomberg News website tells the story of a voluntary disclosure by Georgia Tech after one of its instructors inadvertently posted some export-controlled data on the Internet. The article follows this anecdote up with a ton of (virtual) ink about how universities are giving away all of our military secrets and how we shouldn’t be surprised when this results in the U.S. becoming a satellite province of China or Iran.

First, here’s what the story reveals about the Georgia Tech voluntary disclosure. According to the story, a research scientist at the university wanted to put course materials and videos of his lectures for his course “Infrared Technology and Applications” on a DVD because he was planning to retire and he wanted to use these materials to train his successor. When the university’s media staff encountered problems putting the video and materials on DVD, they suggested making the information available by a link. The research scientist approved this idea, thinking that it was an internal link, whereas it was an ordinary Internet link. The material was available online for about three weeks before the mistake was discovered and the materials were taken down. Although the video received hits only from the United States, some of the Powerpoint slides that were posted received hits from foreign countries, including 33 from China and one from Iran. The university disclosed this lapse to the Directorate of Defense Trade Controls which issued a warning letter but imposed no penalties, something which appears to have scandalized the Bloomberg reporter.

Above and beyond the description of the Georgia Tech voluntary disclosure, the article takes a Chicken Little approach to the dangers posed to national security by university research:

Eager to preserve their culture of openness and global collaboration, campuses are skirting — and even flouting — export-control laws that require foreigners to hold government licenses to work on sensitive projects.

To support this startlingly broad conclusion, the reporter humps the Roth case for all it is worth and cites some voluntary disclosures by several universities. That doesn’t much sound like “flouting” export rules to me, but perhaps Bloomberg has a different definition of that word.

For those familiar with the sorts of information which may be export-controlled (but not classified), it is hard to get too worked up about the national security implications of this. After all, business proprietary information about how to make handcuffs is controlled under the Commerce Department’s rules. Suffice it to say, things that are of real concern are classified. Accordingly, I am not scandalized when voluntary disclosures by universities relating to deemed exports result in warning letters rather than jail time for everyone involved as the reporter seems to think is appropriate. And because “fundamental research,” which is exempted from export controls, is an incredibly vague term that is difficult to apply in many contexts, overzealous enforcement of export rules to university research would have an unwarranted chilling effect on that research given the number of foreign students at almost every college and university. Well, I suppose colleges could adopt an American-only admissions policy, and I wouldn’t be surprised if there weren’t certain advocates of deemed export controls who secretly wish for such national homogeneity at our institutions of higher learning.

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Copyright © 2012 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Apr

4

Seized Weapons “Contraband” Despite Arms Export Act Charges Dismissal


Posted by at 6:56 pm on April 4, 2012
Category: Arms ExportDDTC

Customs Destroys Seized MerchandiseA memorandum opinion of the Ninth Circuit, filed on March 30, 2012, reaches a somewhat paradoxical conclusion. It held that a party that had been indicted for violations of the Arms Export Control Act had no right, even though the indictment was dismissed, for compensation resulting from the destruction of the seized merchandise by U.S. Customs. The merchandise in question consisted of weapons parts imported from Vietnam in violation of the U.S. arms embargo against Vietnam. The opinion pointed out that the goods were still contraband because the claimant did not have a license from ATF required for permanent imports or a license from the Department of State required for temporary imports.

Of course, the back story — why were the indictments dismissed for the illegal arms import? — is the most interesting part of this story and can be found in the district court opinion dismissing the arms charges. The charges in question were dismissed because the court found that the defendant (and claimant) had been denied his Sixth Amendment right to a speedy trial. That happened because — get this — U.S. Customs destroyed the central evidence in the case, the seized weapons parts, because it was costing too much to store them. Repeated calls by Customs to the AUSA prosecuting the case weren’t returned and so Customs simply torched the goods. The prosecution was somewhat loathe to reveal this blunder to the defense and so it kept dawdling on complying with the defendant’s discovery request. Interestingly, the district court held that the destruction of the evidence, although that constituted “gross negligence” by the government, did not violate the defendant’s rights under the Due Process Clause because the evidence was not exculpatory.

My favorite part of the district court decision is this little nugget explaining how the evidence wound up being destroyed:

SA Bench followed SA King’s suggestion and made several telephone calls to AUSA Schaeffer at the San Francisco United States Attorney’s Office, leaving voicemail messages, asking for return calls, and stating that unless he (Schaefer) authorized continued retention of the evidence, [Customs] would destroy it. At SA Bench’s request, his Group Supervisor Jerry Barnett also called one or two times and left the same voicemail messages for AUSA Schaefer. … AUSA Schaefer testified that he never received the voicemail messages, that he always returned his telephone calls and that he had no information that the weapons parts were in jeopardy of being destroyed. Numerous present and former government employees, however, testified that Schaefer had an extremely poor reputation for returning phone calls. SA Bench did not receive any return call from AUSA Schaefer and Bench advised Ms. Mower in July of 1999 that the evidence could be destroyed, which occurred on September 28, 1999. …

AUSA Schaefer had a reputation among law enforcement agents, defense attorneys and members of the United States Attorney’s Office in San Francisco, for extreme dereliction regarding returning telephone calls. SA Stoltz testified that when he wanted to contact Schaefer, it would typically require 50-60 calls and voicemail messages

[Record citations omitted.]

The amazing thing here is that someone would actually leave 50-60 messages in such a situation. I think that’s often referred to as the triumph of hope over experience.

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Copyright © 2012 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Mar

14

Export Reform on a Slow Boat to China


Posted by at 6:52 pm on March 14, 2012
Category: Arms ExportChinaDDTCExport Reform

Gregory Schulte
ABOVE: Gregory Schulte

The House Armed Services Committee last week held a hearing on whether the Thales sale of an ITAR-free satellite to the Chinese had, in fact, leaked U.S. space technology to the Chinese. During that hearing, Gregory L. Schulte, deputy assistant defense secretary for space policy, tried to allay concerns by the Committee that export reform would be a boon to the Chinese.

And we are not proposing removing the Tiananmen Square sanctions that would remain in place even with export-control reform, meaning that items still on the Munitions List could not be exported to China. And, also meaning, that we would not allow the launch of satellites from Chinese launch vehicles.

He went on to say that although some space items would, as part of export reform, be moved to the less restrictive Commerce Control List, those would only be “space items that are already widely available.” Even then, according to Schulte, such space items that were moved to the CCL would still be subject to strict controls with respect to licensing exports to China.

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Copyright © 2012 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)