Because most of Washington, DC, has emptied out in anticipation of the upcoming long weekend for the Fourth of July, the nefarious Captain Obvious took the opportunity to hack into the DDTC website and leave this important reminder to exporters:

Reminder: Individuals and companies transporting ITAR controlled goods are responsible for meeting the requirements of both the United States and the country/ies to which they will be transporting goods. The Department of State’s website on travel (www.travel.state.gov) and the country’s customs office should be consulted to ensure compliance.

The exclamation point in a warning triangle that the hacker put to the left of this important announcement was a particularly malicious touch.

This just goes to show that no one — even the Department of State and its various bureaus — is safe these days from the scourge of hacking. Even this blog had to fend off an attack earlier today from Captain Obvious who attempted, unsuccessfully, to put a reminder on our home page that all exporters, sooner or later, will have to breathe in order to continue exporting.

In case someone at DDTC catches this and removes the hacker’s handiwork, a screen grab of the hacked page can be found here.

On Sunday, the New York Times revealed that the UAE had hired Erik Prince, the founder of Blackwater, to provide certain training service in the Emirates. The Times described them this way:

The force is intended to conduct special operations missions inside and outside the country, defend oil pipelines and skyscrapers from terrorist attacks and put down internal revolts, the documents show. Such troops could be deployed if the Emirates faced unrest in their crowded labor camps or were challenged by pro-democracy protests like those sweeping the Arab world this year.

Of course, the first question that pops to mind to us export junkies is whether this is legal or not. Fortunately, the Times had the good sense to call my colleague at Bryan Cave, Susan Kovarovics, and ask her that question.

Susan Kovarovics, an international trade lawyer who advises companies about export controls, said that because Reflex Responses was an Emirati company it might not need State Department authorization for its activities.

But she said that any Americans working on the project might run legal risks if they did not get government approval to participate in training the foreign troops.

Susan’s answer is spot on, particularly inasmuch as she said U.S. persons “might” run legal risks. Although the case might, at first, seem an open and shut case where a license is required, it really isn’t, depending on the precise boundaries of the services provided by Mr. Prince’s company. The difficult issue is drawing the line between military and police activity, a line that may be difficult to draw in autocracies like the UAE where there is no clear distinction between the police and military forces and the roles they play.

The definition of defense services in section 120.6 of the International Traffic in Arms Regulations (“ITAR”) covers, among other things, training foreign persons in the use of defense articles. But training with respect to prevention of, say, domestic terror attacks or popular uprisings might not involve training in the use of defense articles. Under the proposed new definition of defense services, training foreign troops on the use of defense articles would itself be excluded if the information provided is in the public domain. In most instances, of course, the best way to minimize risk as to whether a particular aspect of training oversteps the bounds is to have the Department of State approve a Technical Assistance Agreement covering the training.

ABOVE: Andrew Shapiro

---

The State Department’s Andrew Shapiro addressed the Defense Trade Advisory Group Plenary this morning, and the text of his remarks as prepared were released a little while ago. Mostly Shapiro assured his audience of defense industry types that he expected Foreign Military Sales and Direct Commercial Sales of U.S. armaments to our allies would increase. (This, I suppose, is seen as an antidote to the impact of possible spending cuts by Congress on the Pentagon’s acquisition of arms and equipment.)

But the remainder of his speech hinted at some upcoming initiatives and agency actions. Fist, Shapiro said that proposed rule on third country and dual nationals that DDTC announced last August had been revised on the basis of industry comments and would be published this week. That proposed rule was widely disappointing to the export industry by failing to adopt an equivalent of the Department of Commerce’s rule that last awarded citizenship applies. Instead, it imposed upon defense contractors a broad and unmanageable obligation to snoop on their employees to determine whether too many phone calls to relatives in China suggested that the dual national bore unacceptable allegiances to the country of his or her birth. I, for one, am quite interested to see if the new rule abandons that nonsense.

Second, Shapiro announced that DDTC would gradually push its antediluvian (but highly profitable) registration process into the twentieth century by instituting an electronic registration process and — gasp! — electronic payments of registration fees. Currently, foreign broker registrations require that fees be paid by a paper check drawn on a U.S. bank and mailed (or delivered by carrier pigeon) to the State Department. An elderly aunt of mine has figured out how to receive credit card payments for the handmade crafts that she sells online. How hard can this electronic payment business be for the State Department? If the State Department would like some advice from Aunt Ellen on how to set up this electronic payment business, I’m sure she would be happy to oblige.

[Note to Readers: A busy schedule and some other factors resulted in fairly sparse posting over the past several weeks. More regular posting will resume with this post . . . I hope!]

Earlier this month, the Directorate of Defense Trade Controls (“DDTC”) issued a public notice proposing to revise the definition of defense services set forth in section § 120.9 of the International Traffic in Arms Regulations (“ITAR”). The most significant change is that the new rule would exclude the provision of public domain data from the definition of defense services. This is both a welcome revision and an embarrassing admission by DDTC that the previous definition was absurdly broad.

Under the current definition, if a U.S. person tells a foreign person that the ratio of an aircraft’s speed to the speed of sound affects the forces on the aircraft and that the speed of sound at sea level is 340.29 m/s, the U.S. person has arguably provided a defense service in the design and development of a defense article if the foreign person was previously unaware of those facts. Telling a person that it is a good idea to clean a rifle regularly could also be construed as a defense service because it provides assistance in the use of a defense article.

The problem here is that DDTC takes a rather counterintuitive (or more bluntly, absurd) view of what is and isn’t public domain. Previously it has advised an exported that photographs of military cockpits found on the Internet was not public domain. The basis for this decision is that the definition of public domain in section 120.11 of the ITAR does not specifically reference the Internet. (It does however include information generally accessible at libraries open to the public and most libraries make Internet access available to anyone who walks through the door.) So, until DDTC deals with how it wants to define the public domain, the ITAR could still forbid a U.S. person from sending an Internet link to a foreign person.