Mounting tension between the export industry and DDTC became evident this week when a major coalition of the leading trade associations — The Coalition for Security and Competitiveness — sent a letter to President Bush requesting a meeting to discuss proposed reforms relating to DDTC. Among the members of the coalition are the Aerospace Industries Association, the National Association of Manufacturers and the U.S. Chamber of Commerce.

It should not comes as a surprise to any one, DDTC staff included, that the specific proposals requested by the Coalition focused on the abysmal delays that have become the norm at DDTC as well as the lack of transparency and cooperation by DDTC with the industry that it regulates. Just last week the DDTC posted another jeremiad on its website about the low quality applications it was receiving and renewed its vow to simply return these applications without action (including the simple action of picking up the telephone to call the exporter.) The Coalition proposal responds to this attitude on the part of DDTC by proposing that the DDTC be required to provide notice of intent to deny or intent to return without action before such decisions are finalized.

The Coalition proposal also requests that funds be released to provide additional licensing staff to the DDTC and further requests that licensing actions be taken within reasonable and specified time periods. The specific processing periods requested by the Coalition will no doubt lead most exporters to swoon with joy:

The current export control system is not delivering decisions on technology release in the time sensitive fashion critical to U.S. interests. As both an individual proposal and a yardstick to measure progress, we believe a more efficient export control system should process decisions on individual “unstaffed” (i.e. State Department review only) licenses or decide to send individual licenses for inter-agency “staffing” within 5 calendar days. More complex agreements that may or may not require inter-agency review should be either processed as unstaffed or staffed out within 10 calendar days. If licenses or agreements are staffed, the inter-agency review should be completed within a total of 30 days. Understanding that licenses and agreements for NATO+3 allies may involve more sophisticated technology transfer requests, the fact that they are close allies should be given due consideration and their staffed license and agreement applications fast-tracked and completed within 20 total days. A final licensing decision by the State Department after the completion of an interagency review should be issued within five days.

It’s hard to say whether the adoption of these processing metrics is likely, but we can always hope, can’t we?

With profound apologies to Mel Brooks, it’s springtime for Muammar in Libya, winter for Hugo Chavez! No, that’s not the latest lyric from a Broadway hit; rather it’s a reference to a notice of a final rule issued by DDTC that appeared in the February 7 Federal Register. Under the new rule, DDTC added Venezuela to the list of proscribed countries under section 126.1(a) of the ITAR while loosening the previous arms embargo that had been in place against Libya.

Libya was removed from the list of countries in section 126.1(a) subject to a general policy of denial. Under the new rule, Libya has been moved to its own new section — 126.1(k) — which still retains the general policy of denial with two major exceptions to be determined on a case-by-case basis:

(1) Non-lethal defense articles and defense services,

(2) Non-lethal safety-of-use defense articles (e.g., cartridge actuated devices, propellant actuated devices and technical manuals for military aircraft for purposes of enhancing the safety of the aircrew) as spare parts for lethal end-items.

If that language seems both familiar and opaque to you — at least as far as the meaning of “non-lethal safety-of-use defense articles” — it’s because these are the two exceptions that used to be in place for Indonesia. In that context, “non-lethal safety-of-use defense articles” was intended by DDTC to refer to things such as aircraft ejection seats. Personally I can’t wait to tell someone riding in a car with me to fasten their “non-lethal safety-of-use restraint items.”

Venezuela’s addition to the list of countries in section 126.1(a) of the ITAR shouldn’t come as surprise to anyone who hasn’t been stranded on an ice floe without a satellite phone for the past year or so. It probably didn’t help that Chavez made the whiff of sulfur remark at the U.N. last September, but the ball really had already started rolling for Venezuela on August 17, 2006, when the DDTC announced a general policy of denial for Venezuela and the revocation of all existing licenses. The addition of Venezuela to the list in section 126.1(a) doesn’t represent a substantive change in policy but is mostly a housekeeping matter.

Last week a Portland, Oregon food additive broker learned the hard way that he should have stuck to MSG and not gotten involved in exporting silver-zinc batteries. It seems that the batteries in question are used to power the Hawk missile and were ultimately destined for Iran. So Robert Caldwell was arrested in a luxury hotel in San Antonio after he tried to buy the batteries from an undercover ICE agent on behalf of a U.K. citizen, still at large, who wanted them shipped to Iran by way of the Netherlands.

A copy of the ICE agent’s affidavit in support of the criminal complaint against Caldwell is interesting reading, not the least because of the ICE agent’s frequent and mistaken reference to the DDTC as “the ODTC.” According to the affidavit, Caldwell was attempting to buy the batteries on behalf of Christopher Tappin, a U.K. citizen and director of Brooklands Overseas Services. Caldwell contacted an undercover agent to arrange for a purchase of Eagle Pilcher Silver Zinc batteries GAP-4328. The agent then sent Caldwell a pro-forma invoice for the batteries indicating that export of the batteries without a DDTC license was prohibited. When Caldwell next spoke with the agent he expressed concern about the export restriction on the pro-forma invoice. Somehow or another (and we can only speculate here), the agent alleviated Caldwell’s concerns, since Caldwell sent to the agent a purchase order for the batteries, inaccurately describing them as “Tideland gap inert non-spillable reserve batteries.” The agent and Caldwell then met in a San Antonio hotel. During that meeting Caldwell gave the agent a check for the batteries, and, instead of the batteries, got a pair of handcuffs instead.

One can’t help but get the impression from the affidavit that Caldwell, more accustomed to dealing with Red Dye No. 6 than missile batteries, may have gotten in over his head and may well have had his well-founded anxieties about the export alleviated by the ICE undercover agent.

Nor is the USML status of the Eagle Picher batteries involved entirely clear. The affidavit claims that the batteries fall under Category IV(h) of the USML and then mistakenly asserts that this makes the batteries “significant military equipment.” Apparently the agent doesn’t know what those asterisks on the USML mean. But I’m not even certain that the batteries are appropriately placed in Category IV(h) which would require that they be specifically designed or modified for military use. If these batteries are still being sold, as they obviously are, they must have other uses than powering the discontinued Hawk missile. Of course, since Eagle-Picher lists its line of Silver Zinc batteries under its line of “defense and space power” products, I would counsel an export license even if the USML status of the batteries isn’t entirely clear.

Last week we were wondering about the origin of the name “Blue Lantern” for the pre-shipment and post-shipment verification program conducted by DDTC. Andrea Fekkes Dynes of General Dynamics, via “The Daily Bugle,” has an idea:

Last Friday’s Daily Bugle contained an article about State/DDTC’s Blue Lantern program [Daily Bugle, 26 Jan 2007, Item #10, Counsel Comment (R. Clifton Burns): “Beware My Power, Blue Lantern’s Light!”]. That article posed the question about the possible origin of the term “Blue Lantern.” One of our export compliance officials (who works in the UK) provides a possible answer: “It probably originates from the UK as, before about 1970, every police station in the UK had a blue lantern illuminated outside which signified to all the ‘strong arm of the law’.”

That seems a reasonable possibility, although I wonder whether anyone at DDTC had any familiarity with UK police stations during that period.

I’m beginning to suspect that it might actually be a reference to the comics. In an ODTC (yes, you remember the ODTC) presentation on the Blue Lantern program, there is a reference to three government wide end-use monitoring programs: Blue Lantern (ODTC), Golden Sentry (Department of Defense) and Green Lantern (Department of Commerce). The Sentry, in case you have forgotten, is a Marvel comics character whose clothing changes into the Golden Sentry suit when he undergoes the obligatory transformation from ordinary Robert Reynolds to a superhero.

The mystery thickens.