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Archive for the ‘Entity List’ Category

Aug

4

When Will They Ever Learn?

Posted by Clif Burns at 5:44 pm on August 4, 2011

ABOVE: Bharat Dynamics HQ
in Kanchanbagh, India

Late last week, the Bureau of Industry and Security (“BIS”) released documents relating to an agreement by Toll Global Forwarding (USA), Inc. to pay $200,000 to settle charges that it had aided and abetted nine unlicensed exports of EAR99 items to companies on BIS’s Entity List. The company also agreed to conduct an external audit of its export controls compliance program.

The violations at issue were committed by Baltrans Logistics prior to its acquisition by Toll Global Forwarding in 2008. The exports in question were to Bharat Dynamics Ltd. and Solid State Physics Laboratory, both government-owned entities in India which have since been removed from the Entity List.

It is hard to work up much sympathy for companies engaged in this kind of violation by failing to consult an easily accessible list on the BIS website. And in this instance, it wasn’t an isolated failure but instead nine separate failures. Worse yet, this wasn’t Baltrans’s first time at the rodeo. In 2007 Baltrans agreed to pay a $6,000 fine to settle charges of an unlicensed export to another Indian company on the Entity List. Moreover, one of the unlicensed exports in the current case occurred after Baltrans agreed to pay the earlier fine. That might explain the high fine in this case as well as the external audit requirement

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Jul

13

Judge Denies Request to Hold Export Defendant Without Bond

Posted by Clif Burns at 8:13 pm on July 13, 2011

The story of the unlicensed export of epoxy paint by PPG to the Pakistan Atomic Energy Commission carries on. This blog reported on the $500,000 fine imposed on the regional sales manager involved. The epoxy was shipped to fulfill a contract between a Chinese subsidiary of PPG and another Chinese company engaged to work on the construction of the Chasma nuclear power plant for PAEC. Because PAEC is on the Bureau of Industry and Security’s Entity List, the export required a license from BIS.

Xu Wang, a U.S. woman who ran the Chinese subsidiary, was arrested last month. During a hearing yesterday, the government argued without success that she should be held without bail. According to this AP report on the hearing, the judge questioned the prosecution’s assertion that the case had serious national security ramifications.

“This is not latex paint,” said assistant U.S. Attorney G. Michael Harvey. “This is a very sophisticated paint, which has been tested and certified for use inside the containment facility of a nuclear reactor.”

That may well be the case, but if this paint indeed had such strategic implications, one has to wonder why the BIS stated, as it did in the case involving the sales manager, that the item was classified as EAR99.

A hearing was to be held today to determine the conditions of Mrs. Wang’s release.

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Nov

8

What’s In The U.S.-India Export Agreement?

Posted by Clif Burns at 9:01 pm on November 8, 2010

Category: BIS • CCL • Entity List

White House Photo A joint statement released today by President Obama and Prime Minister Singh of India announced a new planned cooperation between the United States and India. Long on aspiration and short on details, the statement says that the two countries have agreed to “transform bilateral export control regulations and policies to realize the full potential of the strategic partnership between the two countries.”

The part of the proposal that has attracted the most attention, particularly in the Indian press, is the agreement to remove some or all of the Indian companies and agencies currently on the Entity List maintained by the Bureau of Industry and Security (“BIS”). Currently, the Entity List, which adds special license requirements for most exports to the designated entities, covers Bharat Dynamics Limited, three subordinate agencies in the Defense Research and Development Organization, four subordinate agencies of the Indian Space Research Organization, and two components of the Department of Atomic Energy as well as all nuclear reactors not under International Atomic Energy Agency safeguards.

The language in the joint statement relating to these entities is somewhat ambiguous:

[T]he two leaders decided to take mutual steps to expand U.S. – India cooperation in civil space, defense, and other high-technology sectors. Commensurate with Indiaâ€™s nonproliferation record and commitment to abide by multilateral export control standards, these steps include the United States removing Indian entities from the U.S. Department of Commerceâ€™s â€œEntity Listâ€ and realignment of India in U.S. export control regulations.

Notice the statement does not say that “all” Indian entities will be removed from the Entity List. Because the focus of the statement is on cooperation in “space, defense, and other high-technology sectors,” there is a good possibility that every Indian entity except the two listed Department of Atomic Energy components and the unsafeguarded nuclear reactors will be removed.

It is also not clear what is meant by the “realignment of India in U.S. export control regulations.” Perhaps India might be removed from Country Group D and promoted to a more-favored group. Maybe the Country Chart will be amended to change the reasons for control applicable to India. Or maybe licensing officers at BIS will be directed to think five nice thoughts about India each day.

Finally, the joint statement indicates that the U.S. will support India’s membership in four multilateral export control regimes — Nuclear Suppliers Group, Missile Technology Control Regime, Australia Group, and Wassenaar Arrangement. Of course, India will first have to adopt the controls required for those regimes, something it has so far not done.

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