Carlos Dominguez and his Madrid-based company Elint SA have been administratively debarred by the Directorate of Defense Trade Controls in connection with his unauthorized re-exports and re-transfers of night vision equipment shipped to him from the United States pursuant to DDTC licenses. The unauthorized re-exports and re-transfers were discovered by so-called Blue Lantern checks conducted by foreign embassy staff at the request of the DDTC to determine the ultimate disposition of items exported from the United States pursuant to DDTC licenses. (Interestingly, the cables requesting the Blue Lantern transfers had been previously disclosed when they were leaked by WikiLeaks.)

As a result of the unfavorable Blue Lantern checks, DDTC first imposed in 2009 a policy of denial on Dominguez and Elint. In 2010, DDTC followed up by sending a directed disclosure demand to Elint and Dominguez. A directed disclosure is a DDTC demand that the recipient investigate its export practices and provide to DDTC a list of all its export violations, a request that Dominguez and Elint not surprisingly ignored. A charging letter followed, also ignored, which led to a finding of default by an administrative law judge and the instant order of debarment.

Although section 127.7 of the ITAR specifies that such administrative debarments are “generally” for a period of three years, the order against Dominguez and Elint mentions no time period and is, presumably, permanent. It is safe to say that DDTC is not amused with Dominguez, and this appears to be in large part because of considerable evidence alleged by DDTC that Dominguez tried to evade the policy of denial by setting up shell companies and acting through third parties.

Interestingly, DDTC claims that it has the authority to issue “directed disclosures” under section 122.5(b) of the ITAR, which is, at best, a rather fanciful construction of that section. That section requires that records “maintained” under section 122.5 must be made available to DDTC, but says nothing about any obligation to create new records at the request of DDTC and then provide them. More interestingly, section 122.5 applies to “persons required to register” under Part 122. That obligation is imposed on persons who engage “in the United States in the business of manufacturing or exporting” defense articles. That, of course, does not cover foreign end users of U.S. exports, so it is not at all clear how DDTC can justify issuing the directed disclosure to Dominguez under section 122.5(b).

Well, today is truly a red letter day in the annals of ITAR registration puffery. For the first time ever (at least that I’ve seen), we have a company boasting that it has received ITAR re-certification. This blog has reported plenty of instances of companies that breathlessly announce that they have received “certification” upon their first ITAR registration filing, but until now no company has tried to make a news event from filing their renewal of that registration.

The proud company is Illinois-based Clickenbeard & Associates, Inc., and their press release really slathers it on thickly:

Clinkenbeard … has received official International Traffic in Arms Regulations (ITAR) re-certification from the United States Department of State, Bureau of Political-Military Affairs.

… Companies receiving this certification demonstrate that they have knowledge and understanding to fully comply with the AECA and ITAR as well as having corporate procedures and controls in place to ensure compliance.

“This re-certification is evidence of our commitment and ability to safeguard all defense- and government-related data for our customers and our country. Further, it demonstrates our government‘s trust in our doing so,” explains Steve Helfer, Clinkenbeard general manager.

I particularly like the statement that registration renewal demonstrates the “government’s trust” in Clickenbeard. To repeat (for the, oh, four thousandth time), all that ITAR registration (or re-registration for that matter) demonstrates is that the company had the filing fee in its bank account, could figure out how to fill out a form and send it to DDTC, and was able to pay for the postage required to send it in. Registration numbers are given by DDTC to everyone who can do those three things, even if they don’t know the difference between “registration” and “certification,”  between an export and a deemed export or between a DSP-83 and a salt shaker.

Buried among all the articles on the recent events on the Hill, the Washington Post snuck in an article on the White House’s export control reform initiative and on export controls in general. Unfortunately, but not surprisingly, the reporter gets tangled up in the complexities of the current export control regime and muffs a few things.

The worst of these errors was the simplest one to avoid. As regular readers of this blog know, we have spilled several million gallons of digital ink (or should I say illuminated millions of computer screen pixels?) decrying and ridiculing the concept that the required registration under the International Traffic in Arms Regulations (“ITAR”) for manufacturers of defense articles represents some kind of “certification” of the manufacturer.   Instead, registration signifies nothing more than that the manufacturer filled out a  brief form disclosing certain corporate information and paid the required fee. It is not, by any stretch, an “ITAR certification.”

But now this “certification” canard has wriggled its way into the august pages of Washington’s paper of record:

Building the boards in the United States costs Kincaid “100 to 400 percent” more, he says, but he did not hesitate to fill out the paperwork five years ago and pay the fee, which is now more than $2,000, to become an ITAR-certified manufacturer because he appreciated the made-in-the-United-States sentiment and thought that it might “bring some of the work back.”

Sigh.

And then there’s this:

So a defense contractor sending equipment for U.S. military use on a battle­field abroad must obtain its authorization to “export” its product to a foreign country.

No. If the manufacturer sells the equipment to the U.S. military and they take it abroad, the manufacturer doesn’t need a license.

And this:

As Abrams sees it, the trouble for businesses like Kincaid’s isn’t compliance with export controls but the uneven application of the controls. For instance, her organization has seen identical bid requests “with one stamped ITAR and one not stamped ITAR,” she says. So if one company complies and the other does not, then the noncompliant manufacturer seizes a significant competitive advantage, assuming no one comes calling from the departments of State, Commerce or Treasury — three agencies with different computer systems, missions and cultures, but all with responsibilities in export controls.

Again, no. Neither Commerce nor Treasury would have any responsibilities or jurisdiction over the unauthorized export of ITAR-controlled items.

I spent some time speaking with the reporter on this story and, apparently, did not do a good enough job communicating to him some export control basics, so I take part of the blame for these last two errors. But, I made a big deal with him about “certification” versus “registration,” so there was no excuse for that mistake.