Archive for January, 2007


Jan

22

Compliance and Rejection Division


Posted by at 4:08 pm on January 22, 2007
Category: DDTC

Part 129Last week DDTC posted a notice on its website warning license applicants that their license applications would be returned if the applicant’s name on the license application did not exactly match the name on the applicant’s registration. Unsure of your exact name as registered? Don’t call DDTC, because they won’t tell you. A “mass-mailing” in January 2007 is promised in which everyone will be told their DDTC approved names. If Internet gambling were allowed, I might make a book on the likelihood of that actually occurring in January.

Even more ominous is a sentence slipped in at the very end of the notice:

Subsequent Web site notices which will be posted shortly on the following related matters:

. . .

2. Implementation of new procedures in the Office of Defense Trade Controls Compliance (Compliance & Registration Division) to reject deficient registration submissions.

This seemingly innocent promise should be filed in the “I Told You So” Folder. DDTC’s new informal guidelines under Part 129 expanded the scope of overseas sales representatives that will now be required to file registration applications. Most of these sales reps are foreign nationals for whom English is not their first language and for whom correctly filing out a Form DS-2032 is complicated by DDTC’s confusing and inconsistent instructions as we’ve pointed out before. So we predicted a wave of deficient registration applications and it now seems we were probably right.

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Copyright © 2007 Clif Burns. All Rights Reserved.
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Jan

18

Welcome to Juba!


Posted by at 10:08 pm on January 18, 2007
Category: Arms Export

Celebrating the Southern Sudan Peace AgreementAccording to one website, accommodations in Juba, the regional capital of Southern Sudan, are “not for the faint-hearted.” Of the eleven “hotels” in Juba listed by the site , most are tent camps. Some huts are available if you want to splurge. Most people will pray for a room at the Equatoria which actually boasts a restaurant.

Many lucky defense contractors will soon be learning first hand the pleasures of Juba because the State Department, effective January 17, has partially lifted the arms embargo against Sudan. Under the determination published today in the Federal Register, the State Department has authorized the provision of

non-lethal military equipment and related defense services (hereafter ‘‘assistance’’) to the Government of Southern Sudan for the purpose of constituting a professional military force. . . .

The Bush White House had, on October 13, 2006, exempted Southern Sudan from the sanctions that had been imposed on Sudan by President Clinton in 1997. Both today’s action and the October action were outgrowths of the December 31, 2004 peace accord between the Sudan People’s Liberation Army and the government of Sudan in Khartoum. Under the peace accords, Southern Sudan is granted autonomy for six years with a referendum on independence after that six year period. The Bush administration had held out the possibility of the lifting of sanctions as an inducement to the peace accords. The civil war between the SPLA was premised, at least in part, on the efforts of the Muslim government in Khartoum to impose sharia on the predominantly Christian south.

Probably the first Americans to arrive in Juba will be Blackwater USA, the Virginia-based private military corporation that, before today’s notice, already had a license pending to train a military force in Southern Sudan. My guess is that the Blackwater guys are used to living in tents.

Oh, and for everyone else headed for Juba, I hear the restaurant at the Equatoria is excellent. Try the Kajaik.*

________

*A stew made of dried fish and sorghum porridge.

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Jan

17

No Room at the Inn


Posted by at 2:28 pm on January 17, 2007
Category: Cuba Sanctions

Scandic Edderkoppen Hotel in Oslo, NorwayEarlier this month, the Scandic Edderkoppen Hotel in Oslo, Norway, canceled reservations that had been made by a Cuban delegation to an Oslo travel fair. The hotel, a subsidiary of Hilton Hotel Corp., said that it was forced to do so in order to comply with the U.S. embargo on Cuba.

This created an uproar in Norway, at least to the extent that the Norway can ever be said to be in an uproar. One national labor union called for a boycott of Hilton Hotels and another asked for the government to bar Scandic from continuing to do business in Norway. One union spokesman justified the boycott on the grounds that it was “unacceptable for the U.S. to dictate to the whole world.”

Christina Karlegran, a regional spokesperson for Hilton, defended the hotel’s actions:

We have to follow American law. We can’t see that we have broken any Swedish or Norwegian law. If it turns out to be illegal, we will address that.

Unfortunately, Ms. Karlegran is wrong. E.U. Council Regulation (EC) No 2271/96 forbids European subsidiaries of American companies from complying with the U.S. embargo on company and directs the member states to impose sanctions for violations of this rule that are “effective, proportional and dissuasive.” Regulation 2271/96 is binding in Sweden, which is a member of the E.U., and in Norway, which is not a member of the E.U. but which has agreed to extend the effect of that regulation (and others) to Norway through the European Economic Area Agreement.

Additionally, the Anti-Racist Center in Oslo filed a police complaint that the action was discrimination based on citizenship in violation of Norwegian law.

This situation illustrates the untenable situation that the Cuba embargo creates for U.S. companies doing business in Europe and elsewhere. The E/U Directive is no defense to the violation of the U.S. law; neither is the U.S. law a defense to violation of the E/U Directive. Companies, therefore, are forced to pick between penalties, which is rather like being forced to place a bet on a Yankees-Orioles game.

UPDATE: This post has been revised, thanks to reader Anna, to note that the hotel involved was a Scandic hotel in Oslo, Norway, not a Scandic hotel in Stockholm, Sweden, as I mistakenly thought.

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Jan

16

Tehran’s Tomcats


Posted by at 8:21 pm on January 16, 2007
Category: Arms Export

Iranian F-14 Sleeve PatchBack in the 1970s when the Shah was on his throne and Iran was our friend, the U.S. sold Iran a fleet of F-14 Tomcat fighter jets. Iran is still flying them and needs parts. In fact, F-14 parts were on the top of the list of the parts delivered to Iran as part of the Iran-Contra deal. So where is Iran getting parts today? From the Pentagon apparently.

Anyone familiar with the Defense Reutilization and Marketing Service (DRMS) and its commercial partner Government Liquidation LLC will not find it surprising in the least that surplus F-14 parts sold by them are winding up in Iranian hands. All USML surplus parts are required to be sold with an End User Certificate that informs the buyer of export restrictions. Certain sensitive USML surplus parts are required to be demilitarized or “demilled” before sale. In more than a few instances the processing personnel at DRMS fail to do either.

According to an Associate Press story which hit the wires today, surplus F-14 Tomcat parts have been sold to middlemen acting on behalf of Iran:

In one case, convicted middlemen for Iran bought Tomcat parts from the Defense Department’s surplus division. Customs agents confiscated them and returned them to the Pentagon, which sold them again – customs evidence tags still attached – to another buyer, a suspected broker for Iran.

The AP report provides a number of other instances of military surplus winding up in the hands of the Iranians and the Chinese.

You may also wonder what happens if someone buys a surplus USML item that doesn’t have an EUC and then exports it. Well, the exporter could go to jail. The government can be mistaken about whether an item is USML; an exporter can’t.

(Hat tip to Kevin Wolf at Bryan Cave who pointed me to the AP story.)

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Jan

15

NRC Loosens Libya Controls


Posted by at 12:39 pm on January 15, 2007
Category: NRC

General Qaddafi and his new American smoke detectorSix months after the State Department removed Libya from the list of state sponsors of terrorism, the Nuclear Regulatory Commission got around to changing its regulations to reflect this removal. In a Federal Register notice issued Friday the NRC amended its rules and changed Libya’s status from an “embargoed country” under 10 C.F.R. § 110.28 to a “restricted country” under 10 C.F.R. § 110.29.

The effect of that designation is that certain nuclear materials for which general export licenses are available under NRC rules may now be used to export those materials to Libya. For example, small quantities of americium-241 may now be exported to Libya under the general license provided in § 110.23.

Although exporting americium-241 sounds rather sinister, you should realize that small amounts of americium-241 are used in certain industrial applications such as equipment used to measure the rate of production of oil wells. Tiny amounts (less than 37 kBq) of americium-241 are also used in the ionization chambers of many residential and commercial smoke detectors. Ionization smoke detectors are, in fact, the principal use of americium-241.

People in Tripoli, however, shouldn’t expect to be getting American smoke detectors anytime soon. Under § 110.23 americium-241 can be exported under the general license to restricted countries such as Libya only when “contained in industrial process control equipment or petroleum exploration equipment.” I suppose we are still concerned that Qaddafi might dismantle a hundred million or so smoke detectors, extract the americium-241 and make a dirty bomb or two.

I suppose I should acknowledge that a terrorist cell that couldn’t shoot straight did try to make a dirty bomb from smoke detectors. A recently declassified intelligence report to Congress contained this statement:

British authorities announced the August 2004 arrest of members of an Islamic terrorist cell in the UK that may have attempted to produce an RDD [radiation dispersal device] using a radioactive isotope of americium taken from smoke detectors. The knowledge base and competence of this cell was low.

Uh, yeah. Do the math on how many smoke detectors it would take, at 37 kBq of americium-241 per smoke detector, to make a useful dirty bomb and saying that the competence of this cell was low is an understatement.

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Copyright © 2007 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)