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Archive for May, 2009

May

28

Georgia Arms Exports on Hold: Fact or Rumor?

Posted by Clif Burns at 4:44 pm on May 28, 2009

ABOVE: Tbilsi, Georgia

Worldnet Daily, a highly partisan and potentially unreliable source, reports that the Obama administration

placed a hold on all U.S. military exports to Georgia due to a “policy review,” with no indication as to when it will be completed or what defensive military items will be allowed to be exported ….

U.S. sources [said] that such a review has been so “close-hold” that even the Defense Department, which also reviews license applications for national security reasons, was unaware of the action. DOD has been recommending approval of munitions license applications for Georgia

The whiff or partisanship, however, is ripe. The article claims that the Obama administration was “bowing to Russian pressure” and cited an un-named U.S. official saying this:

“The Obama administration is caving to the Russians,” one official said. “It means that we’re letting the Russians control U.S. foreign policy interests.”

Leaving aside that Worldnet Daily, which is still claiming that Obama isn’t a U.S. citizen, may have a partisan axe to grind with the Obama administration, the notion that the U.S is caving to Russia on the Georgia issue isn’t terribly consistent with recent statements from Secretary of State Clinton, who has continued to emphasize in public that the U.S. and Russia don’t see eye-to-eye on Georgia. In her joint statement with Russian Foreign Policy Minister Sergey Lavrov on May 7, Secretary Clinton emphasized that Georgia was an issue on which U.S. and Russian “views may diverge” and on which the countries have a disagreement. More recently, Secretary Clinton said in an interview with Russian television outlet RTR that Georgia remained an “area of disagreement” between the two countries.

So my vote is for rumor. But I’d be interested to hear from any readers who have licenses for exports to Georgia held up.

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May

27

Are There Unknown Knowns, or Known Unknowns?

Posted by Clif Burns at 9:25 pm on May 27, 2009

Category: BIS

ABOVE: Skopje, Macedonia

The Bureau of Industry and Security (“BIS”) just released an order fining and denying export privileges for Micei International, a retailer of guns. police equipment, digital cameras and other miscellaneous items in Skopje, Macedonia. The order, which adopted a recommended order by an administrative law judge, arose from charges that Micei aided and abetted Yuri Malinkovski, aka Yuri Montgomery, in violating an order denying Malinkovski’s export privileges. Pursuant to that order, Micei was fined $126,000 and had its export privileges denied for 5 years.

Malinkovski’s export privileges were denied in 2000 based on his conviction for unlicensed exports of stun guns to Macedonia. According to the BIS charging letter and the adminstrative law judge’s decision adopted by the order, Micei had Malinkovski negotiate the purchases of various items, including shirts and boots, for export from the United States to Micei in Skopje. Although the documents are not entirely clear on this point, it appears that the items were exported not by Malinkowski but by the vendors with whom he was negotiating on Micei’s behalf.

Micei was charged with knowing violations under section 764.2(e) of the Export Administration Regulations. The basis for the claim that these were knowing violations is, to say the least, somewhat dubious. The ALJ’s recommended order noted two bases for this finding. One was that the denial order was published in the Federal Register and that therefore knowledge of the denial order could be “imputed” to Micei. “Imputed” knowledge is a thin reed on which to base a claim of actual knowledge, particularly where knowledge is imputed to a company in Macedonia based on a Federal Register notice. I don’t think I’m going out on a limb here when I say that it seems a stretch to expect a company in Skopje, Macedonia, to subscribe to and read each word of the Federal Register to make sure it wasn’t dealing with parties whose export privileges had been denied.

The ALJ order also noted that an officer of Micei knew that Malinkowski was subject to a denial order. This is a better basis for a claim of a knowing violation, but still somewhat short of a slam dunk. Since it appears that the items were being exported by the sellers, and not by Malinkovski, there is a reasonable possibility that Micei didn’t know that Malinkowski’s actions as a purchasing agent rather than as an exporter would violate that order. To the credit of the BIS’s final order, however, the agency relied only on this statement by the Micei officer, and not on the claim that Federal Register publication could be imputed knowledge, in finding a knowing violation.

(For those of you who click through the BIS link, prepare to be a bit confused because it appears that someone at BIS shuffled the pages before scanning them.)

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May

26

Microsoft Shuts Off IM Service in Sudan and Other Sanctioned Countries

Posted by Clif Burns at 2:42 pm on May 26, 2009

Category: Sanctions • Sudan

Live Messenger in Sudan Economic sanctions continue to spread into cyberspace as Microsoft announced last Friday that customers in sanctioned countries would receive an error message if they tried to log into their Windows Live Messenger accounts and would no longer be able to use the service.

When you try to sign in to Windows Live Messenger, you receive the following error message:

810003c1: We were unable to sign you in to the .NET Messenger Service.

Microsoft has discontinued providing Instant Messenger services in certain countries subject to United States sanctions. Details of these sanctions are available from the United States Office of Foreign Assets Control [“OFAC”].

Why it took Windows so long to get with the program when arch-rival Google had disabled downloads to Sudan and other sanctioned countries ages ago is not clear.

Although the shutoff applies to Cuba, North Korea, Iran, Sudan and Syria, Sudan seems to have taken it most to heart, judging from this report on the shutoff in the Sudan Tribune, a Paris-based on-line newspaper covering Sudan:

The software, Microsoftâ€™s Windows Live Messenger, allows users to chat directly with one another, send photos, play games or send messages to mobile phones. The Messenger is widely used by the Sudanese diaspora to contact their families and until last week had been available for free downloading in the countries targeted by US sanctions.

Of course, Microsoft’s action is incredibly easy for users to circumvent. First, users can log back into their accounts and change their country to a non-sanctioned country. (Oddly, Microsoft’s drop-down list for countries on its Live Messenger sign up page– still includes Sudan — not to mention Cuba, North Korea, Iran and Syria!) Second, if Microsoft is also using geolocation filters on the IP addresses, the user can always connect through a proxy server located in a non-sanctioned country. Et voilÃ , the Sudanese (or Syrian, Cuban, Iranian or North Korean) resident can IM to his or her hearts content, Microsoft is in full compliance with the law, and OFAC is none the wiser and can still believe that it has hastened the downfall of these governments by keeping their citizens from communicating with their family and friends.

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May

21

House Committee Passes Export Reform Proposal

Posted by Clif Burns at 8:08 pm on May 21, 2009

Category: Arms Export • Criminal Penalties • Export Control Proposals

ABOVE: Howard Berman
Chair, House Foreign Affairs

Yesterday, the House Committee on Foreign Affairs approved legislation that would, among other things, amend parts of the Arms Export Control Act (“AECA”). The Bill, H.R. 2410, is titled the â€˜â€˜Foreign Relations Authorization Act, Fiscal Years 2010 and 2011â€™â€™ and was sponsored by Rep. Howard Berman, chair of the committee.

Like many of its predecessors, the bill would set processing time goals for licenses and commodity jurisdiction requests, each to be no more than 60 days. And commodity jurisdiction determinations would be required to be posted by the Directorate of Defense Trade Controls (“DDTC”) on its website. The processing times are just “goals” so, even if the legislation passes, I wont be holding my breath waiting for CJ requests to blast out the door in 60 days. But I think we can all give some polite golf claps, and maybe even a louder hooray or two, to the requirement that CJs be posted on the website.

Section 826 of the bill permits the President to remove “satellites and related components” from the United States Munitions List, but it is poorly drafted and has a confusing China exception which reads:

(b) Exception- The authority of subsection (a) may not be exercised with respect to any satellite or related component that may, directly or indirectly, be transferred to, or launched into outer space by, the People’s Republic of China.

Come again? Does this mean that satellites and parts that might be transferred to China stay on the USML and, like all other items, require a license to all destinations? Or does it mean that DDTC can decide that the satellite-related items in Category XV can be exported to every destination but China without a license? And where does the Bureau of Industry and Security (“BIS”) fit into this? Can it require BIS licenses for satellites and parts removed from the USML? Your guess is as good as mine.

A third provision of interest in the proposed legislation might be referred to as the Full Prisons Act. Section 831 increases the maximum criminal penalty from 10 years imprisonment to 20 years imprisonment. For whatever reason, Congress seems unable to enact any reform with increasing prison sentences, even though this appears to be an effort to conform the criminal penalties under the AECA to the increased penalties provide under the International Emergency Economic Powers Enhancement Act (“IEEPEA”) for violations of other export laws. Look for life imprisonment to be a penalty for false AES entries in the not-so-distant future.

Section 831 also attempts to conform civil penalties under the AECA to those enacted under IEEPEA by providing for a penalty equal to the greater of $250,000 per violation or twice the value of the export involved. But Representative Berman’s legislation doesn’t quite manage to get this right either. First, it fails to amend section 38(e), 22 U.S.C. Â§ 2778(e) of the Arms Export Control Act which sets the maximum civil penalty at $500,000. Does this mean that a transaction valued at $1 million, and thus eligible for a $2 million penalty under the amended 38(c), is limited to a penalty of $500,000?

Worse the language of the bill, unlike the language in IEEPEA, makes the penalty payable “upon conviction.” Does that mean that the civil penalty is only available after a criminal conviction? Again, this is probably a drafting oversight, but with all the newly unemployed lawyers in town, can’t the committee hire somebody to clean up its bills?

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May

20

Do What The E.U. Says Not What It Does

Posted by Clif Burns at 7:39 pm on May 20, 2009

Category: Arms Export

Flags The excellent online E.U. news source, EUobserver.com, ran an interesting column on the E.U. and arms sales to Sri Lanka. The column noted that on Monday the E.U. condemned human rights abuses by the Sri Lankan military and demanded an independent inquiry into the matter. The column cited a statement of the E.U. foreign ministers which stated:

The EU is appalled by the loss of innocent civilian lives as a result of the conflict and by the high numbers of casualties, including children, following recent intense fighting in northern Sri Lanka.

Such human rights abuses should trigger an arms embargo under the E.U. Code of Conduct on Arms Exports. According to that code, member states shouldn’t export arms if there is a “clear risk that the proposed export might be used for internal repression.” The code did not become binding until 2008 and seems to have been widely ignored in the case of Sri Lanka. Bulgaria, the Czech Republic, Slovakia, the UK, France, Italy, Lithuania, the Netherlands and Poland haveall exported arms to Sri Lanka.

The U.S. has an arms embargo in place against Sri Lanka. That embargo provides an exception only for, on a case-by-case basis, “technical data or equipment made available for the limited purposes of maritime and air surveillance and communications.”

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