Comments on: Virginia Company Pleads Guilty to Arms Brokering Charges http://www.exportlawblog.com/archives/1194 Latest News on DDTC, BIS, OFAC, and other export law matters Wed, 08 Sep 2010 03:51:32 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Hillbilly http://www.exportlawblog.com/archives/1194/comment-page-1#comment-92333 Hillbilly Sat, 16 Jan 2010 15:41:43 +0000 http://www.exportlawblog.com/?p=1194#comment-92333 @ Pat: If the implementing regs left out a statutory element, then, at the very least, any indictment that omitted the statutory elements would fail, and the reg would probably be found to be invalid. However, the delegation of rulemaking authority in AECA is broad enough that, if DDTC actually engaged in lawful rulemaking under the APA, DDTC could add qualifying elements in the rule implementing the statute (thus increasing its own burden of production and persuasion). Of course, DDTC falsely and fraudulently claims that all of its activity is exempt from the entire APA under the "foreign affairs function" exemption for rulemaking in 5 USC 553. The 1946 legislative history to the APA compiled by the Judiciary Committee and relied upon by the Supreme Court in other APA cases as a guide to interpretation makes it clear the "foreign affairs function" exemption (emphasis on the word "function") applies only to diplomatic and other government-to-government executive branch activities that do not directly affect the public. The ITAR is the result of a congressional delegation of its plenary constitutional power to regulate foreign commerce, and does directly affect the public, thus DDTC's claim of exemption from the APA under the "foreign affairs function" exemption is a fraud. The same can be said of those portions of the EAR and the OFAC regs that were promulgated without APA rulemaking. The failure to abide by APA rulemaking also make such regs vulnerable under the Regulatory Flexibility Act (5 USC 601 et seq). @ Pat: If the implementing regs left out a statutory element, then, at the very least, any indictment that omitted the statutory elements would fail, and the reg would probably be found to be invalid. However, the delegation of rulemaking authority in AECA is broad enough that, if DDTC actually engaged in lawful rulemaking under the APA, DDTC could add qualifying elements in the rule implementing the statute (thus increasing its own burden of production and persuasion). Of course, DDTC falsely and fraudulently claims that all of its activity is exempt from the entire APA under the “foreign affairs function” exemption for rulemaking in 5 USC 553. The 1946 legislative history to the APA compiled by the Judiciary Committee and relied upon by the Supreme Court in other APA cases as a guide to interpretation makes it clear the “foreign affairs function” exemption (emphasis on the word “function”) applies only to diplomatic and other government-to-government executive branch activities that do not directly affect the public. The ITAR is the result of a congressional delegation of its plenary constitutional power to regulate foreign commerce, and does directly affect the public, thus DDTC’s claim of exemption from the APA under the “foreign affairs function” exemption is a fraud. The same can be said of those portions of the EAR and the OFAC regs that were promulgated without APA rulemaking. The failure to abide by APA rulemaking also make such regs vulnerable under the Regulatory Flexibility Act (5 USC 601 et seq).

]]> By: Pat B. http://www.exportlawblog.com/archives/1194/comment-page-1#comment-92332 Pat B. Fri, 15 Jan 2010 23:22:52 +0000 http://www.exportlawblog.com/?p=1194#comment-92332 One thing--among many--that's always intrigued me about the brokering regime is that key ITAR defintions contain dispositive elements that the AECA doesn't. The "in return for a fee, commission, or other consideration" qualifier at ITAR 129.2(a) simply doesn't exist at 22 U.S.C. 2778(b)(1)(A)(ii). (The same goes for "agent for others"). Query: Whether it's possible to be convicted of a criminal violation of the AECA without having violated the ITAR, if the ITAR require proof of elements (such as consideration) that the AECA doesn't mention. Anyhoo. Assuming ITAR 129.2(a)'s consideration element is required for a criminal conviction, I might go a little farther than MJ. Using what little contract law I remember, I think if I were prosecuting a case in which payment hadn't actually been made, I would likely contend that a promise of future payment is, at the time the promise is made and the agreement reached, "other consideration." But, to echo your central beef, Clif, there's nothing alleging even a promise of payment in the Statement. The consideration element simply isn't given any, um, consideration. One thing–among many–that’s always intrigued me about the brokering regime is that key ITAR defintions contain dispositive elements that the AECA doesn’t. The “in return for a fee, commission, or other consideration” qualifier at ITAR 129.2(a) simply doesn’t exist at 22 U.S.C. 2778(b)(1)(A)(ii). (The same goes for “agent for others”). Query: Whether it’s possible to be convicted of a criminal violation of the AECA without having violated the ITAR, if the ITAR require proof of elements (such as consideration) that the AECA doesn’t mention.

Anyhoo. Assuming ITAR 129.2(a)’s consideration element is required for a criminal conviction, I might go a little farther than MJ. Using what little contract law I remember, I think if I were prosecuting a case in which payment hadn’t actually been made, I would likely contend that a promise of future payment is, at the time the promise is made and the agreement reached, “other consideration.”

But, to echo your central beef, Clif, there’s nothing alleging even a promise of payment in the Statement. The consideration element simply isn’t given any, um, consideration.

]]> By: Hillbilly http://www.exportlawblog.com/archives/1194/comment-page-1#comment-92327 Hillbilly Fri, 15 Jan 2010 18:22:14 +0000 http://www.exportlawblog.com/?p=1194#comment-92327 Amen, Brother Burns. Another episode of AUSAs Gone Wild. Amen, Brother Burns. Another episode of AUSAs Gone Wild.

]]> By: Clif Burns http://www.exportlawblog.com/archives/1194/comment-page-1#comment-92326 Clif Burns Fri, 15 Jan 2010 16:07:07 +0000 http://www.exportlawblog.com/?p=1194#comment-92326 @MJ. That is a possible reading, but this will still need to have been alleged in the Statement of Facts. @MJ. That is a possible reading, but this will still need to have been alleged in the Statement of Facts.

]]> By: MJ http://www.exportlawblog.com/archives/1194/comment-page-1#comment-92325 MJ Fri, 15 Jan 2010 15:12:22 +0000 http://www.exportlawblog.com/?p=1194#comment-92325 An alternate reading might be that negotiating for a fee, commission, or other consideration is enough to support the charge. An alternate reading might be that negotiating for a fee, commission, or other consideration is enough to support the charge.

]]>