Comments on: Irish Company Indicted for Exports to Iran http://www.exportlawblog.com/archives/479 Latest News on DDTC, BIS, OFAC, and other export law matters Sat, 13 Mar 2010 17:43:29 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Pat B. http://www.exportlawblog.com/archives/479/comment-page-1#comment-22135 Pat B. Thu, 26 Mar 2009 21:22:17 +0000 http://www.exportlawblog.com/?p=479#comment-22135 At the risk of offending my fellow Patricks, I agree with MK that the US government routinely claims jurisdiction over a number of extraterritorial matters whose only nexus to the US is the presence of US-origin goods. I also agree with Hillbilly that this position remains unsettled generally as a matter of international law. But I think it's worth clarifying that jurisdiction in this particular case need not rest on so narrow a foundation. The DOJ's press release states that the defendants had numerous contacts with several US companies to arrange for the helicopter equipment exports in question. The defendants are also charged with causing the payment of funds into US banks. This conduct, much of which apparently involved the furnishing of false information to US parties, would likely rise to a level that justifies not only the assertion of personal jurisdiction over the defendants by US courts, but also the assertion of proscriptive jurisdiction over their actions--at a minimum the specific actions relating to the US companies and banks. Even though the defendants are foreign parties alleged to have diverted goods to Iran, this isn't one of those controversial cases of extraterritorial enforcement of US law turning solely on the presense of US goods. The defendants are charged with having done bad stuff in the US involving US companies and US banks. At the risk of offending my fellow Patricks, I agree with MK that the US government routinely claims jurisdiction over a number of extraterritorial matters whose only nexus to the US is the presence of US-origin goods. I also agree with Hillbilly that this position remains unsettled generally as a matter of international law. But I think it’s worth clarifying that jurisdiction in this particular case need not rest on so narrow a foundation.

The DOJ’s press release states that the defendants had numerous contacts with several US companies to arrange for the helicopter equipment exports in question. The defendants are also charged with causing the payment of funds into US banks. This conduct, much of which apparently involved the furnishing of false information to US parties, would likely rise to a level that justifies not only the assertion of personal jurisdiction over the defendants by US courts, but also the assertion of proscriptive jurisdiction over their actions–at a minimum the specific actions relating to the US companies and banks. Even though the defendants are foreign parties alleged to have diverted goods to Iran, this isn’t one of those controversial cases of extraterritorial enforcement of US law turning solely on the presense of US goods. The defendants are charged with having done bad stuff in the US involving US companies and US banks.

]]> By: Hillbilly http://www.exportlawblog.com/archives/479/comment-page-1#comment-22133 Hillbilly Thu, 26 Mar 2009 16:51:55 +0000 http://www.exportlawblog.com/?p=479#comment-22133 MK: Actually, most other countries disagree that the United States has the right to control technology or products once they are lawfully outside the United States. US assertion of "extraterritorial jurisdiction" has been controversial since the beginning of the Cold War (prior to the Cold War, the US never asserted peacetime export controls beyond that necessary to fulfill its obligations under international law as a neutral state vis-a-vis belligerants). The Siberian Gas Pipeline controversy in the 80s left a bad feeling with many allied trading partners and many adopted "blocking laws" to prevent their citizens from complying with the asserted jutid. In fact, in 1996 the EU adopted Regulation 96/2771 which makes cooperation with 3rd state (i.e., U.S.) assertion of extraterritorial jurisdiction unlawful. The EU Commission specifically identified the US embargoes of Cuba and Iran, inlusive of the entire Iran Libya Sanctions Act (which since has been revised to apply only to Iran). McGuin could invoke 96/2271 to prevent any cooperation with the US government by not only the Government of Ireland, but also any private persons (both companies and individuals who might be witnesses or furnish evidence), unless the export would have been regulated by Ireland/EU. So the threshold question is whether these particular critters are Wassenaar Munitions List items or EU Dual USE list items which would have required a license from the Irish or other EU government, or were they just commercial aircraft parts that are not subject to controls in the EU. If its the latter, then McQuin can rest easier, but sometimes the EU countries will extradite not on the export control violation but on fraud charges associated with any misrepresentations made to Customs or other parties in connection with the exports. In such cases the sending country usually requires the US to agree to try the accused only on the fraud charge but not the export violation. MK: Actually, most other countries disagree that the United States has the right to control technology or products once they are lawfully outside the United States. US assertion of “extraterritorial jurisdiction” has been controversial since the beginning of the Cold War (prior to the Cold War, the US never asserted peacetime export controls beyond that necessary to fulfill its obligations under international law as a neutral state vis-a-vis belligerants). The Siberian Gas Pipeline controversy in the 80s left a bad feeling with many allied trading partners and many adopted “blocking laws” to prevent their citizens from complying with the asserted jutid. In fact, in 1996 the EU adopted Regulation 96/2771 which makes cooperation with 3rd state (i.e., U.S.) assertion of extraterritorial jurisdiction unlawful. The EU Commission specifically identified the US embargoes of Cuba and Iran, inlusive of the entire Iran Libya Sanctions Act (which since has been revised to apply only to Iran). McGuin could invoke 96/2271 to prevent any cooperation with the US government by not only the Government of Ireland, but also any private persons (both companies and individuals who might be witnesses or furnish evidence), unless the export would have been regulated by Ireland/EU. So the threshold question is whether these particular critters are Wassenaar Munitions List items or EU Dual USE list items which would have required a license from the Irish or other EU government, or were they just commercial aircraft parts that are not subject to controls in the EU. If its the latter, then McQuin can rest easier, but sometimes the EU countries will extradite not on the export control violation but on fraud charges associated with any misrepresentations made to Customs or other parties in connection with the exports. In such cases the sending country usually requires the US to agree to try the accused only on the fraud charge but not the export violation.

]]> By: MK http://www.exportlawblog.com/archives/479/comment-page-1#comment-22126 MK Thu, 26 Mar 2009 05:16:05 +0000 http://www.exportlawblog.com/?p=479#comment-22126 The answer to your question is pretty far....especially in these situations because Arms Trading is an international business. Let me explain The International Emergency Economic Powers Act (IEEPA) to you because you do not undertand the law....The United States is simply enforcing its laws, not forcing its laws on Ireland. IEEPA prohibits U.S. Persons from doing business with Iran and prohibits U.S. Technology from being traded or sold to Iran. It is completely within the U.S. Government's right to regulate where its technology goes. If these guys want to sell Irish technology to Iran they can go right ahead all day and the U.S. will not interfere. These guys clearly knew they were violating U.S. laws because they went to painstaking efforts to hide the end user of the engines and had them trans-shipped through Malaysia. Bottom line...if you are an American doing business with Iran or a foreigner selling U.S. goods to Iran, you are within the United States' legal jurisdiction. The answer to your question is pretty far….especially in these situations because Arms Trading is an international business.

Let me explain The International Emergency Economic Powers Act (IEEPA) to you because you do not undertand the law….The United States is simply enforcing its laws, not forcing its laws on Ireland. IEEPA prohibits U.S. Persons from doing business with Iran and prohibits U.S. Technology from being traded or sold to Iran. It is completely within the U.S. Government’s right to regulate where its technology goes. If these guys want to sell Irish technology to Iran they can go right ahead all day and the U.S. will not interfere. These guys clearly knew they were violating U.S. laws because they went to painstaking efforts to hide the end user of the engines and had them trans-shipped through Malaysia.

Bottom line…if you are an American doing business with Iran or a foreigner selling U.S. goods to Iran, you are within the United States’ legal jurisdiction.

]]> By: paddy1974 http://www.exportlawblog.com/archives/479/comment-page-1#comment-22121 paddy1974 Wed, 25 Mar 2009 22:10:32 +0000 http://www.exportlawblog.com/?p=479#comment-22121 How far does the long arm of the US law extend? The US can legislate however they please, but they cannot extend this law to foreign shores. Surely there is no hope that these 3 men will be extradited. They aren't American, they are operating in a different jurisdiction and co-operating with another country. Are the US legislating for Ireland now? Did Ireland wake up as the 52nd state? How does this work? The US defines its enemies and people operating on the other side of the world risk imprisonment because the only observe the laws of their own nation. This is madness! In addition we all know that the US has a history of paranoid, over-reacting when it comes to Arab countries. What was their flimsy excuse for occupying Iraq? WMD that didn't exist! Countless dead, continued civil unrest, no end in sight. Following 9/11 while the US govt did not have sufficient evidence to pursue a case either in a criminal OR civil suit, BUT they used it as grounds to invade Afghanistan. Countless civilians dead. Another Arab country in turmoil. Are the US govt bolstering another 'flimsy' file to justify yet another unlawful occupation? What's the real story here? How far does the long arm of the US law extend?

The US can legislate however they please, but they cannot extend this law to foreign shores. Surely there is no hope that these 3 men will be extradited. They aren’t American, they are operating in a different jurisdiction and co-operating with another country.

Are the US legislating for Ireland now? Did Ireland wake up as the 52nd state? How does this work? The US defines its enemies and people operating on the other side of the world risk imprisonment because the only observe the laws of their own nation. This is madness!

In addition we all know that the US has a history of paranoid, over-reacting when it comes to Arab countries. What was their flimsy excuse for occupying Iraq? WMD that didn’t exist! Countless dead, continued civil unrest, no end in sight.

Following 9/11 while the US govt did not have sufficient evidence to pursue a case either in a criminal OR civil suit, BUT they used it as grounds to invade Afghanistan. Countless civilians dead. Another Arab country in turmoil.

Are the US govt bolstering another ‘flimsy’ file to justify yet another unlawful occupation? What’s the real story here?

]]> By: Hillbilly http://www.exportlawblog.com/archives/479/comment-page-1#comment-22106 Hillbilly Wed, 25 Mar 2009 17:57:57 +0000 http://www.exportlawblog.com/?p=479#comment-22106 The Varco case is reminescent of the 1995 case of Schnitzer Steel v. Dept. of the Navy, in which an Oregon scrap company that bid on the ex-USS Bennington (a WWII era Essex-class aircraft carrier) challenged the Dept. of Commerce CCAT determination that the hulk of the carrier (i.e., the hull minus the tower and several tons of wire coated with toxic chemicals and even more tons of asbestos)was scrap that was subject to the EAR and could be exported to India G-DEST rather than a defense article subject to ITAR; and, demanded that the government force the successful bidder, Resource Recovery International, to return the carrier. Although the DC District court held that the case was effectively moot because the hulk of the carrier was already being torn down in India and the plaintiff had not included the exporter as a party, in its opinion the court also stated that the AECA created no private right of action. [The rest of story: After losing in court, the plaintiff had enough political clout to get a Senator and a tame paid conservative think-tank stirred up and forced investigation by both Customs and OEE, but both investigations were concluded without any enforcement action whatsoever.] The Varco case is reminescent of the 1995 case of Schnitzer Steel v. Dept. of the Navy, in which an Oregon scrap company that bid on the ex-USS Bennington (a WWII era Essex-class aircraft carrier) challenged the Dept. of Commerce CCAT determination that the hulk of the carrier (i.e., the hull minus the tower and several tons of wire coated with toxic chemicals and even more tons of asbestos)was scrap that was subject to the EAR and could be exported to India G-DEST rather than a defense article subject to ITAR; and, demanded that the government force the successful bidder, Resource Recovery International, to return the carrier. Although the DC District court held that the case was effectively moot because the hulk of the carrier was already being torn down in India and the plaintiff had not included the exporter as a party, in its opinion the court also stated that the AECA created no private right of action. [The rest of story: After losing in court, the plaintiff had enough political clout to get a Senator and a tame paid conservative think-tank stirred up and forced investigation by both Customs and OEE, but both investigations were concluded without any enforcement action whatsoever.]

]]> By: Clif Burns http://www.exportlawblog.com/archives/479/comment-page-1#comment-22102 Clif Burns Wed, 25 Mar 2009 16:32:51 +0000 http://www.exportlawblog.com/?p=479#comment-22102 @Craig. I did see the Varco opinion and haven't decided whether to say anything on it or not because it would involve delving into some thorny issues of federal jurisdiction law. That being said, the prospect of a state court trying to determine whether Varco's employer was violating the ITAR gives me more than a little pause. @Craig. I did see the Varco opinion and haven’t decided whether to say anything on it or not because it would involve delving into some thorny issues of federal jurisdiction law. That being said, the prospect of a state court trying to determine whether Varco’s employer was violating the ITAR gives me more than a little pause.

]]> By: Clif Burns http://www.exportlawblog.com/archives/479/comment-page-1#comment-22101 Clif Burns Wed, 25 Mar 2009 16:29:35 +0000 http://www.exportlawblog.com/?p=479#comment-22101 Needless to say, I don't agree with "Pat Fenlon's" comment. Also, if he'd clicked through to the docket sheet, he would see that Mr. McGuinn plead guilty to the charges. And, if he'd read my post, he would have seen Mr. McGuinn's sentence entered after that plea. But Mr. Fenlon was obviously more concerned about ranting about the U.S. than getting the facts straight. Needless to say, I don’t agree with “Pat Fenlon’s” comment. Also, if he’d clicked through to the docket sheet, he would see that Mr. McGuinn plead guilty to the charges. And, if he’d read my post, he would have seen Mr. McGuinn’s sentence entered after that plea. But Mr. Fenlon was obviously more concerned about ranting about the U.S. than getting the facts straight.

]]> By: Pat Fenlon http://www.exportlawblog.com/archives/479/comment-page-1#comment-22100 Pat Fenlon Wed, 25 Mar 2009 16:12:04 +0000 http://www.exportlawblog.com/?p=479#comment-22100 I dont think the Irish government should extradite these 3 men to a corrupt government like the US.They have the blood of many nations on the ir hands since the war on terror began,they themselves are far bigger criminals than thses businessmen.These men are innoncent until proven guilty and as regards to the charges brought againist Mr.McGuinn in 1996,he stood trial for them charges and was proven innocent.I think since this embrassment for the American government they have been waiting for the opportunity to convict this man.We all know the stunts that this government has pulled off in the past. I dont think the Irish government should extradite these 3 men to a corrupt government like the US.They have the blood of many nations on the ir hands since the war on terror began,they themselves are far bigger criminals than thses businessmen.These men are innoncent until proven guilty and as regards to the charges brought againist Mr.McGuinn in 1996,he stood trial for them charges and was proven innocent.I think since this embrassment for the American government they have been waiting for the opportunity to convict this man.We all know the stunts that this government has pulled off in the past.

]]> By: Craig http://www.exportlawblog.com/archives/479/comment-page-1#comment-22099 Craig Wed, 25 Mar 2009 15:18:31 +0000 http://www.exportlawblog.com/?p=479#comment-22099 Cliff, love the blog, always good info. I see you didn't comment on this recent article, check it out. www.mdd.uscourts.gov/Opinions/Opinions/Varco0317.pdf Craig Cliff, love the blog, always good info.

I see you didn’t comment on this recent article, check it out.

http://www.mdd.uscourts.gov/Opinions/Opinions/Varco0317.pdf

Craig

]]> By: Clif Burns http://www.exportlawblog.com/archives/479/comment-page-1#comment-22097 Clif Burns Wed, 25 Mar 2009 11:30:08 +0000 http://www.exportlawblog.com/?p=479#comment-22097 The three individual defendants are still in Ireland and the U.S. says that it will seek extradition. Unless the export of the helicopter engines from Ireland to Iran was illegal, getting an Irish court to grant extradition will be an uphill battle. (An my typo -- "Iraq" for "Iran" -- has been fixed in the body of the post. Thanks for catching it.) The three individual defendants are still in Ireland and the U.S. says that it will seek extradition. Unless the export of the helicopter engines from Ireland to Iran was illegal, getting an Irish court to grant extradition will be an uphill battle.

(An my typo — “Iraq” for “Iran” — has been fixed in the body of the post. Thanks for catching it.)

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