Author Archive


Mar

24

About That Laptop Ban


Posted by at 5:31 pm on March 24, 2017
Category: BISDDTC

Qatar Airways - Airbus A380 by Glynn Lowe Photoworks [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/mDLaXv [cropped and processed]The United States and the United Kingdom just announced that laptops (and other electronic devices larger than a cellphone) would have to be checked as luggage and could not be carried by passengers into cabins when traveling on non-stop flights from certain destinations in the Middle East and North Africa, including Istanbul, Cairo and Doha, among others. I’m sure that some readers wondered how they were going to work on such flights while another (possibly much larger) group wondered how they would watch “Batman v. Superman” or “Bad Santa 2” during their flights home.

Of course, I wondered whether you would be arrested when you landed if you put in the hold a laptop with export controlled technical data, technology or software. That’s because I’m always looking out for my readers.

The issue, at least as far as BIS is concerned, is whether License Exception TMP or BAG still applies if you separate yourself from the laptop with controlled technology or software at check-in. TMP covers company laptops and BAG will cover personal laptops owned by the passenger.

Under section 740.9(a)(1) of License Exception TMP, items that are exported as “tools of the trade,” which includes software and hardware, “must remain under the “effective control” of the exporter or the exporter’s employee.” I would take this to mean that if the laptop or software on it is controlled for the destination from which the employee is returning, it may not be checked. This is somewhat odd since that same provision allows that laptop and software to be shipped “unaccompanied” within one month prior to the employee’s arrival in the foreign country.

On the other hand,  TMP does not impose the “effective control” on technology on a laptop that would require a license for the traveler’s destination. Instead, section 740.9(a)(3) speaks only of access controls such as a password for the device on which the technology is controlled.

License Exception BAG, under section 740.14(c)(1), only applies to items “owned by the individuals (or by members of their immediate families) … on the dates they depart from the United States.” So this exception would only apply to personally-owned laptops and personally-owned software if they are controlled to the traveler’s destination. Oddly, license exception BAG does not have the “effective control” limitation, so personal laptops could be checked consistently with the license exception even with EAR-controlled software. Additionally, BAG permits export of technology on the laptop, in the hold or the cabin, if there are access controls such as a password.

The ITAR deals with this travel issue in section 125.4(b)(9). As with EAR-controlled technical data, a laptop with ITAR-controlled technical data can be checked and stored in the hold as long as the laptop is protected with a password.

So, the only real issue prohibition under the ITAR or EAR against checking a laptop is when the laptop is not the personal property of the traveler and it contains software that is controlled under the EAR to the traveler’s destination. If there is ITAR-controlled technical data or EAR-controlled technology, a password on the device is sufficient.

Pardon me for a little skepticism here but it seems to me that this electronics ban has more to do with limiting foreign carrier competition in the United States than it does security. To begin with, it covers devices such as Kindles and cameras that are not much different from the size of a cellphone and which certainly do not seem to be more efficient threat vectors. More significantly, a person bent on terror using one of these devices merely needs to change his flight plan to include a stopover (where he won’t be screened again) before continuing to the United States — which is exactly what most travelers will do to avoid being separated from their expensive electronics.

Photo Credit: Mojito by Sami Keinänen [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/4GyGSs [cropped]. Copyright 20xx Sami Keinanen

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Copyright © 2017 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Mar

17

Chocolate Bunnies, Marshmallow Peeps and an Easter Surprise from BIS


Posted by at 11:12 am on March 17, 2017
Category: BISChinaHong Kong

Hong Kong International Commerce Center by Bernard Spragg [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/q9tJLV [cropped]The Bureau of Industry and Security is playing Easter Bunny and has left a little Easter egg in the Easter baskets of anyone planning to export certain items to Hong Kong beginning April 19, or two days after Easter Sunday. The Easter egg, er, new rule provides that any export to Hong Kong of an item controlled for NS, MT, NP Column 1, or CB reasons needs an import license from Hong Kong or a statement from Hong Kong that a license is not necessary. These items are not required as part of the BIS license application but must be in the U.S. exporter’s possession before the export is made.

The reason that U.S. exporters need to babysit the compliance by Hong Kong authorities with their own import rules is far from clear. The stated reason for this new rule in the Federal Register notice does not make much sense:

BIS is taking this action to provide greater assurance that U.S. origin items that are subject to the multilateral control regimes noted above will be properly authorized by the United States to their final destination, even when those items first pass through Hong Kong.

Okay, that is what the BIS is licensing process is for and these documents are not even required when applying for the license. So that rationale is, well, not very compelling.

BIS has also published FAQs on the new requirement. These make clear that the requisite documents must be obtained from Hong Kong even if the export is being made pursuant to a license exception.

Who says there are never any surprises in their Easter baskets, just the same old dyed eggs and chocolate bunnies?

Photo Credit: Hong Kong International Commerce Center by Bernard Spragg [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/q9tJLV [cropped]. Copyright 2014 Bernard Spragg

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Copyright © 2017 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Mar

15

Word of the Day: Peloteros


Posted by at 6:04 pm on March 15, 2017
Category: BaseballCuba SanctionsOFAC

Cuba Baseball Stamp [Fair Use]It’s time for our annual Cuba baseball post which each year has been motivated by cold weather, spring training, and anxious anticipation of opening day. And what better subject for this post than the recently concluded trial in Miami in which Bartolo Hernandez, a baseball agent, and Julio Estrada, a baseball trainer, were accused of smuggling Cuban players into the United States and which featured testimony by one of these peleteros about how he ate his fake Haitian passport on his plane trip to the United States. (Insert optional better-than-airline-food joke here.)

One of the key elements of the case is section 515.505 of the Cuban Assets Control Regulation which unblocks Cuban nationals after they have established residency in a country outside Cuba other than the United States. The other element is that an unblocked Cuban in a third country is, under Major League Baseball’s rules, a “free agent” that can negotiate higher salaries; Cubans who come directly to the United States and become unblocked by seeking permanent residence here are eligible to be signed to an MLB team only through the amateur draft system and will not be able to command the astronomical salaries of a free agent.

According to prosecutors, the defendants smuggled the Cubans into third countries and then forged documents that could be used to evidence residency in those countries. The payoff to the defendants was the high commissions (allegedly around $150 million) that they received on the salaries of their free agent clients. The defense claimed that the two defendants did not forge documents and were unaware that the players, desperate to get to the United States, were using forged documents. The jury, however, convicted both men earlier today.

In other baseball news, opening day for the Chicago Cubs is Sunday, April 2, in St. Louis, a town that even the Rams had the good sense to escape.  Go Cubs Go!

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Copyright © 2017 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Mar

13

Ohio Company “Earns” ITAR “Certification”


Posted by at 4:27 pm on March 13, 2017
Category: DDTCITARPart 122

MJM Headquarters via Google Maps [Fair Use]It seems like it has been quite a while since I’ve seen a press release from a company boasting that it had “earned” or “achieved” ITAR “certification.” But MJM Industries obliges with this self-congratulatory press release.

Fairport Harbor, Ohio – MJM Industries, a contract manufacturer of custom over-molded cable and wire harness assemblies, has earned certification for International Traffic in Arms Regulations (ITAR) compliance. This designation will add to their growing portfolio of certificates and compliances such as ISO, WEEE, RoHs, REACH, UL, CSA, FM, MIL, and UL Canadian that verify MJM Industries’ commitment to producing high quality and reliable products.

As I’ve said before many times and will say again, all that an ITAR registration can “verify” is that someone at MJM figured out how to fill out and file a form and that MJM had at one time at least $2250 in its checking account.

But wait! There’s more!

Having the ITAR certification is the key to customer satisfaction.

Indeed it is. That and, oh, I don’t know, a free flashlight (shipping and handling extra) with every order.

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Copyright © 2017 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Mar

8

Did Undercover Agent Give Legal Lecture to Defendant on Export Law or Not?


Posted by at 10:07 am on March 8, 2017
Category: Arms ExportCriminal PenaltiesDDTC

Kolar Rahman Mug Shot
ABOVE: Kolar Rahman

Several law enforcement officials have said to me that what often makes their jobs so easy is that many criminals are several forks short of a kitchen utensil drawer.   With that in mind, we bring you the story of Kolar Rahman Anees Ur Rahman, who, if the criminal complaint is to be believed, was pretty stupid.  But maybe not.  You decide.

Mr. Rahman is an Indian national living in the UAE who just received five years probation in connection with a scheme to ship sniper rifles to Belarus. After an associate of Rahman’s contacted a gun manufacturer in the United States with a request to buy guns for Belarus, a federal undercover agent got in contact with Rahman in the UAE to continue the purchase negotiations. The undercover (or UCA in fedspeak) lured Rahman to Chicago, which was Rahman’s second mistake, the first of course having been trying to ship rifles from the US to Belarus in the first place.

Now what follows as described in the criminal complaint is astonishing, if true:

The UCA reminded RAHMAN that all of the .308 Caliber sniper rifles are export controlled in the U.S. by ITAR and could not be exported to certain countries without a license. The UCA reminded RAHMAN, due to the policy of denial in place by the U.S. government against Belarus, that it was not possible to obtain the required export licenses needed to legally export the .308 Caliber sniper rifles. The UCA explained that in order to export the firearms, they would need to make misrepresentations on the paperwork as to where the rifles would be shipped. RAHMAN informed the UCA he understood and still wanted to continue with their business transaction. The UCA informed RAHMAN he wanted to make sure RAHMAN understood the risks and that they would both go to jail if they were caught illegally exporting the rifles and ammunition. RAHMAN informed the UCA he understood the risk and that he desired to complete their business transaction as planned.

Seriously? This lengthy lecture on the law didn’t set off alarm bells, warning signals, blaring sirens, flashing lights and abject fear in Rahman? What real criminal ever gives a lengthy lecture to his associates about criminal law before embarking on the planned conduct? “Hey, Rufus, ya know robbing banks is illegal, right? And if we carry guns the penalty is increased to 30 to life? If we do this, we can both go to jail for at least thirty years or more. You know that, right? Speak up. I can’t hear ya. Okay, so you are absolutely, positively certain without any equivocation that you still want to rob this bank and you’re doing so of your own free will even though you might wind up in jail for a very long time? Don’t nod, Rufus, I need to hear you say yes.”

The UCA, if he in fact said all this, was making sure he could establish the necessary criminal intent for an export violation. This is critical where an Indian national living in the UAE might not know the ins and outs of U.S. export laws or about the U.S. arms embargo on Belarus. (I bet even a bunch of Americans don’t know about the Belarus embargo.) But you have to wonder why Rahman when (and if) he got this five-minute spiel on U.S. law didn’t run out the door of the hotel room in Chicago and hop on the next flight back to the UAE.

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Copyright © 2017 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)