Archive for the ‘DDTC’ Category


May

23

Vietnam Arms Embargo Lifted (More or Less)


Posted by at 5:07 pm on May 23, 2016
Category: Arms ExportDDTCVietnam

Saigon Morin hotel (Hue, Vietnam 2015) by Paul Arps [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/C2rm6w [cropped and color corrected]During a press conference today in Hanoi, President Obama announced the lifting of the arms embargo against Vietnam. Although he stated that the action had nothing to do with China, U.S. officials have noted before that the idea was to help Vietnam counter threats from the PRC in the South China Sea. There has also been speculation that Vietnam would, in return, provide access to Cam Ranh Bay and its deepwater port.

Of course, attentive readers will remember that back in November 2014 the embargo was lifted to permit exports to Vietnam of non-lethal defense articles and lethal weapons “to enhance maritime security capabilities and domain awareness.” Applications for such exports were considered on a case-by-case basis. As a result of today’s action, this limitation on lethal weapon exports to Vietnam has been removed.

DDTC scrambled to get something up on its website, where this notice now appears:

Industry Notice: Change in Policy on Exports of Munitions to Vietnam (05.23.16)

Pursuant to a decision made by the Secretary of State and effective immediately, the Department of State’s policy prohibiting the sale or transfer of lethal weapons to Vietnam, including restrictions on exports to and imports from Vietnam for arms and related materiel, has been terminated. Consequently, in accordance with the Arms Export Control Act, the Directorate of Defense Trade Controls (DDTC) will review on case-by-case basis applications for licenses to export or temporarily import defense articles and defense services to or from Vietnam under the International Traffic in Arms Regulations (ITAR). DDTC will soon publish a rule in the Federal Register to implement a conforming change to ITAR §126.1.

Since the provisions in section 126.1 refer to a licensing policy, there seems to be no reason why DDTC can’t change the license policy first and clean up the regulations later. After all, the Vietnam subsection of 126.1 starts with “[i]t is the policy of the United States to deny” licenses for exports to Vietnam. So, if an exporter applies for and receives a license, there won’t be any issue of violating the unchanged regulation.

Things, however, are not so simple for the absolute prohibition in section 126.1(b), which provides:

A defense article licensed or otherwise authorized for export, temporary import, reexport, or retransfer under this subchapter may not be shipped on a vessel, aircraft, spacecraft, or other means of conveyance that is owned by, operated by, leased to, or leased from any of the proscribed countries, areas, or other persons referred to in this section.

That prohibition will remain in place, forbidding shipment on Vietnamese vessels of licensed defense articles, until whenever (likely in a few years) DDTC gets around to amending 126.1 to reflect today’s action.

Photo Credit: Saigon Morin hotel (Hue, Vietnam 2015) by Paul Arps [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/C2rm6w [cropped and color corrected]. Copyright Paul Arps 2015.

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Copyright © 2016 Clif Burns. All Rights Reserved.
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Feb

23

Gun Laundering Scheme Takes Defendant to the Cleaners


Posted by at 7:06 pm on February 23, 2016
Category: Arms ExportCriminal PenaltiesDDTC

Washing Machine or your life by Alexander von Halem [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/aeNmsj [cropped]Richmond Attah, a resident of Charlotte, North Carolina, was indicted last week for exporting 27 handguns and 3500 rounds of ammunition without the required license from the Directorate of Defense Trade Controls. The guns and ammo, which were hidden in a washing machine, a dryer and a barrel, were on their way to Ghana before being discovered by U.S. customs officials in Savannah, Georgia.

As readers of this blog undoubtedly know, a criminal export conviction requires proof that the defendant knew that he or she was violating the law in connection with the unlicensed export. Given the confusing welter of applicable regulations, and the uncertain export classification of many items, this can often be a difficult task. The challenge for the defense in this case will be explaining exactly why, if true, 27 handguns were put into a washer and dryer bound for Ghana and why this is not fairly conclusive proof that Mr. Attah knew that the exports were illegal. Perhaps the explanation will be that the intended recipient demanded that the weapons be “clean” and Mr. Attah did not completely understand what this meant.

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Copyright © 2016 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Jan

8

Hellfire in Cuba; Brimstone at DDTC


Posted by at 9:04 am on January 8, 2016
Category: Arms ExportCuba SanctionsDDTC

Sailor lower [sic] a Hellfire missile into it's case by Official U.S. Navy Page via Flickr https://flic.kr/p/dpaBVh [Public Domain - Work of U.S. Government]Oops. Somebody accidentally sent a Hellfire missile to Cuba, and Cuba doesn’t want to give it back. According to an article (subscription required) in the Wall Street Journal, a Hellfire missile that was legally exported by Lockheed Martin to Rota, Spain for NATO exercises, got sent by a freight forwarder (or spy or crook) to Cuba after the exercises were over instead of back to Lockheed Martin in Florida where it was supposed to go. Apparently the freight forwarder in Madrid, which was supposed to put the missile on a truck headed to Frankfurt where the missile would catch a flight back to Florida put the missile on a truck headed to Charles de Gaulle outside Paris where Air France obligingly put the missile on a flight to Cuba. And now there’s hellfire to pay.

A State Department official interviewed by the Journal said that “many” of the 1500 voluntary disclosures filed each year involved mis-shipments, although the precise number is not tracked. The official added:

Mis-shipments happen all the time because of the amount and volume of the defense trade.

The kicker in all this, however, is this:

If it turns out that the Hellfire was lost because of human error, the criminal probe would end and the State Department would have to determine whether to pursue a settlement with Lockheed Martin over the incident.

This is, of course, completely ridiculous. Granted that there is strict liability by the exporter for export violations, that does not mean (in any rational universe outside DC) that Lockheed has committed a violation in the first place if someone other than Lockheed, for whatever reason and without the fault of knowledge of Lockheed, put the defense article on the wrong flight. And particularly where this was done by Air France, no less, which regularly sends ordinary baggage bound for one place to Tahiti or some other distant former French colony. And let me remind DDTC that this item would have gone out under a DSP-73 on which every single freight forwarder and intermediate consignee who touched the missile was disclosed to and approved by DDTC. Maybe DDTC should be fined for approving the freight forwarder or intermediate consignee responsible for this screw-up.

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Copyright © 2016 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Dec

22

An Indictment That Doesn’t Add Up


Posted by at 9:23 pm on December 22, 2015
Category: Arms ExportCriminal PenaltiesDDTC

M16 Disconnecter via http://www.brownells.com/rifle-parts/triggers-parts/disconnector-parts/disconnectors/m16-disconnectors-prod41727.aspx [Fair Use]The recent indictment of Brian Thomas Platt, a federally-registered firearms manufacturer, makes me wonder whether there is so little crime in Maryland that prosecutors have the time to indict an individual for exporting a handful of rifle parts without a license, particularly where at least one of the exports arguably qualified for the license exemption for exports of firearms parts with a wholesale value less than $100.  Worse the indictment doesn’t even allege the required element of scienter in an Arms Export Control Act prosecution, namely that the defendant knew that the exports were in violation of law.    The absence of a scienter allegation is significant given that the case is likely to turn on the wholesale value of the parts exported, another crucial fact left out of the oddly and amateurishly drafted indictment.

Three exports are at issue.  The second involved M-16 parts: three selectors, disconnectors, auto sear assemblies and hammers.  The Brownells site gives the retail value of the items as $32.37 for the selectors, $17.97 for the disconnectors (pictured above), $29.97 for the sear assemblies and $66.90 for the hammers. That’s $147.21 retail. It is not unreasonable to assume that the wholesale price of these items is under $100, and the exemption in section 123.17(a) of the ITAR is for exports where the wholesale price is $100 or less.

The remaining exports include one rifle barrel (which is not covered by the exemption in section 123.17) and another export of two Uzi tops and a trigger assembly, also with an apparent value that may well be under the $100 limit. And, of course, the indictment doesn’t bother to allege the value of the shipments or that Platt knew that the parts exceeded the $100 value or that he knew that the exports were illegal. Indeed, given that licenses probably could have been easily obtained for these parts, given the low value (and profits involved) for these parts, and given Platt’s status as a licensed firearm manufacturers, it seems highly unlikely that he knew these exports were illegal.

This appears to be a classic case for a civil penalty. No knowledge or scienter is required for a civil penalty. If Platt was mistaken about the value of the parts, he could still suffer a significant fine. Here, however, for a handful of cheap rifle parts that may or may not have required a license, the prosecutors want to send Platt to jail for 60 years and, in the now inevitable forfeiture allegations, take away his house too. What a ridiculous waste of taxpayer money and prosecutorial resources.

 

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Copyright © 2015 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Dec

21

Look Under Your Tree for a Gift From DDTC. Ho Ho Ho!


Posted by at 8:53 pm on December 21, 2015
Category: CBPDDTC

State Department by Josh [CC-BY-SA-2.0 (https://creativecommons.org/licenses/by-nd/2.0/)], via Flickr https://www.flickr.com/photos/ncindc/2838284991 [cropped]If you’ve had outbound goods seized because a certain big name shipping company filed your AES on a shipment before you lodged the license with Customs, raise your hand. I thought so. A bunch of you have had that happen.

And I see a number of you mumbling and grousing that this high-profile shipping company, after learning of the seizure, ran out of the room like a scalded dog, leaving you with the pleasure of paying off Customs an absurd amount to get your goods released (after, on average, 37.245 years). When your lawyers wrote the company, it sent back a note saying that under your contract with them, you had absolved them from all liability, even if they opened up your package, substituted weapons of mass destruction, exported them and you were later, as a result, criminally indicted and sentenced to  13 years in jail.

Well, Merry Christmas. Just days before Santa dispenses his gifts to all children (except U.S. children because of his continued insistence on providing gifts to Cuban children), the State Department has given you the biggest gift of all. Effective immediately, you no longer have to lodge DDTC export licenses. This is possibly the best news since Disney announced that J.J. Abrams would direct the latest installment in the Star Wars franchise.

The notice of the elimination of this requirement appears on the front page of the DDTC site today (and, apparently nowhere else, so that if DDTC changes it mind, it can delete the notice and take the gift back). This Christmas present was not entirely unexpected because, as the web notice states, DDTC, having finally discovered how computers work, has been sending licensing data daily to Customs thus effectively ending the need for exporters to hand off a dead tree copy of the license to the Pony Express for delivery to your closest Customs port.

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Copyright © 2015 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)