Archive for the ‘DDTC’ Category


Apr

11

Un Pour Deux, Deux Pour Un! (An ECR Swashbuckler)


Posted by at 11:26 pm on April 11, 2017
Category: DDTCExport Reform

Brian J. Nilsson via https://www.state.gov/r/pa/ei/biog/bureau/250013.htm [Public Domain]
ABOVE: Brian J. Nilsson

Many readers were likely wondering what impact the Trump Administration’s new one-for-two executive order would have on export control reform. As you probably know, that is the order that says for every new rule adopted by a federal agency two other rules must be thrown out — sort of like a closet cleaning rule: for every new shirt I buy, two old ones need to be donated or thrown out.

Well, never fear. At the last DTAG meeting, Deputy Assistant Secretary of State for Defense Trade Controls Brian H. Nilsson said that this new rule would somehow not apply to DDTC rules and that the agency was moving ahead on export control reform unencumbered by the order, or at least that’s being reported by those who attended the meeting. As much as I would like to believe this, particularly inasmuch as Categories I, II and III of the United States Munitions List have still not gone through the export control reform process, I am filing Deputy Assistant Secretary’s statement under “wishful thinking”(if not under “alternative facts”). The Executive Order itself lists no exemptions whatsoever. Now that doesn’t mean that some time in the future someone might realize how silly such a rule is and put another Executive Order with some exemptions to the one-for-two order in front of the President for him to sign.

But until that happens, DDTC can’t amend any part of the USML without slashing two rules for each one added. Oh, and by the way, is anyone else wondering how the counting of rules is done here? If section 121.1 is amended to provide a new version of, say, Category I, II and III, what exactly has to be sacrificed on the altar of the executive order? After all only subsection 121.1(b)(2) of the rule set forth 121.1 would be altered. Does DDTC have to ditch two entire rules, like, say, sections 129.3 and 130.1 (my nominees  for jettisoning) or can it get away with ditching two subsections, such as  128.7(a)(3) and 123.22(c)(1), both of which no one would ever miss?

UPDATE:  As pointed out by commenter TJ below, the Executive Order does indeed exempt “regulations issued with respect to a military, national security, or foreign affairs function of the United States.”  So ECR is safe for the moment, although my query as to how rules are counted for purposes of the one-for-two rule remains valid in other contexts.

 

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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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(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.
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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.)

Mar

1

Assassination In Malaysia Leads To Calls to Redesignate DPRK As A Terrorist State


Posted by at 9:14 pm on March 1, 2017
Category: BISDDTCNorth Korea Sanctions

Kim Jong Un Smoking via KCNA [Fair Use]The assassination by the Norks of Kim Jong Un’s brother in a Malaysian airport with the help of gullible stooges and some VX nerve agent has reignited the debate as to whether the State Department should redesignate the DPRK as a state sponsor of terrorism. The DPRK was first put in the list after it bombed a Korean Air Flight in 1987, killing 115 people. The country was removed in 2008 in return for shutting down its plutonium plant and permitting inspections.

In order to designate a country as a state sponsor of terrorism, a determination must be made that the country “repeatedly provided support for acts of international terrorism.” See, e.g., section 6(j) of the (zombie) Export Administration Act. None of the statutes that invoke that phrase define “acts of international terrorism,” although section 40(d) of the Arms Export Control Act states that the term includes activities that “aid or abet the efforts of an individual or group to use … chemical, biological, or radiological weapons.” I suppose that might cover the murder of an individual with a chemical weapon in an airport, although terrorism seems more readily to mean an act that indiscriminately targets multiple civilians in order to instill fear in a population or community.

Advocates of redesignation have argued that the cyber attack on Sony (in connection with its distribution of the hilarious and decidedly anti-Nork film The Interview) and other assassinations abroad demonstrate repeated acts of terrorism. But again, it’s hard to argue that these acts, while reprehensible, are designed to instill fear in a community.

In any event, the redesignation would be most symbolic. Once designated, U.S. law prohibits arms sales, which are already prohibited. Licenses would be required for certain specified goods, but section 746.4 of the EAR already requires licenses for all items subject to the EAR other than food and medicine. Being designated as a state sponsor of terrorism means that under the Trade Sanctions and Export Reform Act of 2000 a one-year license is required for exports to that country of agricultural commodities, medicine or medical devices, but North Korea is explicitly exempted from this by section 7205(a)(2)

Given that the redesignation of the loathsome Norks would be mostly symbolic, it seems to be a bad idea to torture the definition of “international terrorism” to include computer hacking and individual murders to get there.

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