Archive for the ‘DDTC’ Category


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.
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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.
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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.
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Oct

6

That Was Then; This is Now: DDTC’s Shifting Definition of “Public Domain”


Posted by at 10:49 pm on October 6, 2015
Category: DDTC

Gagged by Clif Burns via Flickr https://flic.kr/p/povfuw

As discussed here in a previous post, the proposed definition of “public domain” by the Directorate of Defense Trade Controls (“DDTC”) has a Catch-22. Information that is in the “public domain,” i.e. information that has been published on the Internet or made available in a public library, is exempted from the definition of technical data in the ITAR and can be freely exported without license. Then there is the Catch-22, which is more like a Catch-22,000,000: except when the information has been released without the prior approval of DDTC or three other enumerated government agencies.

The idea that technical data (like, say, a picture of a B-52 bomber or a video explaining the bullet manufacturing process) is not public domain until the government explicitly authorizes its release has been, needless to say, a disturbing notion to many. DDTC tried to tamp down the outrage by saying this in connection with the proposed rule:

The requirements of paragraph (b) are not new. Rather, they are a more explicit statement of the ITAR’s requirement that one must seek and receive a license or other authorization from the Department or other cognizant U.S. government authority to release ITAR controlled ‘‘technical data,’’ as defined in § 120.10.

So they say now, but DDTC had something very different to say about the definition of “public domain” in United States v. Bernstein. That case dates back to 1996 when encryption items were on the USML. An encryption developer brought suit against DDTC (then ODTC) and the State Department claiming that export controls on encryption products violated his First Amendment rights by foreclosing him from discussing in public the technical aspects of his encryption software.

Nonsense, DDTC replied. To begin with, there were many exceptions, like the public domain exception, which permitted plaintiff Bernstein and others like him to chat away to their heart’s content. Problem is Bernstein called up Charles Ray at DDTC and posed a hypothetical of putting materials containing technical data in a public library without government approval. Ray told him that could be an export violation. So Bernstein argued to the court that the public domain exception was not a significant exception because technical data could never be in the public domain unless the Government approved the release

Here’s where it gets really good. DDTC, in a pleading filed with the court, called that an “unreasonable” interpretation of the public domain exception:

Plaintiff’s attack on the “public domain” exemption is also meritless. That provision contains several specific exceptions as to what is controlled as technical that any ordinary person can understand — information in bookstores, newsstands, or disclosed at conferences. Plaintiff sees a “Catch-22” “lurking” in the provision that, unless something is already published, it is subject to export controls. He would construe the definition to mean, in other words, that nothing can be published without the government’s approval. Not only is this wrong as a factual matter, […] it is by far the most un-reasonable interpretation of the provision, one that people of ordinary intelligence are least likely to assume is the case.

Oops.

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