Archive for the ‘Entity List’ Category



UMass Lowell Fined For Entity List Violations

Posted by Clif Burns at 4:54 pm on May 20, 2013
Category: BISEntity List

SUPARCO HQ [Fair Use]Back in April the University of Massachusetts at Lowell (the “University”) agreed to pay to the Bureau of Industry and Security (“BIS”) a suspended penalty of $100,000 in connection with its unlicensed export of an atmospheric sensing device, antennae and cables valued at slightly more than $200,000 to Pakistan’s Space and Upper Atmosphere Research Commission (“SUPARCO”). The fine will be waived if the university does not commit any more export violations during a probationary period of two years.

The items at issue were all classified as EAR99. The violation occurred because SUPARCO is on BIS’s Entity List. The licensing policy for SUPARCO has a presumption of approval for EAR99 items, so had the university applied for a license for these exports, it almost certainly would have been granted.

The atmospheric sensing device is likely the basis for this research paper titled “Study of maximum electron density NmF2 at Karachi and Islamabad during solar minimum (1996) and solar maximum (2000) and its comparison with IRI” and co-authored by employees of SUPARCO and a professor at the University. This paper raises an interesting deemed export issue since transfer of technology, even EAR99 technology, would be a violation of the EAR unless the transferred technology was “publicly available” or if it qualifies as “fundamental research.” It is not always easy to determine whether discussions with foreign persons on the Entity List fall within these exceptions, so cooperative projects with such persons by a university will always entail more than a modicum of risk.


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T-Platforms Placed on Entity List; SUNY No Longer Feels Sunny

Posted by Clif Burns at 8:11 pm on April 18, 2013
Category: BISEntity List

Source: T-Platform (Fair Use)Some tech writers have just discovered the Bureau of Industry and Securities’ Entity List and they are, well, perplexed. Arstechnica, Slashdot and HPC Wire all weighed in on the mysterious list, with all three expressing some surprise that U.S. companies could no longer supply components to T-Platforms, the Russian supercomputer manufacturer that BIS put on the Entity List back in March.

The BIS notice putting T-Platforms on the Entity List cited two rationales. First, the company had received shipments of a number of export-controlled items that had been shipped without the required licenses. Second, the notice stated that there was “reason to believe” that T-Platform was involved with the Russian military’s research on nuclear weapons. As a result, BIS stated that all exports of items subject to the EAR would require licenses and that the licensing policy would be a presumption of denial.

By focusing on the impact of the designation on exports of components and hardware to T-Platforms, the articles all missed a more interesting issue. Last year, T-Platforms delivered a supercomputer to the State University of New York at Stony Brook. My educated guess is the SUNY paid a small fortune and expected and received an agreement from T-Platforms that it would provide maintenance and service as needed for the supercomputer.

Uh-oh. To say the least. Somebody at SUNY right now is probably asking who on earth had the bright idea to buy this thing from Russia, because I’m sure that someone has realized by now that most requests for service by T-Platforms of this leviathan would inevitably require that SUNY transfer EAR99 technology to T-Platforms.  Such a transfer would occur to the extent that the request would transfer to T-Platforms non-public information on the development, production or use of the computers.

How long before we see SUNY’s new supercomputer on eBay for $19.99 OBO?

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Posted by Clif Burns at 6:50 pm on November 17, 2011
Category: BISEntity List

Love FestThis blog reported back in January on the removal of various Indian companies and organizations from the Entity List. This removal eliminated the requirement for licenses for certain exports to the removed companies that might not have otherwise required licenses.

An Indian website today quoted an executive of one of these removed groups who was, it seems, unenthused about the impact of the removal:

“I do not think removal of some DRDO labs from the Entity List by the U.S. has changed anything for us. The American export regulations for dual-use technologies and items need stringent clearances from their commerce and defence departments,” Saraswat [Chief of the Defence Research and Development Organisation ("DRDO")] said when asked if the American policy announced during US President Barack Obama’s visit last November and implemented in January this year had helped India in anyway.

“Whether or now we are with Missile Technology Control Regime (MTCR), the export rules and regulations apply for us. We have to go through the process. It is not an easy process and it becomes difficult to acquire them,” he said.

“Our experience has been these regulations make it more difficult,” he added.

If that’s the case, perhaps Saraswat won’t mind if the U.S. puts DRDO back on the Entity List.

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When Will They Ever Learn?

Posted by Clif Burns at 5:44 pm on August 4, 2011
Category: BISEntity List

ABOVE: Bharat Dynamics HQ
in Kanchanbagh, India

Late last week, the Bureau of Industry and Security (“BIS”) released documents relating to an agreement by Toll Global Forwarding (USA), Inc. to pay $200,000 to settle charges that it had aided and abetted nine unlicensed exports of EAR99 items to companies on BIS’s Entity List. The company also agreed to conduct an external audit of its export controls compliance program.

The violations at issue were committed by Baltrans Logistics prior to its acquisition by Toll Global Forwarding in 2008. The exports in question were to Bharat Dynamics Ltd. and Solid State Physics Laboratory, both government-owned entities in India which have since been removed from the Entity List.

It is hard to work up much sympathy for companies engaged in this kind of violation by failing to consult an easily accessible list on the BIS website. And in this instance, it wasn’t an isolated failure but instead nine separate failures. Worse yet, this wasn’t Baltrans’s first time at the rodeo. In 2007 Baltrans agreed to pay a $6,000 fine to settle charges of an unlicensed export to another Indian company on the Entity List. Moreover, one of the unlicensed exports in the current case occurred after Baltrans agreed to pay the earlier fine. That might explain the high fine in this case as well as the external audit requirement

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Judge Denies Request to Hold Export Defendant Without Bond

Posted by Clif Burns at 8:13 pm on July 13, 2011
Category: Criminal PenaltiesEntity List

Chasma Nuclear Power PlantThe story of the unlicensed export of epoxy paint by PPG to the Pakistan Atomic Energy Commission carries on. This blog reported on the $500,000 fine imposed on the regional sales manager involved. The epoxy was shipped to fulfill a contract between a Chinese subsidiary of PPG and another Chinese company engaged to work on the construction of the Chasma nuclear power plant for PAEC. Because PAEC is on the Bureau of Industry and Security’s Entity List, the export required a license from BIS.

Xu Wang, a U.S. woman who ran the Chinese subsidiary, was arrested last month. During a hearing yesterday, the government argued without success that she should be held without bail. According to this AP report on the hearing, the judge questioned the prosecution’s assertion that the case had serious national security ramifications.

“This is not latex paint,” said assistant U.S. Attorney G. Michael Harvey. “This is a very sophisticated paint, which has been tested and certified for use inside the containment facility of a nuclear reactor.”

That may well be the case, but if this paint indeed had such strategic implications, one has to wonder why the BIS stated, as it did in the case involving the sales manager, that the item was classified as EAR99.

A hearing was to be held today to determine the conditions of Mrs. Wang’s release.

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