Archive for the ‘Foreign Export Controls’ Category

Sep

26

Brits Target Propofol Exports to U.S.

Posted by Clif Burns at 7:01 pm on September 26, 2012
Category: Foreign Export Controls

PropofolThe United Kingdom’s Department for Business Innovation and Skills (UK-BIS) recently released a notice to exporters with regard to exports of propofol from the U.K. to the United States. Propofol is probably best known these days as the sedative that cancelled Michael Jackson’s final tour. But the export ban is not the result of any special solicitude for The Gloved One or other substance-abusing American pop stars. (After Amy Winehouse, I think that Great Britain would be in no position to get on its high horse about chemically dependent pop stars in other countries.)

What caused the U.K. to overlook its special relationship with the United States and instead treat us as a naughty child unworthy of one of its pharmaceutical exports were news reports that the state of Missouri planned to use propofol as part of its lethal injection cocktail when executing prisoners. There are no indications that that this action by the United Kingdom has caused the State of Missouri to reconsider its position on capital punishment. Propofol is available generically and is produced worldwide.

My favorite part of the notice is this:

This control reflects the Government’s opposition to the use of the death penalty in all circumstances. Following consultation with applicable industry and other bodies, we assessed that the trade between the UK and the USA in propofol appears to be negligible, and therefore we expect the impact on UK businesses to be low.

These moral reservations, of course, came to late to save Admiral Bing whom the British unceremoniously shot, as Voltaire said, “pour encourager les autres.”  Best of all, these moral reservations come at no cost to British industry because, apparently, propofol isn’t actually being exported in any measurable amounts from the U.K. to the U.S. Millionaires are also similarly admirable when they state their profound opposition to stealing pennies from toddlers.

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Sep

19

Time Machine Used to Export Ammo to Libya

Posted by Clif Burns at 3:26 pm on September 19, 2012
Category: Arms Export • Foreign Export Controls

Exports of defense articles to repressive Arab regimes by the United Kingdom have re-ignited a debate as to whether Parliament should have the right to approve certain defense — or should I say “defence”? — exports utilizing a process similar to the Congressional notification procedure required by the U.S. Arms Export Control Act. To illustrate a story on this debate, The Guardian used the photo below, allegedly showing ammunition that was found in Benghazi and had supposedly been exported from the U.K. to Gaddafi in Libya prior to Gaddafi’s final stand.

Guardian Photo

A reader points out the ammo box bears the markings of the Imperial Chemical Industry Metals Division. But before you get out your pitchforks and torches and storm the gates of that company, you should understand that the Imperial Chemical Industry Metals Division ceased to exist in 1962, when it was renamed Imperial Metal Industries Ltd., as you can read here on IMI’s website.

So one of three things happened here. IMI was sending stuff out in 60-year-old wooden crates with the wrong name on it. Or, perhaps, someone at Imperial Chemical Industries had a flux-capacitor equipped DeLorean in 1960 and drove the ammo through time and space to Benghazi, Libya, in 2010. Or, finally, the editors at the Guardian were knocking down pints at the local pub when they should have been on Google.

We report, you decide.

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Sep

12

UK Uses Encryption Controls To Prevent Export of FinSpy Trojan

Posted by Clif Burns at 6:33 pm on September 12, 2012
Category: Encryption • Foreign Export Controls
Gamma International HQ
ABOVE: Gamma International
headquarters in Andover, UK

Bloomberg News reported yesterday that the U.K. has imposed export controls on Gamma International’s FinFisher software. FinFisher is commercial trojan software that can take over computers and mobile phones and which the company has marketed to foreign governments anxious to keep really, really close tabs on political dissidents. Reporters and privacy groups have uncovered evidence recently that the nice folks in Bahrain were using this software against political dissidents in that country.

Of particular interest is the rational used by the U.K. to assert export controls over the software. According to a letter sent by the U.K. government, the software required an export license because it uses cryptographic functionality covered by Category 5, Part 2 of the E.U.’s Dual Use Control List:

The Secretary of State, having carried out an assessment of the FinSpy system to which your letter specifically refers, has advised Gamma International that the system does require a licence to export to all destinations outside the EU under Category 5, Part 2 (‘Information Security’) of Annex I to the Dual-Use Regulation. This is because it is designed to use controlled cryptography and therefore falls within the scope of Annex I to the Dual-Use Regulation. The Secretary of State also understands that other products in the Finfisher [sic] portfolio could be controlled for export in the same way.

Of course, the interesting question here is whether the similar controls placed on encryption in Category 5, Part 2 of the Commerce Control List would require an export license if a U.S. company wanted to export similar trojan software for surveillance purposes. More particularly, the issue is whether under License Exception ENC a U.S. company could self-classify the item and export it without license if it had previously registered and received an Encryption Registration Number. It seems to me that it could not because the software at issue falls within 740.17(b)(2)(i)(C)(3) which excludes from self-classification items that have been designed for government end users. It is abundantly clear that Gamma International only sells this trojan software to government end users. Nevertheless, items in this category can be exported immediately upon filing a classification request to countries outside those listed in Supplement 3 to Part 740, e.g., most NATO countries as well as Japan, Switzerland, Malta, Australia and New Zealand. Licenses would be required, however, for exporting the software to countries outside those listed in Supplement 3. The U.K. will apparently require licenses to all destinations.

An additional control on such software in the United States could be found in ECCN 5D980 which controls software “primarily useful for the surreptitious interception of wire, oral, and electronic communications.” However, at least under current policy licenses to export such software to government agencies in countries other than Cuba, Iran, North Korea, Sudan, and Syria are generally approved. Whether that policy will hold given the current publicity over the use of FinFisher by oppressive regimes is another matter.

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Sep

22

U.K. Tribunal Rules That Export Agency Can Keep Iran Licenses Secret

Posted by Clif Burns at 5:00 pm on September 22, 2011
Category: Foreign Export Controls • Iran Sanctions

Mahmoud AhmadinejadThis blog reported earlier on a lawsuit brought by Bloomberg Business Week against the U.K. Export Control Organization (“ECO”) which had rejected a request by Bloomberg to release information on licenses the ECO had granted to permit U.K. companies to export dual-use materials to Iran. The United Kingdom complies with U.N. sanctions and does not allow export of arms and materiel to Iran but does allow licensed export of dual-use goods listed on the Wassenaar list to Iran.

The ECO argued that disclosure of these names could cause these companies to lose their ability to use U.S. commercial banking facilities, and the Tribunal, saying the the possibility of U.S. meddling was “disturbing,” agreed:

There is a significant public interest in protecting large and small firms, which trade lawfully and legitimately, from economic harm from a form of embargo imposed by banks, competitors, suppliers, clients and possibly foreign governments. … The tribunal felt some concern at the prospect of a U.K. company, trading quite lawfully in terms of U.K., EU and international law, suffering possibly fatal commercial damage through the extraterritorial intervention of our closest ally.

Bloomberg‘s editor Matthew Winkler objected to the tribunal’s ruling, noting that the tribunal relied on “secret evidence” asserting that “banks will withdraw funding for companies if the public knew who is doing business with whom.”

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Jan

12

Hey Big Brother

Posted by Clif Burns at 10:18 pm on January 12, 2011
Category: BIS • China • Foreign Export Controls • Wassenaar
Johan Gadolin
ABOVE: Johan Gadolin,
discoverer of yttrium

China Daily is a great source of unintentional humor, and I really wish I had more time to peruse it. I did stumble across a recent opinion piece in China Daily on the rare earth export issue and, not surprisingly, there is much to snicker about in it, unless, of course, your business depends on the availabilities of the lanthanides, known to us non-technical sorts as the rare earth elements.

China initially justified its restrictions on exports of the lanthanides as a measure to encourage companies using lanthanides to relocate to China. Article XI of the General Agreement on Trade and Tariffs generally prohibits export quotas unless they fall within the exceptions set forth in Section 2 of Article XI or Article XX. Not surprisingly, efforts to distort international trade by forcing companies to relocate to the country imposing the quota is not within the exceptions set forth in GATT.

Somewhat later China began to cite the environmental impact of rare earth mining as a justification for the quotas. That argument was easily dismissed as a transparent ruse because China imposed no restrictions on rare earth mining for domestic use, no matter how loudly they complained the foreign exports of rare earths were killing Chinese workers.

Now, the article referenced by this post attempts to concoct another justification for its export quotas: national security. The article starts with a slam at the Wassenaar Arrangement which it claims is some kind of anti-socialist conspiracy by capitalist Western nations and a broad-based justification for China to impose any export controls it can dream up:

Export regulation was originally introduced for security issues. After World War II, the United States and other countries established the Coordinating Committee for Multilateral Export Controls (COCOM) against socialist countries; its successor, in effect today, is the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies.

In recent years the restrictions have become ever tighter. On June 19, 2007, the US Ministry [sic] of Commerce listed more than 2,500 kinds of technologies, devices, and materials banned [sic] for export to China.

Those familiar with the 2007 rule cited by China Daily, may wonder where the author came up with the idea that 2,500 kinds of technologies were banned for export. The rule imposed certain new license requirements for dual use items destined for use by the Chinese military but did not ban those exports. There were bans on items controlled for nuclear proliferation, missile technology, or chemical and biological warfare that would contribute to major Chinese weapons systems, but the 2,500 number is more than a little high as an estimate of the number of technologies involved.

More importantly, China’s claim that these restrictions are premised on national security would be more convincing if it had been its initial justification. And, of course, the Wassenaar list, which represents not a capitalist conspiracy but a multilateral consensus of strategic goods that require export controls, would permit China to exert export controls on the items on that list, items that don’t include the lanthanides.

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