ExportLawBlog

Archive for the ‘ITAR’ Category

Oct

3

Supreme Court Refuses to Hear Roth Appeal

Posted by Clif Burns at 5:41 pm on October 3, 2011

ABOVE: Professor Reece Roth

The Supreme Court term began today — today being the first Monday in October — and it got right to work by denying the certiorari petition of Professor of Professor J. Reece Roth, a professor emeritus at the University of Tennessee who had been convicted of violating the Arms Export Control Act (“AECA”). The conviction was based on, among other things, Professor Roth permitting access by a foreign graduate student to technical data relating to an Air Force military drone project. In January of this year, the Sixth Circuit dismissed Professor Roth’s appeal, which makes this pretty much the end of the road for Professor Roth.

Roth’s petition for certiorari argued that the Sixth Circuit was incorrect in its finding that the wilfulness element necessary for a conviction under the Arms Export Control Act did not require a finding that Professor Roth knew that the technology in question was on the United States Munitions List. The Sixth Circuit instead held that the standard was satisfied if Professor Roth knew that his conduct was unlawful without regard to any specific knowledge he might have relating to the USML.

Roth’s petition for certiorari relied on the Eighth Circuit’s decision in United States v. Gregg, 829 F.2d 1430, 1437 & n.14 (8th Cir. 1987) which appeared to hold that a conviction required a finding that the defendant knew the exported item was on the USML. The United States government, in its brief opposing Professor Roth’s petition for certiorari, argued that the decision in the Gregg case, although it cited a jury instruction requiring that the defendant knew the export item was on the USML, did not hold that the conviction would have been reversed if the jury instruction had not referenced the USML and had simply required knowledge by the defendant that the conduct was unlawful.

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May

18

We Have A Winner Here. Ding. Ding. Ding.

Posted by Clif Burns at 8:41 pm on May 18, 2011

Category: DDTC • ITAR • Part 122

Itar Seal Each time a company tries to tout its registration under Part 122 of the International Traffic in Arms Regulations, the claims for the meaning of this registration become more and more outlandish. Scaling peaks not yet scaled by an other registrants is a press release and the website of Aegis Electronic Group, Inc. Somebody in Aegis’s PR department is intent on not letting a red cent of the $2,250 registration fee go to waste.

First, the press release:

Receiving this registration demonstrates that Aegis Electronic Group, Inc. has the knowledge and understanding to fully comply with the Arms Export Control Act (AECE) and International Traffic in Arms Regulations, as well as having corporate procedures and controls in place to ensure compliance.

Er, no. Registration demonstrates that Aegis figured out how to fill out a form DS-2032 and pay the registration fee. There’s no test of Aegis’s knowledge or audit of its corporate procedures and controls. All that registration certifies is that Aegis had $2,250 in its bank account when its check for the registration fee cleared.

And then we have the website. At the top of the site, we have this language:

Aegis Electronic Group, Inc. is proud to be recognized by the United States Government as an International Traffic in Arms (ITAR) registered manufacturer/exporter.

“Recognized.” Did I miss the awards ceremony?

But best of all, the website is adorned with a seal to certify registration. Yes, an official looking seal that someone in their PR department cooked up on Adobe Illustrator and emblazoned with the legend “International Traffic in Arms Regulations Compliant.” It’s gold too. The seal is shown in the illustration on the left side of this post.

I now predict an out-of-control seal proliferation race as new registrants come up with more and more elaborate and official looking seals to outdo the last one cooked up by a registrant. Buy stock in Adobe now and encourage your kids to become graphic artists to get in on the ground floor of all this.

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Feb

23

Don’t Believe Everything You Read in the Newspaper

Posted by Clif Burns at 9:20 pm on February 23, 2011

Category: ITAR

I’m just going to let this quote from Frank Gaffney in an opinion column in the Washington Times speak for itself:

“Given the well-known corruption practices by EADS, it would make common sense that it not be awarded Pentagon contracts. In fact, Congress has passed the Foreign Corrupt Practices Act that bars companies who engage in bribery overseas from competing for United States government programs.

“The U.S. Department of Justice has appallingly interpreted the laws to cover only U.S.-based companies – therefore exempting EADS. But it gets worse. The federal government has gone even further and exempted EADS from the Buy American Act, the Berry Amendment, the International Trafficking and Arms Regulations and the Cost Accounting Standards. Complying with these expensive regulations is mandatory for any American company looking to do business with the Pentagon, but waived for a foreign competitor such as EADS.”

Gaffney is quoting approvingly Representative Todd Tiahrt, a U.S. Congressman from Kansas. I’m sure that the Department of Justice as well as DDTC will be just as surprised as you and I are that DOJ had exempted EADS from all defense-related export controls. If I figure out how to get an exemption from the ITAR from Justice, you’ll be the first to hear about it here.

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Jan

26

Wanna Bomb a Taliban? There’s an App for That!

Posted by Clif Burns at 7:16 pm on January 26, 2011

Category: ITAR

Tactical Nav app You may think that the only really military application for your iPhone involves using a slingshot to launch some irritated birds at shelters harboring egg-stealing pigs, but you’d be wrong. Army Captain Jonathan Springer used $26,000 of his own funds to develop Tactical Nav, an iPhone app designed to assist soldiers on the field of battle to determine and relay accurate coordinates to other soldiers, whether for the purpose of accurately targeting a nest of Taliban fighters or in order to send medical aid to wounded U.S. forces.

Explaining Tactical Nav’s functions, Springer said it allows soldiers to map, plot and photograph navigational points on a battleground and coordinate efforts with supporting units. Another feature includes a night mode, which turns the screen to red for easier visibility.

Springer tested each of these features for accuracy, using a combination of military vehicles, remote observation posts and harsh combat conditions.

Pleased with the outcome of his efforts, Springer said, “We took it from paper to what it is now … we’re very blessed and fortunate that is seems a good asset.”

Springer expects the app to be in the iTunes store for sale in February.

So here’s the question. Will Apple get a visit from the folks at DDTC if someone who is not a U.S. citizen or permanent resident or who is not in the United States downloads this app? After all, it was specifically designed for battlefield use and was tested with battlefield equipment.

I haven’t fully thought through this issue, but my initial view is that the software may not be an ITAR-controlled item. Obviously, being designed or modified military use is not alone sufficient for an item to be on the United States Munitions List. The item must still be in a category set forth in the USML. Section 120.10 of the ITAR defines “technical data” to include software but only if “directly related to defense articles.” The iPhone itself isn’t a defense article. The only other time I see software called out specifically in the USML is category XIII for military cryptography, also not relevant to this app.

I haven’t fully analyzed this, so I could be wrong. Share your thoughts in the comments section.

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Jan

5

Census Blog Miffs Export Rules

Posted by Clif Burns at 5:15 pm on January 5, 2011

Category: DDTC • ITAR

Census Jobs Available This may look like U.S. Government blog week on ExportLawBlog, but it’s purely a coincidence. Yesterday we highlighted the Treasury blog and today the subject is the U.S. Census blog with the somewhat enigmatic title of Global Reach. Because not much was popping in the Census world — something I imagine is more or less always the case — the industrious bloggers at Census thought that they would educate their readers about the mysteries of defense exports and the International Traffic in Arms Regulations with a post* titled “Understanding Basic Directorate of Defense Trade Controls (DDTC) License Requirements.”

As you continue to file shipments against your DDTC license, your license will become ‘decremented’ with each additional filing. This simply means that your license balance will decrease by the value of each accepted shipment. When the license balance is fully exhausted, an informational message will be sent stating:

176 DDTC LIC NOW EXHAUSTED:

At this time, your company must apply for an amendment to add more value onto the license or apply for a new license.

Um, no. There is so much wrong with the statement quoted above, it’s hard to know where to start. But I’ll start with the statement that decrementing means decreasing the balance by the “value” of each accepted shipment. Decrementing reduces the remaining quantity and the remaining value, not just the remaining value. If you are entitled to export 5 widgets with a value of $50 and you export 5 with a value of $35, the quantity on your license is decremented to zero and the license is kaput. You can’t export $15 more of widgets. You’re done.

Second, you can’t amend a license to increase quantity or value. Section 123.25(c) of the ITAR makes that perfectly clear as to increases in licensed quantities. You need a new license for the additional quantities. This notice posted on the DDTC website indicates that a new license is needed to add additional value to the license.

Here’s an idea: in the unlikely event that DDTC ever starts a blog, it should agree that it won’t post anything on the procedures for challenging population estimates if Census agrees not to post anything ever again on the ITAR.

*The original post disappeared from the Census blog a little while ago, apparently after Census received one or more emails pointing out the howler in the post. Of course, thanks to the miracle of the Google cache, nothing ever really dies on the Internet, and the link to the Census post above is a link to it in the Google cache. In case that ever disappears, here is a pdf version of the post for posterity.

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