Archive for the ‘Part 122’ Category


Jun

10

Spanish Night Vision Dealer Debarred for Unauthorized Re-Exports


Posted by at 6:19 pm on June 10, 2014
Category: DDTCPart 122

By Spc. Jeffery Sandstrum via http://usarmy.vo.llnwd.net/e2/-images/2007/11/01/9792/ [Public Domain]Carlos Dominguez and his Madrid-based company Elint SA have been administratively debarred by the Directorate of Defense Trade Controls in connection with his unauthorized re-exports and re-transfers of night vision equipment shipped to him from the United States pursuant to DDTC licenses. The unauthorized re-exports and re-transfers were discovered by so-called Blue Lantern checks conducted by foreign embassy staff at the request of the DDTC to determine the ultimate disposition of items exported from the United States pursuant to DDTC licenses. (Interestingly, the cables requesting the Blue Lantern transfers had been previously disclosed when they were leaked by WikiLeaks.)

As a result of the unfavorable Blue Lantern checks, DDTC first imposed in 2009 a policy of denial on Dominguez and Elint. In 2010, DDTC followed up by sending a directed disclosure demand to Elint and Dominguez. A directed disclosure is a DDTC demand that the recipient investigate its export practices and provide to DDTC a list of all its export violations, a request that Dominguez and Elint not surprisingly ignored. A charging letter followed, also ignored, which led to a finding of default by an administrative law judge and the instant order of debarment.

Although section 127.7 of the ITAR specifies that such administrative debarments are “generally” for a period of three years, the order against Dominguez and Elint mentions no time period and is, presumably, permanent. It is safe to say that DDTC is not amused with Dominguez, and this appears to be in large part because of considerable evidence alleged by DDTC that Dominguez tried to evade the policy of denial by setting up shell companies and acting through third parties.

Interestingly, DDTC claims that it has the authority to issue “directed disclosures” under section 122.5(b) of the ITAR, which is, at best, a rather fanciful construction of that section. That section requires that records “maintained” under section 122.5 must be made available to DDTC, but says nothing about any obligation to create new records at the request of DDTC and then provide them. More interestingly, section 122.5 applies to “persons required to register” under Part 122. That obligation is imposed on persons who engage “in the United States in the business of manufacturing or exporting” defense articles. That, of course, does not cover foreign end users of U.S. exports, so it is not at all clear how DDTC can justify issuing the directed disclosure to Dominguez under section 122.5(b).

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Jun

4

ITAR Registration Puffery: XAND Raises the Bar


Posted by at 6:38 pm on June 4, 2014
Category: Part 122

XAND Date Center via http://www.xand.com/assets/MG_2226_Low-1024x668.jpg [Fair Use]An ongoing feature of this blog has been, for some time, to highlight ITAR registration press releases where companies breathlessly announce their registration under part 122 of the ITAR as if it were equivalent to having been awarded the Nobel Peace Price, an Oscar, and three Michelin stars on the same day when in fact the State Department routinely hands out Part 122 registration to anyone who can figure out how to fill out a short form, write a check for the registration fee and send both to Washington. Once the check clears, a registration is issued by DDTC without so much as even looking at the registrant’s elevator certificates and corporate cafeteria lunch menu.

So when a friend of the blog pointed out a press release headlined “Xand Earns International Traffic in Arms Regulations (ITAR) Compliance from U.S. Department of State,” it was clear that we had a moral obligation to bring to our readers the latest and greatest in marketing department hyperbole.

Xand, the Northeast’s premier provider of cloud, managed services, colocation and disaster recovery announced today the successful completion of all regulatory requirements required to attain International Traffic in Arms Regulations (ITAR) registration and compliance from the U.S. Department of State, a unique distinction among infrastructure service providers.

Okay, so maybe the “regulatory requirements” meant by Xand were filling out the form and sending the check. Well, you might think that until you see what the company’s Chief Security Officer had to say:

We selected data center facilities in Pennsylvania, New York, and Massachusetts to undergo thorough and exhaustive compliance testing to meet the critical standards of the U.S. Department of State. The end result allows Xand to provide clients with unmatched geographic diversity and redundancy options when it comes to housing, storing, and protecting the data and technology infrastructure needed to power the critically important work of the defense industry.

It seems to me that the State Department ought to tell people that it will revoke the registration of anyone who so fundamentally misunderstands the ITAR as to suggest in public that registration is the result of compliance testing and constitutes a certification that the registrant is compliant.

One other interesting point here is to try to figure out why Xand needed registration in the first place. Registration is required for parties that manufacture items on the USML and for those that export goods or technical data on the USML. Frankly, I’m baffled how a domestic cloud and colocation service provider does either of those things even if it has customers that manufacture or export USML items. Anyone have any thoughts on this?

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Jan

30

It’s Always Harder the Second Time Around


Posted by at 6:08 pm on January 30, 2013
Category: DDTCPart 122

Clickenbeard HQWell, today is truly a red letter day in the annals of ITAR registration puffery. For the first time ever (at least that I’ve seen), we have a company boasting that it has received ITAR re-certification. This blog has reported plenty of instances of companies that breathlessly announce that they have received “certification” upon their first ITAR registration filing, but until now no company has tried to make a news event from filing their renewal of that registration.

The proud company is Illinois-based Clickenbeard & Associates, Inc., and their press release really slathers it on thickly:

Clinkenbeard … has received official International Traffic in Arms Regulations (ITAR) re-certification from the United States Department of State, Bureau of Political-Military Affairs.

… Companies receiving this certification demonstrate that they have knowledge and understanding to fully comply with the AECA and ITAR as well as having corporate procedures and controls in place to ensure compliance.

“This re-certification is evidence of our commitment and ability to safeguard all defense- and government-related data for our customers and our country. Further, it demonstrates our government‘s trust in our doing so,” explains Steve Helfer, Clinkenbeard general manager.

I particularly like the statement that registration renewal demonstrates the “government’s trust” in Clickenbeard. To repeat (for the, oh, four thousandth time), all that ITAR registration (or re-registration for that matter) demonstrates is that the company had the filing fee in its bank account, could figure out how to fill out a form and send it to DDTC, and was able to pay for the postage required to send it in. Registration numbers are given by DDTC to everyone who can do those three things, even if they don’t know the difference between “registration” and “certification,”  between an export and a deemed export or between a DSP-83 and a salt shaker.

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Jan

4

Washington Post Jumps On The “ITAR-Certified” Bandwagon


Posted by at 3:23 pm on January 4, 2013
Category: DDTCPart 122

Washington PostBuried among all the articles on the recent events on the Hill, the Washington Post snuck in an article on the White House’s export control reform initiative and on export controls in general. Unfortunately, but not surprisingly, the reporter gets tangled up in the complexities of the current export control regime and muffs a few things.

The worst of these errors was the simplest one to avoid. As regular readers of this blog know, we have spilled several million gallons of digital ink (or should I say illuminated millions of computer screen pixels?) decrying and ridiculing the concept that the required registration under the International Traffic in Arms Regulations (“ITAR”) for manufacturers of defense articles represents some kind of “certification” of the manufacturer.   Instead, registration signifies nothing more than that the manufacturer filled out a  brief form disclosing certain corporate information and paid the required fee. It is not, by any stretch, an “ITAR certification.”

But now this “certification” canard has wriggled its way into the august pages of Washington’s paper of record:

Building the boards in the United States costs Kincaid “100 to 400 percent” more, he says, but he did not hesitate to fill out the paperwork five years ago and pay the fee, which is now more than $2,000, to become an ITAR-certified manufacturer because he appreciated the made-in-the-United-States sentiment and thought that it might “bring some of the work back.”

Sigh.

And then there’s this:

So a defense contractor sending equipment for U.S. military use on a battle­field abroad must obtain its authorization to “export” its product to a foreign country.

No. If the manufacturer sells the equipment to the U.S. military and they take it abroad, the manufacturer doesn’t need a license.

And this:

As Abrams sees it, the trouble for businesses like Kincaid’s isn’t compliance with export controls but the uneven application of the controls. For instance, her organization has seen identical bid requests “with one stamped ITAR and one not stamped ITAR,” she says. So if one company complies and the other does not, then the noncompliant manufacturer seizes a significant competitive advantage, assuming no one comes calling from the departments of State, Commerce or Treasury — three agencies with different computer systems, missions and cultures, but all with responsibilities in export controls.

Again, no. Neither Commerce nor Treasury would have any responsibilities or jurisdiction over the unauthorized export of ITAR-controlled items.

I spent some time speaking with the reporter on this story and, apparently, did not do a good enough job communicating to him some export control basics, so I take part of the blame for these last two errors. But, I made a big deal with him about “certification” versus “registration,” so there was no excuse for that mistake.

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Oct

25

If You Wish Upon ITAR


Posted by at 8:10 pm on October 25, 2012
Category: DDTCPart 122

Itar SealIt has been a while since we’ve highlighted the ever popular press releases of companies touting their ITAR registrations as the best thing since ShamWows and Chia Pets. Today’s companies that will do the Part 122 walk of shame are Professional Aviation Associates and American Industrial Systems.

Take it away, Professional Aviation Associates:

Professional Aviation Associates, a Greenwich AeroGroup company announced it recently became International Traffic in Arms Regulations (ITAR) certified.

According to the Directorate of Defense Trade Controls (DDTC), the U.S. Government requires all manufacturers, exporters, and brokers of defense articles, defense services or related technical data to be ITAR compliant.

The ITAR certification allows Professional Aviation Associates to supply rotables to military aviation operators of both fixed wing and rotorcraft models, as well as parts and tooling to foreign militaries

Of course, the only thing that DDTC has “certified” for PAA is that PAA could figure out the names of its officers and directors, put them on a piece of paper and send them to DDTC with a check that didn’t bounce. All certifications should be this easy. I do hope that during this intensive certification process, PAA learned that it needs more than just its certification to supply “parts and tooling to foreign militaries.”

But today’s winner is American Industrial Systems:

American Industrial Systems Inc. (AIS), an ISO 9001:2008 certified supplier and manufacturer of rugged computer and display has announced completion of the International Traffic in Arms Regulations (ITAR) registration with the Directorate of Defense Trade Controls (DDTC). ITAR is a set of United States government regulations that control [sic] the export and import of defense-related articles and services on the United States Munitions List (USML). This registration, and with [sic] our commitment to ISO 9001 standards, documents AIS’s dedication to adhering to the strict regulations that control the export and import of defense-related services. AIS has proven their knowledge, understanding, and compliance to [sic] the US Department of States [sic] regulations in addition to the inclusion of defined corporate procedures and controls.

Well, I can tell you at least one subject that isn’t on the ITAR certification exam.

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