Archive for the ‘Technical Data Export’ Category


Jun

4

Once Upon a Time in a Public Domain Far, Far Away


Posted by at 9:19 pm on June 4, 2015
Category: DDTCTechnical Data Export

England's Oldest Working Catapult by Thoms Euler [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://www.flickr.com/photos/thomaseuler/3656736595/ [cropped]Once upon a time, and long before the Internet, in a distant and dank corner of Washington, D.C., there lived an obscure agency called the Directorate of Defense Trade Controls (“DDTC”), which, among other things, kept watch, like a jealous dragon, over certain types of information that it believed it was destined to protect, information such as how to build a catapult or the best timber to use for a battering ram or the deadliest method for swinging a mace at an enemy. And it sent out a decree, far and wide, that anyone who should dare to disseminate such information without its permission, except in locked rooms with less than three other citizens present between the hours of midnight and dawn, would be sentenced to immediate gibbeting. Fortunately, there was no Internet, so few, in those days, were seen hanging in cages in Foggy Bottom.

Of course, this little fairy tale is a preface to the recent release by DDTC of proposed revised definitions of, among other things, the term “public domain” which, as you might imagine, does not mean to DDTC what it means to anyone else who speaks English. The proposed new definition seems to have been written by people who have heard of the Internet only as something the kids use to tweet things and post selfies.

The importance of the definition of “public domain” is that information about defense articles (like muskets and missiles) is not subject to export controls if it is in the “public domain” as defined in section 120.11 of the International Traffic in Arms Regulations (the “ITAR”). DDTC has previously taken the position that pictures on the Internet were not “public domain” because section 120.11 does not specifically mention the Internet. (Never mind, of course, that the definition includes information available “[a]t libraries open to the public” and that every single library in the United States, save apparently for the one at DDTC, has Internet terminals.)

The newly proposed rules, coming more than twenty years after the appearance of the World Wide Web, finally (and grudgingly) acknowledges the existence of the Internet.  The new definition would define “public domain” to include information made available to the public through

Public dissemination (i.e.,unlimited distribution) in any form (e.g., not necessarily in published form), including posting on the Internet on sites available to the public;

Before you get to excited, however, there’s this: an exception that eats up the entire definition from any practical point of view.

(b) Technical data or software, whether or not developed with government funding, is not in the public domain if it has been made available to the public without authorization from:

(1) The Directorate of Defense Trade Controls;

(2) The Department of Defense’s Office of Security Review;

(3) The relevant U.S. government contracting entity with authority to allow the technical data or software to be made available to the public; or

(4) Another U.S. government official with authority to allow the technical data or software to be made available to the public.

So, you see a picture of a fighter jet on the Internet. Is it “public domain” or not?  Will you get in trouble for re-posting it? Well, you have no idea because you have no way of knowing whether any official falling in the four categories above has authorized it to be posted. You probably can’t even tell who falls in category (3) or (4). In fact, nobody can probably tell which government officials fall in those categories.

DDTC attempts to address this issue with a note saying that if somebody else put the information on the Internet you are not breaking the law unless you “know” that they did so without authority.  But does “know” mean actual knowledge or does it slide, like it often does, into not engaging in due diligence to determine that it was authorized?  Your guess is as good as mine.   So use the Internet at your own risk, unless you’re just posting selfies on Instagram.

For companies in the defense industry, this proposed definition is equally problematic if they use the Internet at all.  Every time they post information on their own products, thinking that the information they are posting is already in the “public domain,” they need to ask permission from DDTC if they haven’t already done so.  And, of course, since there are no time limits in the proposed definition, this issue would exist for everything the company has ever posted on the Internet.

Dark times for the Internet ahead when (and if, as is likely) this new definition goes into effect.

 

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Mar

3

Might As Well Be Hung for a Sheep as a Lamb


Posted by at 9:58 pm on March 3, 2015
Category: Criminal PenaltiesDDTCTechnical Data Export

Mozaffar Khazaee [Credit: Essex County Mug Shot Catalog]
ABOVE: Mozaffar Khazaee


On February 25, Mozaffar Khazaee, a former employee of various defense contractors, pleaded guilty to illegal export of ITAR-controlled technical data to Iran. The case started with an audacious shipment from Connecticut to a freight forwarder in Long Beach, California, by Khazaee of 44 boxes labelled as household goods that, in fact, contained numerous manuals and other technical documents relating to the F35 Joint Strike Fighter and military jet engines. The boxes were intended for ultimate shipment to Iran. Further investigation revealed that these documents had been taken by Khazaee from defense contractors for which he worked and that taking these documents violated the contractors’ rules requiring return of all documents at the end of employment. Khazaee was initially arrested for charges, set forth in the criminal complaint, of illegally transporting stolen property across state lines.

Khazaee’s ultimate plea was for violation of the Arms Export Control Act. The superseding information that served as the basis for the plea, however, alleged the export of only one document (out of the 44 boxes of documents) which was asserted to contain controlled technical data designated under Category XIX(g) of the United States Munitions List.

Two things stand out about this case. First, the superseding information charged, and Khazaee pleaded guilty to, export of the document and not attempted export of the document. The problem is the document was seized in Long Beach and never left the country. Section 120.17 of the ITAR defines export as “taking a defense article out of the United States.” No matter what your feelings may be about Long Beach, California, it is definitively still in the United States last time I checked. There is some evidence that the boxes may have been loaded onto the Panamanian-flagged NYK Libra. But given the definition of United States in section 120.13, it is hard to argue that the document left the United States until the NYK Libra did.

The second thing of interest were statements made by Khazaee, and cited in the superseding information, to potential employers in Iran that his job advancement in the United States had been hindered by his Iranian nationality even though he was an American citizen.

Even though working industry being very exciting, with best pay salary and high-tech events, my original nationality being Iranian (which I am very proud of), has caused me tremendous issue and hindrances towards my progress and goals. I can’t make any publication in current job (everything is very proprietary and restricted, mostly military projects), I was rejected to participate in the new advance engine program (this is beyond F135 engine, it’s called AETD), purely based on my original nationality. This is the primary … reason for my consideration to move to Iran.

Obviously one wrong does not justify another. However, discrimination against a U.S. citizen based on his national origin,if this is what occurred here, is a violation of federal law. And given the unhealthy obsession of the DoD and DDTC on national origin, at least with respect to dual and third-country nationals, it seems at least possible that this may have occurred. It may well be that the best way to encourage loyalty among American citizens is to treat them all equally without respect to where they were born.

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Sep

24

Get Smart: Chinese Spy Edition


Posted by at 4:51 pm on September 24, 2014
Category: Arms ExportCriminal PenaltiesDDTCTechnical Data Export

By General Artists Corporation-GAC-management. [Public domain], via Wikimedia Commons http://commons.wikimedia.org/wiki/File%3ADonAdams.jpgMeet Charlie and Alice, two self-professed PRC spies who branched out from smuggling crystal meth into the United States to attempting to export airplanes and military technology from the United States to the PRC. Things did not turn out so well for Charlie and Alice who probably should have stuck with drug trafficking. So, find a comfortable chair, grab a bag of popcorn, and prepare to be entertained by the story that unfolds in the Criminal Complaint filed against them and to which they just pleaded guilty.

It was a dark and stormy evening in Manila when a counterfeit cigarette smuggler introduced two undercover agents working for the United States to Hui Sheng Shen, a/k/a “Charlie,” and Huan Ling Chang, a/k/a “Alice.” According to Mr. Counterfeit Cigarette Guy, Alice and Charlie could help the UCs obtain methamphetamine.

Alice and Charlie, explaining to the UCs that email was insecure, set up a drop email account, gave the UCs the credentials for the account, and said that they should communicate via messages left in the draft folder. (This method is not particularly effective in hiding communications from the government when you’re dealing with undercover agents but, whatever, it’s the trendy spycraft du jour.) Using this method, a deal for a kilo of meth was consummated and shipped to the UCs in tea bags hidden in computer towers. (Of course, no customs inspector would ever be suspicious of tea bags in computer towers so this is yet another example of top notch spycraft by Charlie and Alice.)

Emboldened by their world-class narcotics deal, Charlie and Alice decided to move on to bigger things and just kinda casually dropped into a subsequent conversation with the UCs that they would, oh, by the way, like to buy a military aircraft. Because, naturally, guys who buy drugs normally have a warehouse of military aircraft that they can sell to the people they buy drugs from.  And Charlie and Alice wanted not just any airplane but a honking huge E-2 Hawkeye reconnaisance aircraft. “Sure, Charlie, I’ll leave one for you at the front desk of your hotel after you wire me $100 million dollars.”

Of course, knowing the sensitivity of such an operation, Charlie and Alice wanted to refer to the Hawkeye in code as the “Big Toy.” That way, they could always claim, if caught, that they were really talking about a 12-ton toy Tonka truck. At this point, one of the UCs hits comedy gold when he says to Charlie and Alice:

“Do you guys realize what this thing is?.. . This thing is like a um 757 plane — it’s on aircraft carriers. Those things don’t just disappear.”

Undeterred, Charlie and Alice still kept negotiating to buy the “big toy,” stating that their buyer, which they described as the “Chinese C.I.A.,” could afford it. The UCs, however, managed to steer them to something more manageable, something that could fit in a backpack, namely, a Raven RQ 11B UAV. Charlie and Alice explained that they could smuggle the UAV out of the United States by having scuba divers or remote-controlled submersible vehicles carry the items to an off-shore Chinese ship. They also planned to get the manuals out by taking pictures of the manuals, deleting the pictures from the memory cards and then having their friends in China recover the deleted images.

There were, of course, two problems with the deleted image trick. First, everyone (even Customs) knows about it and can easily detect and recover deleted images on digital camera memory cards. Second, Charlie and Alice were arrested while taking the pictures.

For those who want to try at home the recovering deleted images trick, here’s a quick guide on how to do that.

 

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Apr

11

Bird Flu Research Flies Into Export Laws, Crashes, Then Burns


Posted by at 10:43 pm on April 11, 2012
Category: BISGeneralTechnical Data ExportWassenaar

Bird FluApparently international research on how best to prevent, contain and treat bird flu is now threatened by international laws restricting export of information relating to potential agents of biological warfare according to this report on NPR. The problem concerns research conducted by researchers in the United States and the Netherlands which resulted in a controversial paper concerning alterations in the virus that would make it more contagious. There was some concern that this information might be useful to terrorists and rogue states interested in biological warfare agents.

To address this concern, the decision was initially made to restrict publication of the study and related materials and to make them available only to designated researchers and government officials with “a need to know.” What apparently no one realized was that this would prevent the research from falling within the fundamental research exception and would, therefore, prevent cross-border discussions or transfer of the information without specific governmental authorization.

Once this was realized, the decision was made to eliminate the “need to know” restrictions and simply to publish the materials so that the research could be considered fundamental research and could be shared freely with researchers in other countries. But the government of the Netherlands is arguing that the publication of the research could not undo the effect of the earlier decision to restrict dissemination and that therefore the research could not be exported from the Netherlands without approval of that government.

This situation illustrates the difficulty in applying the fundamental research in practice. To begin with, there is no easy way to determine what is or is not fundamental research. Export lawyers and export professional at universities have tried to strengthen the case that research is eligible for the fundamental research exception by pointing to whether research was published or, even if not published, was permitted or required to be published under applicable grant contracts or university rules.

The conundrum here is whether sensitive material can be transformed into fundamental research simply by publication. If one group of researchers decides to release the information, does this act of a few individuals instantly transform the information into fundamental research? But if publication isn’t the standard for deciding what is fundamental research, what other standards are available and who should be able to apply those standards? What these questions without answers demonstrate more than anything else is the slippery slope that we head down when we try to apply export controls to information. Rather we should rely on classification rules and procedures to control dissemination of truly sensitive information.

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Aug

9

Are You Now, or Have You Ever Been, a Spy?


Posted by at 5:00 pm on August 9, 2011
Category: DDTCDeemed ExportsTechnical Data Export

QuestionnaireWith the August 15 implementation date for the new dual and third country national rule fast approaching, I wanted to comment briefly on the Sample Questionnaire that the Directorate of Defense Trade Controls (“DDTC”) has proposed as an example of something foreign companies should use to review whether a dual or third-country national has “substantive contacts” with other countries. Under the new rule, foreign companies covered by a technical assistance agreement (“TAA”) can share technical data with full-time employees who are also nationals of countries other than the company receiving the data under the TAA. One of the conditions, however, for using that rule is that the foreign licensee must examine the “substantive contacts” of that third-country or dual national with other countries to determine whether there is a risk of diversion of the technical data outside the home country of the foreign licensee.

The sample questionnaire proposed by DDTC represents the agency’s suggestion as to one way that such screening should take place. Some of the questions are poorly drafted, and many of the others are just plain silly and can be roughly paraphrased as simply asking the person involved whether or not he or she is a foreign spy — as if they would answer that question truthfully if they were.

In the poor drafting category, we have this question:

Do you have business contacts, business partners, business contracts, brokers, or any other relationship with a business in another country or other countries subject to U.S. or U.N. embargo?

Because the question as to whether there are contacts with “another country” would necessarily include countries subject to embargo, the final clause is unnecessary and potentially confusing.

Also in the poorly drafted category, we have this incredibly broad inquiry:

Have you ever served in or provided information to the government of another country (e.g., military, foreign ministry, intelligence agency or law enforcement)?

Anybody who has ever traveled to a foreign country would have to answer this affirmatively because of the requirement to provide information to customs and immigration officials upon entry in to the country. And, of course, a third country national will have provided tons of information to his home country government in terms of tax returns, driver’s license applications, and the like. And what about state-owned enterprises? Does information provided to them constitute information provided to the government?

Then we have the “are you a spy” questions:

Do you have contacts with any other individuals or groups involved in acquiring controlled defense articles, including technical data, illegally or otherwise circumventing export control laws? Please explain the nature of that contact.

Do you have contacts with agents from another country or another country’s government?

Do you have contacts with agents from another country or another country’s government?

It is a little known historical fact that Mata Hari, when asked questions of these sorts, broke down into tears, confessed to the French government that she was a spy and asked to be immediately taken to the firing squad for execution.

The questionnaire also has the dual or third country national attest that he or she has given the company complete and accurate “social networking addresses.” Apparently whoever wrote this had heard that all the kids these days do these Twitter and Facebook thingies but didn’t really understand how any of them worked. There really isn’t any such thing as a “social network address,” unless the DDTC expects that something like www.facebook.com be provided as a response to this question. Presumably the idea here would be that the employee has allowed the company to follow or “friend” the employee on Facebook, Twitter, Google Plus or the like. This would mean, I guess, that the foreign licensee will then inspect all the tweets or postings of the employee to make sure that he or she hasn’t said in one or more of them that they are passing controlled technical data to foreign government agents. It is probably easier just to not use the exemption.

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