Archive for the ‘USML’ Category



The Sledgehammer Exception

Posted by at 10:18 pm on February 18, 2015
Category: Arms ExportDDTCITARUSML

Sanaá, Yemen by Rod Waddington [CC-BY-SA-2.0 (], via Flickr[cropped]

When the Marines evacuated the U.S. Embassy in Sanaá, Yemen, there were reports that they left some of their weapons behind, in large measure because they were leaving on a commercial flight. At first the military said that crew-served weapons and machine guns were destroyed before departure, but that M-9 pistols and M-4 carbines were handed over to Yemenis before the boarded the plane.

Realizing that this was perhaps a giant SNAFU, the military later revised its story to take care of the pistols and the carbines

“Upon arrival at the airfield, all personal weapons were rendered inoperable in accordance with advance planning,” the statement said. “Specifically, each bolt was removed from its weapons body and rendered inoperable by smashing with sledgehammers. The weapons’ bodies, minus the bolts, were then separately smashed with sledgehammers.”

There you have it: nothing to see here because the military used the smashed-to-bits exception which authorizes a U.S. person to retransfer a defense article to a foreign end user as long as someone takes a sledgehammer to it first. You may be wondering if there is such an exception, and the answer is maybe yes and maybe no.

A few initial observations are in order. First, the Arms Export Control Act applies to the military and active duty troops just as it does to everyone else. Second, the ITAR prohibits unlicensed transfer of defense articles from one foreign end use to another foreign end use without a license. So, unless there is a sledgehammer exception, we have a problem here.

The only possible source for the sledgehammer exception is section 126.4, which states:

The approval of the Directorate of Defense Trade Controls must be obtained before defense articles previously exported pursuant to this exemption are permanently transferred (e.g., property disposal of surplus defense articles overseas) unless the transfer is pursuant to a grant, sale, lease, loan or cooperative project under the Arms Export Control Act or a sale, lease or loan under the Foreign Assistance Act of 1961, as amended, or the defense articles have been rendered useless for military purposes beyond the possibility of restoration.

At first glance, this appears to support the sledgehammer exception. The military says it rendered the bolts “inoperable.” The rest of the weapons, however, were just smashed. So, I think we don’t have to worry about the bolts, but did smashing the rest of the weapons with a sledgehammer render every other part and component of those weapons “useless for military purposes beyond the possibility of restoration”?  Those parts and components are defense articles in Category I(h) and each and every one of them needed to be sledgehammered beyond the possibility of restoration. That’s a lot of sledgehammering, and it seems to me unlikely that actually happened before the Marines hopped onto their flights out of Yemen.

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Turkish Citizen Indicted For Foreign Downloads of Submarine Drawings

Posted by at 7:11 pm on September 17, 2014
Category: Arms ExportCriminal PenaltiesDDTCITARUSML

By U.S. Navy via [Public Domain]Alper Calik — a Turkish citizen and co-owner of Clifton, New Jersey based Clifmax LLC — has been arrested based on a criminal complaint, dated September 12, charging him, among other things, with violating the Arms Export Control Act by exporting without a license certain drawings relating to the NSSN (Virginia) class submarine. (And, no, I am not reporting this case simply because the company is named Clifmax, although that is, leaving the alleged criminal conduct aside, an awesome name for a company.)

At the heart of the allegations are two drawings that Calik downloaded from a DoD database after signing the Military Critical Technical Data Agreement which must be signed in order to gain access to the DoD drawing database at issue. The criminal complaint alleges that Calik downloaded these images while in Turkey and attempts to assert that Calik knew doing this was illegal because he had signed the Military Critical Technical Data Agreement.

However, the Military Critical Technical Data Agreement is hardly specific about what is or is not permitted with respect to the drawings, saying only this:

[The undersigned] acknowledge[s] all responsibilities under applicable U.S. export control laws and regulations (including the obligation, under certain circumstances, to obtain an export license from the U.S. Government prior to the release of militarily critical technical data within the United States) or applicable Canadian export control laws and regulations, and (2) agree[s] not to disseminate militarily critical technical data in a manner that would violate applicable U.S. or Canadian export control laws and regulations.

Suffice it to say that this certification is poorly drafted and confusing, mentioning an export license only in the context of releasing the data “within the United States.” Nor does the certification that he would not “disseminate” the data clearly prohibit him from downloading the information for his own personal review in a foreign country. Obviously, such downloads do in fact violate U.S. exports if the downloads include ITAR-controlled technical data, but this certification neither makes that clear nor establishes that Calik had the necessary criminal intent when he downloaded the documents

The complaint alleges that there were legends restricting export on the drawings involved, but does not quote those legends. Whether these legends are enough of a predicate to support the criminal intent necessary for conviction on the export charges depends on what those legends said and that remains to be seen.

UPDATE:  Two commenters make an excellent point about using the legends on the drawings as indicia of criminal intent: Calik would have only seen the legends after he downloaded the drawings in Turkey.  The significance of this point is magnified even further when you consider this statement from the criminal complaint:

Beginning in or around 2009 to the present time, ALPER CALIK downloaded approximately one hundred thousand drawings. some of which were subject to U.S. export control regulations without obtaining export licenses from the U.S. Department of State. ALPER CALIK was not in the United States when the majority of the drawings were downloaded.

At issue are only two of these one hundred thousand downloaded drawings, which would have revealed the legends only after being downloaded.  The overwhelming portion of the remainder of the drawings not having any indication that the downloading of these or other drawings might be problematic.

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It’s Good To Be The King

Posted by at 11:15 pm on June 24, 2014

Intersil Low Dose Irradiator via [Fair Use]Last week the Directorate of Defense Trade Controls (“DDTC”) announced that it had fined Intersil Corporation, a California-based manufacturer and developer of semiconductors and integrated circuits, $10,000,000 of which $6,000,000 goes to Uncle Sam and the remaining $4,000,000 goes to Intersil’s compliance program and remedial measures. Along with the fines, DDTC has required Intersil to jump through a number of now-typical compliance and re-education hoops, including appointing an ombudsman, hiring a special compliance officer, rewriting its compliance programs, engaging in audits, making frequent reports to DDTC and writing “I will not violate the ITAR” three million times on a blackboard after school. Well, of course, only the last item was not actually required.

According to the Proposed Charging Letter, Intersil incurred the ire of DDTC by classifying certain of its products as ECCN 3A001.a.1, 3A001.a.2, and EAR99 even though the items were radiation hardened and space qualified and, therefore, covered instead by USML Category XV(e). Why Intersil made this mistake is not revealed in the documents but since Intersil was applying for BIS licenses for the goods when required, it is hard to imagine that it was anything other than a good faith mistake (which is, probably, the reason why this information is omitted.) As a result, there were 3,152 unauthorized exports of Intersil’s products, although, due to the statute of limitations, only 339 exports were actually charged, with DDTC swearing left and right that although it couldn’t help mentioning the 3,152 exports it was paying absolutely no attention whatsoever to those in formulating the $10 million penalty.

But here is the most interesting part of the charging documents:

Several of the unauthorized exports were subsequently re-exported or retransferred without authorization due in part to the misclassification of the ICs.On August 20, 2010, a DDTC official misinformed Intersil that for any ICs that “HAVE already been exported under EAR jurisdiction, these [ICs] ARE NOT retroactively subject to the retransfer provisions of 22 CFR 123.9.: Intersil was further misadvised that Intersil did not need to inform its foreign customers to submit ITAR re-export authorization for these items and that this “decision to not retroactively aply USML controls for these already exported [ICs] will continue to be applicable even if a future formal CJ determination asserts USML controls apply.”

Interestingly, notwithstanding this bad advice, Intersil is charged with causing various unauthorized re-exports from, and retransfers in, foreign countries due to its misclassification of the integrated circuits. Whether or not any of these were the result, at least in part, of DDTC’s admittedly bad advice that the retransfer provisions would not apply to items exported under the EAR is not clear, but let’s give DDTC the benefit of the doubt and assume that these were all unrelated.

Even so, there is still an interesting moral to this story. Exporters who make mistakes have to pay large fines and engage in burdensome remediation activities. DDTC officials who make mistakes have to do, er, well, nothing at all because, well, you know, mistakes happen. As they say, it’s good to be the king.

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Praise the Lord and Pass on Exporting the Ammunition

Posted by at 8:15 pm on February 4, 2014
Category: Criminal PenaltiesDDTCUSML

U.S. Court of Appeals for the Fourth Circuit via [Public Domain]
ABOVE: Fourth Circuit Court of Appeals

The Fourth Circuit recently handed down a decision in United States v. Bishop in which it upheld the conviction of Brian Bishop, a U.S. foreign service officer, who was convicted of an attempted export of ammunition in connection with his move from his residence in Alabama to his post in Jordan. Bishop’s appeal centered on the knowledge requirement for an export conviction, arguing that he was unaware that the items he was exporting were on the USML. The Fourth Circuit held that specific knowledge that the items were USML is not necessary to support a conviction and ruled that the District Court had adequate evidence that Bishop knew that the exports were illegal.

The odd part of this finding is that Bishop had left the ammunition in the boxes in which the ammunition was purchased and which were clearly labelled “ORM–D” and “cartridges, small arms.” Indeed, the District Court relied on that labeling to acquit Bishop on charges of delivering ammunition to a carrier without notice in violation of 18 U.S.C. § 922(e). Generally speaking, criminal export cases almost always rely on mislabeling the goods as the most significant indicia of criminal intent, so this case is a bit of an outlier.

The evidence of Bishop’s intent relied on by the District Court, and upheld by the Fourth Circuit, seems pretty sketchy. The Fourth Circuit cited State Department training that Bishop received on the Foreign Affairs Manual, which states that shipment of ammunition is prohibited. The FAM cites 27 C.F.R. § 478 as authority for that prohibition and that regulation cites the Arms Export Control Act, although there is no suggestion that Bishop looked up the text of that regulation, not cited in the FAM, and saw its reference to the AECA. And, worse yet, the State Department employee who provided the FAM training to Bishop herself testified: “I can’t tell you what the State Department’s reasoning is” for prohibiting the shipment of ammunition.

The Fourth Circuit further cites an email from the moving company that Bishop’s wife received after the moving company had taken possession of the household effects stating that the shipment of the ammunition was illegal. This hardly seems probative of Bishop’s state of mind when he gave the ammunition to the moving company for export. Also cited by the Court was an inventory, prepared by the movers, which Bishop signed, and which did not mention the ammunition.  However, there was no evidence that he read the inventory carefully or noticed the omission. The worst evidence for Bishop is, perhaps, the fact that some of the ammunition was repacked by Bishop in boxes labelled “weights,” although it seems hard to rely on that when some of the ammunition remained in its original packaging and was clearly marked as ammunition.  Indeed, all of the evidence cited by the two courts cannot trump the simple fact that Bishop shipped the ammunition in clearly marked boxes.

Ironically, in a case that turns on knowledge of illegality, the court and the prosecutors themselves seem to be confused about what ammunition is and isn’t on the USML. Excluded from the AECA charges were “nearly 2,000 rounds of .45–caliber and 12–gauge shotgun ammunition.” These were only included in the count alleging delivery of ammunition without notice to a carrier. The 12-gauge shotgun shells are probably not Category III of the USML because shotguns with barrel lengths of 18 inches or longer are excluded from Category I. That ammunition would therefore be controlled under ECCN 0A984 and could be exported to Jordan without license. But .45 caliber ammunition is clearly covered under USML Category III, so it is odd that it was excluded from the count alleging the AECA violations.

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Back in the U.S.S.R.? Pleading Guilty to U.S. Export Violations May Get You Home

Posted by at 12:53 am on December 20, 2013
Category: Criminal PenaltiesDDTCGeneralITARUSML

By  Sgt. Scott M. Biscuiti [Public domain], via Wikimedia Commons

On Tuesday, Russian Roman Kvinikadze pleaded guilty in federal court in Wyoming to charges that he attempted to export thermal imaging weapon sights to Russia without a required license from the U.S. State Department.  Last month, we reported on Kvinikadze’s arrest and the charges brought against him as well as the Russian government’s criticism of the entire matter.  Kvinikadze’s plea is not a surprising development since, as we alluded to last month, an entrapment defense even under the most favorable circumstances is difficult to prove.

What is surprising, however, is how soon Kvinikadze may be leaving U.S. federal prison.  The Associated Press reported on Tuesday that the federal judge in Kvinikadze’s case said “immigration authorities intend to send Kivinikadze back to Russia.”  As we said last month, Kvinikadze’s best defense was not going to be in the courtroom but through diplomatic channels plied with the Russian government’s support.  Unlike a month ago, when the Russian human rights commissioner publicly decried Kvinikadze’s arrest, the Russian government has been quiet since Kvinikadze entered his guilty plea.

If Kvinikadze in fact returns shortly to Russia, the Department of Homeland Security, the agency which conducted the investigation into Kvinikadze, may be reconsidering the effectiveness of operations, like the one used against Kvinikadze, that engage foreign persons online to arrange for unlawful export transactions and entice them into travel to the United States to be arrested.  At a minimum, would-be U.S. export control violators abroad ought to think twice about meeting a potential business partner for the first time in the United States.  But more importantly, foreign governments may begin to join Russia in denouncing such U.S. policing of its laws around the world.  One of the aspects that have made U.S. investigations and law enforcement activities abroad of FCPA violations so successful in recent years is the U.S. cooperation with foreign law enforcement. Without such cooperation, the United States may see more guilty foreign criminals going home.

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