Archive for September, 2010


Sep

30

Senate Approves UK and Oz Defense Cooperation Treaties.


Posted by at 11:55 pm on September 30, 2010
Category: Arms ExportGeneral

FlagsYesterday, the U.S. Senate, by division vote, approved the Defense Trade Cooperation Treaties with Britain and Australia. Under a division vote, Senators stand or raise their hands to vote but the numbers of votes and who voted “aye” or “nay” are not recorded. I guess there must be an election coming up or something.

Identical implementing legislation was passed by both the Senate and the House, again without recorded votes, and now await the President’s signature, which is expected shortly. Section 104(a) of the implementing legislation still requires Congressional notification of exports under the treaty that meet the $14 million and $50 million notification thresholds in 22 U.S.C.§2753(d)(3)(A) even though they will no longer be required to be licensed under the treaties. Section 102 of the implementing legislation also defines those defense articles, principally items related to rockets and rocket systems that will not be exempted from license requirements under the treaties.

Many details, including the companies that will be eligible to participate, still remain to be worked out.

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Sep

29

Wednesday Export Law Grab Bag


Posted by at 8:28 pm on September 29, 2010
Category: BISIran SanctionsOFAC

Grab BagNo big news today, so it’s time for another Export Law Blog grab bag:

  • In connection with President Obama’s upcoming trip to India, negotiators for India are demanding the removal of the Indian companies that are on the Entity List maintained by the Bureau of Industry and Security (“BIS”). Given the prior history of some of these entities trying to obtain U.S. exports illegally notwithstanding their presence on the Entity List, I’d call this demand a long shot.
  • The Office of Foreign Assets Control (“OFAC”) issued a final rule yesterday implementing the import ban provisions of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (“CISADA”). As expected, the general licenses for imports of Iranian foodstuffs and carpets were removed from the Iranian Transaction Regulations. Relying on the regulatory exception power granted to OFAC in section 103(d)(1) of CISADA, all general licenses other than those for foodstuffs and carpets, such as the general license for household effects, remain in effect.
  • Congressman Dale Kildee, Sen. Carl Levin and Sen. Debbie Stabenow from Michigan on Tuesday sent a letter to BIS asking it to reverse a decision denying Michigan-based B&P Process Equipment a license to export an industrial vertical mixer to Taiwan. The mixer, which can be used to mix rocket fuels, has raised concerns by BIS that “the export presents an unacceptable risk of contributing to activities detrimental to U.S. foreign policy, including our missile nonproliferation interests.” The Senators and Representative argue in their letter that if B&P is not allowed to export the equipment, a foreign company will sell its own similar equipment to the company in Taiwan. My guess is that the BIS objection is really coming from the Department of Defense and that the Congressional letter will have about as much effect on the DoD’s position as a toy pistol fired at an aircraft carrier.
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Sep

28

“The scent of bitter almonds always reminded him of the fate of unrequited love . . .”


Posted by at 8:21 pm on September 28, 2010
Category: BIS

cyanideMassachusetts-based New England Trading Global Inc. (“NET Global”) recently agreed to pay to the Bureau of Industry and Security (“BIS”) a $365,000 suspended penalty in connection with thirteen unlicensed exports of sodium cyanide and potassium cyanide worth $242,779 without a license to Israel. The fine was suspended on condition that the company not engage in any export violations for a period of one year. According to the settlement documents, the company voluntarily disclosed the exports to BIS.

Sodium cyanide and potassium cyanide are classified as ECCN 1C350.d.17 and 1C350.d.12 respectively. Given the legendary toxicity of both substances, this should come as a surprise to no one, particularly to a company that sells chemicals. So one can only speculate how NET Global wound up shipping more than 100 tons of cyanide without a license. Whatever happened, it had to be, at best, a massive failure to implement compliance procedures and the company should thank its lucky stars that the penalty in this case was conditionally suspended.

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Sep

27

Further Details on Ardebili Sting


Posted by at 8:49 pm on September 27, 2010
Category: Criminal PenaltiesIran Sanctions

Amir Ardebili
ABOVE: Amir Ardebili
mugshot


All of the installments in the outstanding series on the Ardebili case under John Shiffman’s byline at The Philadelphia Inquirer have now been published, and each article is a treasure trove of new information about the case. Although I’m going to highlight a few interesting things revealed by the series, don’t let that deter you from reading the whole thing. There is much more to be learned in the articles than I have the time and space to cover here.

When Ardebili was released from jail in Georgia, he was whisked back to the U.S. on a Gulfstream IV that cost the United States $300,000 to rent. While on the way back, one of his interrogators from Immigration and Customs Enforcement lied to him:

You have a right to an attorney. While you can have an attorney paid for by the Iranian government, you should be careful, because that lawyer will probably report everything you say back to Tehran. You tell the Iranian lawyer the wrong thing, and it might endanger your family.

Because, of course, such a lawyer would readily violate attorney-client privilege to endanger his or her client’s family

Once Ardebili was in the United States, the U.S. government not only threw him into solitary confinement, but also they gave him a fictitious name to conceal what had been done. When an Ardebili relative in the United States was approached by Ardebili’s family in Iran, he hired Ross Reghabi, an Iranian-American lawyer in Beverly Hills, who assured the family that he could find Ardebili if he was here:

Reghabi was not a criminal lawyer. He specialized in family and business matters, and taught an advanced accounting class at the University of California, Los Angeles. But he knew enough to assure his friend that the U.S. government did not routinely hold people in secret confinement.

Don’t worry, he said. This is America, not Iran. Laws and procedures must be followed. People don’t just disappear.

Well, perhaps that was true at one time. It certainly wasn’t any longer.

So why was Ardebili in solitary confinement under an assumed name? Because the U.S. government had assumed his identity and was continuing to negotiate with the U.S. companies that had been approached by Ardebili. They found hundreds of contacts on Ardebili’s computer. And they planned on keeping Ardebili in the hole forever, if they had to, until they had run down all their contacts. And, according to the article, around 100 U.S. companies are still under investigation based on leads from Ardebili’s computer.

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Sep

23

From the Department of Creative Press Releases


Posted by at 7:43 pm on September 23, 2010
Category: BIS

Extra! Extra!Regular readers of this blog are familiar with our occasional posts on press releases from companies boasting that they have “achieved” registration with the Directorate of Defense Trade Controls (“DDTC”) and that this means that they have been certified as being export geniuses in complete compliance with every provision of the International Traffic in Arms Regulations. The joke is, of course, that registration means no such thing anymore than an entry on LinkedIn means that the person will be a good employee.

Well, along that line, today’s post is on an exporter’s press release — but not one about DDTC registration. Rather, it’s one about an export classification decision by the Bureau of Industry and Security (“BIS”) which ruled that a telecommunications component was EAR99. Now you might think that this meant simply that the component could be exported without a license, but someone in the company’s executive offices was not happy to spend all that money on Washington lawyers without wringing some more out of the BIS decision:

“This is significant,” states Robert W. Phillips, President of StratoComm. “It validates StratoComm’s premise that the TTS is the telecommunications infrastructure solution for all developing countries of the world.”

It also means that the solution can be used to cure every known disease, end poverty, pick every winning race horse in advance, teach pigs to sing and get the Cubs to the World Series.

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