Dec

14

Let My Field Trips Go


Posted by at 11:01 pm on December 14, 2015
Category: General

Full Lab Close by NSCL [By Permission http://www.nscl.msu.edu/about/nscl%20photos.html], via Flickr https://flic.kr/p/8hb7MU [cropped]
ABOVE: National Supercon-
ducting Cyclotron Laboratory


A Lansing high school field trip to Michigan State University’s National Superconducting Cyclotron Laboratory was just cancelled* and the school is blaming this on the Bureau of Industry and Security.  According to the school, the field trip was cancelled when the school received the permission slip from NSCL and saw this:

“I also certify that this minor is not a citizen/resident of Cuba, Iran, North Korea, Sudan or Syria.”

The school district superintendent said that she believed that the restriction violated Title VI of the Civil Rights Act which prohibits discrimination based on national origin.

Let’s start with that. They apparently don’t teach civics in Lansing. National origin and citizenship are different things. You can discriminate based on citizenship status but not on national origin. A naturalized U.S. citizen cannot be treated differently because he or she was born in Cuba or China or the Duchy of Grand Fenwick.

But going a little further, what’s up with this restriction? The NSCL apparently told the school that the restriction comes from the Bureau of Industry and Security. This means, given the singling out of nationals from AT countries, that something in the lab must be classified under one of the 990 series of ECCNs which are controlled only for AT reasons, and NSCL is concerned about giving access to that equipment by nationals of AT countries.

Indeed, the minor permission form that caused the brouhaha can be found here and does indeed have the quoted language. But the Tour Certification Form, also required by NSCL to be signed by the tour group, has this curious language:

I have made the members of the party aware that certain technology in FRIB/NSCL falls under fundamental research exclusions from export control within the MSU setting of a domestic research university, but is subject to control elsewhere.

If the concern is access to series 990 equipment, the fundamental research exclusion is irrelevant. Additionally, the notion that information that is fundamental research if disclosed at the university, but is not if it is disclosed elsewhere is just wrong. Once it is fundamental research, it is released from controls everywhere and to everyone. The information does not stop being fundamental research once it leaves the campus.

But more fundamentally, even if the lab equipment is controlled, would the NSCL be transferring technology to a bunch of high school kids that visited the lab? Remember that technology is defined as information required for the development, production or use of the equipment. Certainly, nothing that kids would see on a field trip would permit them to develop or produce the equipment. Nor would it likely help them to use the equipment given that “use” is defined as operation, installation (including on-site installation), maintenance (checking), repair, overhaul and refurbishing. Unless the high school kids could figure out how to operate the equipment after seeing it, there’s no way that they would be able to install, maintain, repair, overhaul or refurbish it.

So, I say, let the kids go — even if they are Cuban exchange students. Just make sure you don’t tell them how to install, maintain, repair, overhaul and refurbish the cyclotron (or whatever equipment is causing the concern) while they are there.


*WARNING: the newspaper requires you to answer an obnoxious survey in order to read the article.

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Dec

4

We’re from BIS and We’re Here to Help You


Posted by at 8:21 am on December 4, 2015
Category: BIS

By Daderot (Own work) [CC0], via Wikimedia Commons http://commons.wikimedia.org/wiki/File%3APatent_quote_-_United_States_Department_of_Commerce_-_DSC05103.JPGIn a laudable effort to increase transparency of its operations and processes, the Bureau of Industry and Security (“BIS”) has launched an initiative to release statistics and data on at least part of its operations. The new “data portal” can be found here. And although it’s clearly a work in progress, there are still some interesting factoids that can be gleaned from the “2014 Statistical Analysis of BIS Licensing” that appears there.

First, export control reform did not create a licensepocalypse. Many ill-mannered cynics (though not me, in this case) speculated that the onslaught of license applications for new 600 series items transferred from the USML would overwhelm BIS staff and result in a license tar pit from which fossilized approvals would emerge centuries, if not eons, later. The new figures however show a steady decrease in licensing times. Since 2010 average license processing times have decreased from 31 to 23 days even though the number of applications processed each year has increased from approximately 22,000 to 31,000. And, not surprisingly, the largest category of applications processed by BIS was the 600-series ECCN 9A610, which covers military aircraft and commodities.

Second, BIS grants the overwhelming majority of licenses that it processes. Of the approximately 31,000 applications processed in 2014, only 321 were denied with the remainder being returned without action or approved. The top items that were denied were, in this order, rifle scopes, encryption software, and EAR99 items. Although I understand rifle scopes and EAR99 items (for which licenses are required only when exported to bad people or for bad uses) being on this list, I am a bit baffled as to why licenses for 5D002 software receives so many denials. It’s not like there’s any real reason to control encryption software given that the U.S. (despite some self-delusions in this regard) does not have a monopoly on secure encryption technology.

Finally, I have just one little wish for the data portal. It would be tremendous if BIS would provide similar data on classification requests, particularly processing times. The classification process is just as important as, and in some instances even more important than, the licensing process. And I suspect that the processing time figures do not look quite as rosy as they do for licensing.

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Dec

2

We’re From the USDA and We’re Not Here to Help You (UPDATED)


Posted by at 11:59 pm on December 2, 2015
Category: OFACTSRAUSDA

USDA by Dlz28 via https://en.wikipedia.org/wiki/File:United_States_Department_of_Agriculture,_Jamie_L._Whitten_Federal_Building,_Washington_DC_(12_June_2007).JPG [Public Domain]Today’s post, brought to you by the United States Department of Agriculture, is yet another entry into the long and sad cavalcade of administrative incompetence that makes the life of exporters harder than it should be. If you have recently tried to export an “agricultural commodity” under the provisions of the Trade Sanctions Reform and Export Enhancement Act of 2000 (“TSRA”) you may have run into this problem. This would include trying to export an item relying on the general license in section 560.530 of the Iran Transactions and Sanctions Regulations which permits export of “agricultural commodities” without a specific license.

The first question is whether the item you want to export, say a container of wood clothes hangers, is an “agricultural commodity.” TSRA covers “agricultural commodities” which the statute defines as follows:

The term “agricultural commodity” has the meaning given the term in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602).”

Cool, that’s helpful. Let’s see how section 5602 the Agricultural Trade Act defines “agricultural commodity.” So, here’s that definition

The term “agricultural commodity” means any agricultural commodity, food, feed, fiber, or livestock (including livestock as it is defined in section 1471(2) of this title and insects), and any product thereof.

Awesome:  an ” ‘agricultural commodity’ means any agricultural commodity.” Your Congress at work. That’s why we pay them their salary and send them to DC to be wined and dined by lobbyists in expensive steakhouses.

Fortunately, OFAC’s TSRA application instructions tells you that you can figure out what is an agricultural commodity by going to www.fas.usda.gov and consulting a “list of agricultural commodities that qualify for export under the TSRA program.”

Now, if you actually believe that and go to the site mentioned looking for the list, no matter how well-honed your search skills are, no matter how strong the Google Force is with you, you will not find that list. It’s nowhere to be found. Of course, you might even remember having seen that list before, and you would be right.

What’s happened here is that some web geek at the USDA convinced the agency that it needed to redesign its website so, I suppose, it looks good on an iPhone or includes the latest CSS geegaw. And in this ridiculous process, no one at the USDA actually tried to figure out whether the new site was actually useful or retained vital information. Nope, looks good, they declared, and headed off to their cars or to Metro to start the long commute home to Virginia.

As a special service to our readers, and brought to you by the magic of the Internet Wayback Machine, here is a link to that list. We have uploaded the list to our server, so that it will remain available for your reading and licensing pleasure. And, yes, those wooden clothes hangers are agricultural commodities.

UPDATE:  An alert reader has more of the Google Force with him than I do and managed to locate the elusive agricultural commodities list on the Department of Agriculture’s website. It’s here.  You’d think that OFAC would say more in its application instructions that the list can be found somewhere on www.fas.usda.gov, but, of course, you’d be wrong.

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(No republication, syndication or use permitted without my consent.)



Nov

24

Egyptair Shot Down by BIS for Sudan Airways Lease


Posted by at 9:58 pm on November 24, 2015
Category: Sudan

Tasty Meal on Sudan Air via http://www.sudanair.com/uploads/photos/97226DSC00043.JPG [Fair Use]
ABOVE: A Tasty Meal on
Sudan Air


Today the Bureau of Industry and Security (“BIS”) announced that Egyptair has agreed to pay a penalty of $140,000 to settle charges that Egyptair leased two Boeing 737-566 commercial aircraft to Sudan Airways.  The penalty is payable in four equal installments every three months starting on February 1, 2016. The Settlement Agreement further provides that should Egyptair not make any of these payments in a timely fashion, BIS can enter a one-year export denial order. Since such an order, which would forbid any U.S. person to export any item to the airline, would be a one-year kiss of death, it seems likely that Egyptair will make each $35,000 payment in a timely fashion.

It was hardly a secret that Egyptair had leased these aircraft to Sudan Airways. BIS hardly had to use its secret decoder rings and shoe phones to uncover the deal. It was publicly reported in various aviation databases such as this one here. The highly public nature of the transaction also suggests that Egyptair thought the lease was permissible and simply was unaware of the meglomaniacal position of BIS and the U.S. government that the U.S. has jurisdiction over anyone anywhere in the world who touches any item that was ever in the United States.

One more thing: Sudan Airways is on the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control, so it should not be too long before OFAC chimes in and gets more cash from Egyptair for leasing these aircraft not just to Sudan but to an SDN in Sudan.

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(No republication, syndication or use permitted without my consent.)



Nov

19

BIS Imposes Controls on High-Tech Cloaking Material


Posted by at 7:57 pm on November 19, 2015
Category: BIS

XBS Epoxy System Demo via http://www.spacephotonics.com/Coating_Glob-top_Cavity_Fill_X-Ray_Blocking_Anti-Tamper_Material.php [Fair Use]On Monday, BIS announced in an “interim final” rule (a top contender for the best oxymoronic regulatory phrase ever) imposing export controls on Harry Potter’s invisibility cloak as well as on tarnhelms, the predecessor technology to the invisibility cloak.   Actually, the control, which was effective immediately upon publication, was placed on a high-tech equivalent of those two items, namely, XBS epoxy systems.

The website of Space Photonics, which is the apparent developer of this technology, explains the technology.  According to that website, XBS epoxy systems are

proven effective in obfuscation of critical technology components against X-Ray and Terahertz Microscopy imaging attempts … developed to conceal critical components from adversaries.

The picture on the left is a visual demonstration of the technology.

One interesting issue of an immediately effective “interim final” rule is a simple commercial issue. Suppose one of the systems was in transit on the date of publication. If it crossed the U.S. border after the rule was published, did the exporter violate the law? The rule has no grandfathering or savings provision, so the apparent answer would be that the exporter did violate the law and could be subject to civil penalties. It seems doubtful that BIS would fine someone in that situation, but it’s hard to see why the immediately effective rule did not address this issue rather than throw any such exporters on the presumed mercy of BIS.

Because it is an “interim not-yet-final but almost and pretty much but not quite final rule,” BIS will permit comments on the rule until January 15, 2016, after which BIS will presumably issue the “final and we really mean final this time final” rule.

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