Author Archive


Jan

25

U.S. Implemented India Export Reforms Today


Posted by at 8:28 pm on January 25, 2011
Category: BISIndia

Love FestA Federal Register notice issued today implemented expected reforms which loosen certain controls on U.S. exports to India. The notice removed some, but not all, Indian companies and organizations on the Entity List, a list maintained by the Bureau of Industry and Security (“BIS”). All U.S. exports to countries on the Entity List require a license from BIS.

Today’s action removes nine organizations from the Entity List: Bharat Dynamics, Ltd., four subsidiaries of India’s Defense Research and Development Organization (“DRDO”) and four subsidiaries of the Indian Space Research Organization (“ISRO”). The Department of Atomic Energy entities that were on the list remain on the list. The major effect of the removal is that EAR99 items will no longer require licenses to the nine removed entities. Items with ECCNs that would otherwise require licenses to these entities will still require licenses for exports to these companies.

India was also removed from country groups D:2, D:3 and D:4 and added to country group A:2. This will, among other things, make certain license exceptions available for India such as License Exception APR for additional permissive re-exports as well as unaccompanied baggage under License Exception BAG.

Not surprisingly, Pakistan is irritated by all this and threatens to add to its nuclear arsenal to protect itself from a what it sees as a newly emboldened India that will result from these new export rules.

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Copyright © 2011 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Jan

24

ICE Trolls eBay, Stings Exporter, Obtains Guilty Plea


Posted by at 8:57 pm on January 24, 2011
Category: General

body armor plateA Tennessee man, Jerome Pendzich, offered body armor for sale on eBay and said in his listings that he shipped “worldwide.” Thereafter some intrepid ICE agents working the eBay beat convinced Pendzich to ship some NIJ Type IV small arms protective inserts to other feds in Bogota. Once Pendzich shipped the packages, which he labeled as gifts and ceramic plates, his home was raided and he confessed that he knew he needed an export license because the manufacturer of the plates had so informed him. Not surprisingly, Pendzich quickly negotiated a plea agreement.

One annoying aspect to the plea agreement is that it refers to the plates as “Level IV.” The United States Munitions List (“USML”), however, uses the same terminology as the National Institute of Justice standard, which is “Type IV.” Using the correct USML terminology might signal that the prosecutor might have looked at the USML at some point during his or her career. (Of course, it’s hard to get too worked up about this because the USML incorrectly refers to NIJ Types 1, 2, 2a, and 3a, instead of I, II, IIa, and IIIa as specified in the NIJ Standard.)

One other thing to note: ICE agents working the eBay beat probably don’t need to wear body armor while doing it.

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Copyright © 2011 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Jan

20

OFAC Adds Dead Man To SDN List


Posted by at 8:14 pm on January 20, 2011
Category: OFAC

Qari Hussain
ABOVE: Qari Hussain


Today the Office of Foreign Assets Control (“OFAC”) added Qari Hussain (a.k.a. Qari Hussain Mehsud) to its list of Specially Designated Nationals and Blocked Persons. U.S. individuals and companies are prohibited from engaging in any transactions with any person or entity on the SDN list.

Qari Hussain, according to this report, is blamed for organizing the December 2009 suicide attack on the U.S. operating center in Khost, Afghanistan, which killed seven U.S. employees of the CIA. He also recruited Faisal Shahzad, the wannabe Times Square bomber whose bomb fizzled in May 2010 and who is now serving a life sentence without possibility of parole.

It appears, however, that Hussain died on October 4, 2010, when he was blown up by a U.S. drone operating in North Waziristan. Although Hussain has been reported previously to have died in attacks that he in fact survived, this does not appear to be the case here. After his reported death in 2009, he called reporters to prove that he was alive. No such call has been made since the October 4 attack. Additionally, a “senior counter-terrorism official” as well as a high-level leader of the Tehrik-e-Taliban Pakistan, with which Hussain was associated and which initially denied reports of his death, confirmed to Asia Times Online that Hussain had died in the attack.

Although better late than never is not a particularly good rationale for putting someone on the SDN list, perhaps this is, to give OFAC the benefit of the doubt, a case of better safe than sorry given Hussain’s previous history of near-death experiences.

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Copyright © 2011 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Jan

19

Iran Sanctions Update


Posted by at 9:23 pm on January 19, 2011
Category: Iran Sanctions

Iranian proliferationIran sanctions seem to be all in the news this week, particularly with respect to who is and who isn’t selling stuff to Iran.

  • The Wall Street Journal ran an opinion piece that suggested that although Germany talks a good talk about Iran sanctions, it’s just that: talk. German exports to Iran increased by 5 percent between January and October 2010. In 2009, German authorized 16 exports of dual-use items to Iran, including protective suits that could be used in chemical weapons manufacture.
  • The Swiss have imposed additional sanctions on Iran, now finally prohibiting military exports in accord with UNSCR 1747. The new sanctions also target items that could be used in nuclear proliferation. Additionally, financial transactions with Iran are limited by requiring approval for transfers over a certain amount, imposing new restrictions on insurance and reinsurance for Iranian companies, and requiring additional due diligence in dealings with Iranian banks
  • Norwegian daily Aftenposten published a Wikileaks cable expressing concern by the State Department over Chinese exports to Iran of items that could be used in its missile program. The cable suggested that although the Chinese were doing a better job of controlling problematic exports to Iran, these efforts were being undermined by the Chinese federal government delegating some export decisions to provincial authorities which were more likely to put local economic interests ahead of interests in impeding Iran’s missile program.
  • A fascinating article in Sunday’s New York Times details the likely participation of the United States and Israel in the Stuxnet worm which crippled around 900 centrifuges used by Iran in uranium enrichment. The worm targeted a Siemens device that controlled the centrifuges, causing them to spin at a high rate that destroyed the equipment while sending a “man in the middle” message to the control panel indicating that the centrifuges were operating normally, thereby preventing the Iranians from shutting the centrifuges down until it was too late. Sources that examined the code of the worm indicated that the attack would only occur if 984 controllers were linked together, thereby limiting the worm from hitting the wrong target.

Moral of the story: a well-targeted cyber attack probably has done more damage to Iran’s nuclear program than economic sanctions and export controls.

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Copyright © 2011 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Jan

13

Man Accused of Attempting to Export F-5 to Iran Pleads Guilty


Posted by at 9:36 pm on January 13, 2011
Category: Arms ExportCriminal Penalties

F-5 Freedom FighterIn a previous post on the prosecution of Mark Knapp for his efforts to export a military surplus F-5 fighter jet to Iran, I criticized the apparent defense offered by Knapp’s attorney — that the F-5 could be shot down by U.S. fighter jets. Well, apparently Knapp and his attorney have come to their senses, and Knapp has now pleaded guilty to the charge relating to the fighter jet and other defense items that Knapp was attempting to export, including an ejection seat and a military radio.

Today’s news report indicates that Knapp was turned in by one of his customers who was caught attempting to export an ejection seat which he had bought from Knapp. Knapp’s attorney further added that Knapp began to sell his private collection of military gear after he was unable to find a job. Some of the items charged in the indictment, according to Knapp’s attorney, had been purchased by Knapp on eBay.

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Copyright © 2011 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)