Author Archive


Oct

3

Shutdown Blues


Posted by at 6:52 pm on October 3, 2013
Category: General

Based on photograph By Daderot (Own work) [CC0], via Wikimedia Commons http://commons.wikimedia.org/wiki/File%3APatent_quote_-_United_States_Department_of_Commerce_-_DSC05103.JPGMore on the 2013 shutdown and export issues:

Commerce: BIS yesterday updated its website to inform exporters that the SNAP-R licensing page was closed until the government shutdown is ended. Emergency license applications will be accepted but only if justified on grounds of national security. It is probably safe to say that your need to export cattle prods to Estonia won’t meet that standard.

Treasury: News reports (like this one) indicate that the offices of OFAC have been pretty much emptied out by the shutdown. The folks on the Hill are lamenting that these means that OFAC won’t be deterring Iran from its nuclear ambitions. No one seems to mention that it also means that means that medicines and medical devices not covered by the general licenses but eligible for specific licenses won’t be making it to Iran. No big surprise there, I suppose.

State: DDTC is still saying it has staff through Friday, October 4, and only emergency licenses after that.

With export licensing and classification decisions shut down for the duration, you have to wonder whether the result of the Shutdown of 2013 will be a bumper crop of voluntary disclosures in the same way that there was a bumper crop of babies after the Great Blackout of 1965*

*Yes, I know that’s an urban legend.

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Copyright © 2013 Clif Burns. All Rights Reserved.
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Oct

2

Fun Furlough Facts


Posted by at 11:07 am on October 2, 2013
Category: BISCuba SanctionsDDTCOFAC

Based on photograph By Daderot (Own work) [CC0], via Wikimedia Commons http://commons.wikimedia.org/wiki/File%3APatent_quote_-_United_States_Department_of_Commerce_-_DSC05103.JPGSo, you may be wondering which export agencies are up and which are down now that the Federal Government is shutdown. The answer isn’t altogether clear at this point (still!) but here is what appears to be the current rundown of things.

Treasury. The license application page is down with a note saying that licenses won’t even be accepted during the shutdown. If you need to file a TSRA or other license, you’re just going to have to wait until the government is open even to file the license.

State. Normal operations at least through Friday, October 4. After that, licenses will be accepted and acted on only in emergency situations.

Commerce. Crickets, as they say. Nothing but the sound of crickets from that corner. The BIS website makes no mention of the shutdown which means either it’s business at usual over at BIS (not very likely) or that they are so shut down they can’t even post something on the front page of their website.

USITC. Looking for the correct HTUS code to put on an AES form? Too bad. The online version of the Harmonized Tariff is down for the duration. Now aren’t you sorry you didn’t print out all 3,456,732.12 pages of it?

Radio Marti. Well, you can’t get a license to send food to Cuba during the shutdown, but the federal government has decided that propaganda is an essential service, and Radio Marti broadcasts to Cuba will continue unabated, shutdown or not. Apparently, the Cubans need to hear about our shutdown which proves that we’re a free country or something like that. Of course, Cuba’s jamming operations are also unaffected by the shutdown, so mostly the broadcasts to Cuba will be about as effective as they always have been.

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Copyright © 2013 Clif Burns. All Rights Reserved.
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Sep

27

Treasury’s Bore


Posted by at 1:23 am on September 27, 2013
Category: OFAC

Treasury's War Cover [Fair Use]Juan Zarate’s new book on OFAC, Treasury’s War, is a crashing bore and I have to admit that about half way into it I gave up. Zarate had taken my money to buy the book; I wasn’t going to let him take any more of my time as well.

I wanted to like Zarate’s book. Zarate was Assistant Secretary of the Treasury for Terrorist Financing and Financial Crimes during the Bush Administration, and I hoped that his book would provide interesting details on OFAC’s enforcement activities during his tenure. Instead, the book is mostly a lengthy self-encomium where Zarate depicts himself as a modern-day Elliot Ness who risked life and limb as one of Treasury’s “guerillas in gray suits.” Yes, he actually used that phrase. He also breathlessly relates a corkscrew landing he made (or more accurately the pilot made) during a trip to Afghanistan.

Most of the problem with the book is its deadly repetitiveness. The book might be a useful drinking game if you had to drink a shot every time Zarate says that terrorists need money, mentions Elliot Ness or describes the conference room where a meeting took place (Civil war currency on the wall! Historical artifacts such as silverware!  Mahogany conference tables! Views of the South Lawn!). I really began to suspect that Zarate was being paid by the word. We hear that one of his colleagues “looked like he belonged on the cover of GQ magazine.”

Not surprisingly, the book is also a completely uncritical look at OFAC’s activities after September 11. Zarate defends the controversial “80/20” rule for blocking assets when the agency only had 80 percent of the evidence needed to decide whether assets should be blocked. He complains about the reorganization that created the DHS and how it took away Treasury’s “guns and badges.” (The ghost of Elliot Ness appears again.) He also paints Richard Newcomb as a chief player in the war against terror notwithstanding that the former director of OFAC resigned on heels of criticism after OFAC told Congress in 2003 that OFAC “had just four full-time employees dedicated to investigating Osama bin Laden’s and Saddam Hussein’s wealth while nearly two dozen were working on Cuban embargo violations.”

There is only one interesting tidbit that I found before I gave up on the book, and it doesn’t reflect well on Zarate. During his discussion of efforts of OFAC to slurp up SWIFT data, Zarate reveals that in order to protect the sensitivity of this effort, they used the code name TURTLE for SWIFT. Who would have imagined that a reference to some financial resource named Turtle might in fact be a reference to SWIFT? No one. Not in a million years.

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Sep

18

Say It’s Not So, Joe


Posted by at 6:37 pm on September 18, 2013
Category: General

Joe Wolverton via http://www.youtube.com/watch?v=fibBySJm5Po [Fair Use]
ABOVE: Joe Wolverton II J.D.

Various press reports have suggested that the White House recently waived restrictions on providing arms to the Syrian rebels, but a review of the Presidential Determination itself reveals something much more limited.

In fact, the determination waives portions of the Arms Export Control Act but only to authorize a specific transaction providing defense articles to “vetted” members of the opposition and to NGOs in Syria. The defense articles are described as those “necessary for the conduct of … operations inside or related to Syria, or to prevent the preparation, use, or proliferation of Syria’s chemical weapons.” Who the “vetted” members are is not specified nor are the particular articles involved detailed.

Significantly this is not a general waiver but is a waiver only with respect to one specific contemplated transaction. Defense companies do not now have a blanket license to ship their wares to the Syrian opposition.

My favorite comment on the affair comes from one “Joe Wolverton II J.D.” writing for something called “The New American.” Joe Wolverton II J.D. offers up these comments in an article with the catchy headline “President Breaks Arms Export Laws to Send Shipments to Syrian ‘Rebels'” Apparently one of the things Joe Wolverton II J.D. failed to learn as part of getting the right to append J.D. to his name is that it is a good idea to read a law before declaring that someone, particularly a President, has broken that law.

Section 40(g) of the Arms Export Control Act, 22 U.S.C. § 2780(g), the “broken” law in question, specifically gives the President to waive the provisions of the Act with respect to a specific transaction if he finds that the waiver is “essential to the national security interests of the United States” and he makes the requisite report on the waiver to Congress. The determination makes that finding and directs the Secretary of State to make the required report to Congress. So, in the matter of proper interpretation of the Arms Export Control Act, the score is White House 1 and Joe Wolverton II J.D. 0.

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Sep

12

I’m Going to Disney World!


Posted by at 11:46 pm on September 12, 2013
Category: Arms ExportCriminal Penalties

You may think of “I’m Going to Disney World!” as an iconic slogan from a Superbowl ad, but in many cases they are instead the famous last words of foreign export defendants. Consider Sergei Baltutski, a Belarusian, who said this last April before taking his family on a trip to Disney World. Problem is, Mr. Baltutski had been having fellow Belarusians in the United States ship to him in Belarus military night vision purchased from eBay, and he got nabbed at the airport on his way to see Mickey and friends. Worst. Vacation. Ever.

Baltutski pleaded guilty, and his sentencing hearing took place recently in Philadelphia. According to his lawyer, the items, approximately $700,000 worth of night vision, were simply used by Belarusian hunters to bag wild boar which, apparently, mostly run at night. Who knew there were that many wild boar, and that many hunters, in Belarus? The sentencing hearing has been deferred a few weeks to permit Baltutski’s lawyers to prepare their boar argument to counter the prosecution’s request for higher sentences based on the potential harm to national security posed by Baltutski’s exports.

One interesting detail, provided in this news report, is that Baltutski’s accomplices sent some of the night vision to him through the Belarusian diplomatic pouch. Say what? The Belarusians are permitting illegal exports of defense articles via their diplomatic pouch? It seems to me that if the government is serious about the threat of these exports, somebody needs to have a long talk with the folks at the Belarusian Embassy. The Vienna Convention probably prohibits prosecuting anyone in the Embassy, but it doesn’t prevent putting the folks involved on a plane back to Belarus

Baltutski’s case is missing from Pacer, but here’s the indictment of his co-conspirators.

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Copyright © 2013 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)