ExportLawBlog

Archive for the ‘ITAR’ Category

Jan

26

Wanna Bomb a Taliban? There’s an App for That!

Posted by Clif Burns at 7:16 pm on January 26, 2011

Category: ITAR

Tactical Nav app You may think that the only really military application for your iPhone involves using a slingshot to launch some irritated birds at shelters harboring egg-stealing pigs, but you’d be wrong. Army Captain Jonathan Springer used $26,000 of his own funds to develop Tactical Nav, an iPhone app designed to assist soldiers on the field of battle to determine and relay accurate coordinates to other soldiers, whether for the purpose of accurately targeting a nest of Taliban fighters or in order to send medical aid to wounded U.S. forces.

Explaining Tactical Nav’s functions, Springer said it allows soldiers to map, plot and photograph navigational points on a battleground and coordinate efforts with supporting units. Another feature includes a night mode, which turns the screen to red for easier visibility.

Springer tested each of these features for accuracy, using a combination of military vehicles, remote observation posts and harsh combat conditions.

Pleased with the outcome of his efforts, Springer said, â€œWe took it from paper to what it is now â€¦ we’re very blessed and fortunate that is seems a good asset.â€

Springer expects the app to be in the iTunes store for sale in February.

So here’s the question. Will Apple get a visit from the folks at DDTC if someone who is not a U.S. citizen or permanent resident or who is not in the United States downloads this app? After all, it was specifically designed for battlefield use and was tested with battlefield equipment.

I haven’t fully thought through this issue, but my initial view is that the software may not be an ITAR-controlled item. Obviously, being designed or modified military use is not alone sufficient for an item to be on the United States Munitions List. The item must still be in a category set forth in the USML. Section 120.10 of the ITAR defines “technical data” to include software but only if “directly related to defense articles.” The iPhone itself isn’t a defense article. The only other time I see software called out specifically in the USML is category XIII for military cryptography, also not relevant to this app.

I haven’t fully analyzed this, so I could be wrong. Share your thoughts in the comments section.

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Jan

5

Census Blog Miffs Export Rules

Posted by Clif Burns at 5:15 pm on January 5, 2011

Category: DDTC • ITAR

Census Jobs Available This may look like U.S. Government blog week on ExportLawBlog, but it’s purely a coincidence. Yesterday we highlighted the Treasury blog and today the subject is the U.S. Census blog with the somewhat enigmatic title of Global Reach. Because not much was popping in the Census world — something I imagine is more or less always the case — the industrious bloggers at Census thought that they would educate their readers about the mysteries of defense exports and the International Traffic in Arms Regulations with a post* titled “Understanding Basic Directorate of Defense Trade Controls (DDTC) License Requirements.”

As you continue to file shipments against your DDTC license, your license will become â€˜decrementedâ€™ with each additional filing. This simply means that your license balance will decrease by the value of each accepted shipment. When the license balance is fully exhausted, an informational message will be sent stating:

176 DDTC LIC NOW EXHAUSTED:

At this time, your company must apply for an amendment to add more value onto the license or apply for a new license.

Um, no. There is so much wrong with the statement quoted above, it’s hard to know where to start. But I’ll start with the statement that decrementing means decreasing the balance by the “value” of each accepted shipment. Decrementing reduces the remaining quantity and the remaining value, not just the remaining value. If you are entitled to export 5 widgets with a value of $50 and you export 5 with a value of $35, the quantity on your license is decremented to zero and the license is kaput. You can’t export $15 more of widgets. You’re done.

Second, you can’t amend a license to increase quantity or value. Section 123.25(c) of the ITAR makes that perfectly clear as to increases in licensed quantities. You need a new license for the additional quantities. This notice posted on the DDTC website indicates that a new license is needed to add additional value to the license.

Here’s an idea: in the unlikely event that DDTC ever starts a blog, it should agree that it won’t post anything on the procedures for challenging population estimates if Census agrees not to post anything ever again on the ITAR.

*The original post disappeared from the Census blog a little while ago, apparently after Census received one or more emails pointing out the howler in the post. Of course, thanks to the miracle of the Google cache, nothing ever really dies on the Internet, and the link to the Census post above is a link to it in the Google cache. In case that ever disappears, here is a pdf version of the post for posterity.

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Dec

20

Do As I Say Not As I Do

Posted by Clif Burns at 6:31 pm on December 20, 2010

Category: ITAR

ABOVE: NASA Computers Seized
by OIG

A report released earlier this month by the Office of Inspector General (“OIG”) criticized NASA’s efforts to control sensitive data when disposing of computers and other components of its IT systems. Significantly, the OIG found that computers from the Kennedy Space Center were being released to the public even though they still contained sensitive NASA data. One computer about to be sold to the public, pictured in the group to the right, still contained ITAR-controlled data relating to the Space Shuttle.

Of course, ITAR does not prohibit the release of ITAR-controlled data to U.S. persons in the United States. But it seems doubtful that NASA, which didn’t know this information was still on the computer, had procedures in place to assure that the computer was only transferred to a U.S. citizen or legal permanent resident inside the United States. It’s hard for the government to insist that private companies assure that ITAR-controlled technical data isn’t illegally exported when companies dispose of their own equipment when NASA doesn’t take steps to guarantee that the government won’t inadvertently export such data.

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Jun

24

Registration Follies

Posted by Clif Burns at 9:59 pm on June 24, 2010

Category: DDTC • ITAR • Part 122

Under Scrutiny Regular readers are no doubt familiar with this blog’s occasional posts poking fun of press releases from defense manufacturers noting that the company had “achieved” registration with the State Department’s Directorate of Defense Trade Controls (“DDTC”). A common feature of many of these press releases is to try to portray registration under Part 122 of the International Traffic in Arms Regulations as an endorsement by DDTC of the company’s export compliance expertise and procedures.

Well, I think a new bar was set by this press release from Virginia-based Zestron Corporation

ZESTRON process and service solutions, recently renewed its official International Traffic in Arms Regulations (ITAR) registration with the US Department of State, Directorate of Defense Trade Controls.

After several weeks of careful review of ZESTRON’s corporate structure, security, record keeping and procedures for handling sensitive military and intelligence applications, the company successfully passed the system’s strict requirements. The renewal of this registration demonstrates that ZESTRON is dedicated to adhering to the regulations that control the export and import of defense-related articles and services on the United States Munitions List.

Honestly, that doesn’t just take the cake. It takes the table the cake is on, the house where the table is, and the city in which the house is located. There is no scrutiny by DDTC of corporate structure, much less “several weeks” of such scrutiny. Nor is there any review of a company’s procedures for handling military and intelligence applications. And don’t get me started on the import business in the press release. The only strict requirement that a registered company has passed is that it was able to fill out the registration form correctly and submit it with the required fee.

Here’s a new export reform proposal: the DDTC should revoke the registration of any company that issues a press release incorrectly describing the significance of registration.

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Oct

23

ITAR? What’s An ITAR? Is It Like an iPod?

Posted by Clif Burns at 1:33 pm on October 23, 2009

Category: DDTC • ITAR • Part 129

Military Hovercraft

Psst. Have I got a deal for you. For only $65 million you can be the owner of a military landing hovercraft — complete with guns, compartments for three tanks, space for 170 troops and nuclear and CBW shelters. It can be yours in just 4-5 months and will ship from Eastern Europe. And it’s for sale on the website of Portland Yacht Sales, which bills itself on the site as engaged in “International Yacht and Ship Brokerage.”

To be clear, of course, I’m not really trying to promote the sale of this landing vehicle to any of my readers. In fact, you’ve probably guessed that my reason for bringing up this unusual web offer would be to wonder whether the State Department’s Directorate of Defense Trade Controls (“DDTC”) has thrown the book — or rather thrown Part 129 of the International Traffic in Arms Regulations (“ITAR”) — at Portland Yacht yet.

Part 129 requires that companies acting as brokers of defense articles — and this is pretty clearly a defense article under USML Category VI(a) — must register with DDTC, and I have a sneaking suspicion that Portland might not have done that. But there’s more. There is that pesky requirement that you have to obtain a license from DDTC before you can broker “significant military equipment” (“SME”) valued at more than $1 million. Category VI(a) naval vessels are clearly defined as SME and $65 million is more than a few dollars north of $1 million. And I’m guessing that Portland doesn’t have the brokerage license either.

I’m sure that Portland Yacht will say it never even heard of this ITAR-thingy and never dreamed in its wildest dreams that selling a $65 million dollar vessel with anti-aircraft artillery, nuclear shelters, and room for 3 tanks and 170 troops to foreign governments would be, er, subject to some silly regulations. I mean, really, it’s not that different from selling an SUV to the French Embassy, right?

[Hat tip to reader Garrett Steele for pointing this sale out to me.]

UPDATE: Portland Yacht took down the webpage offering the military hovercraft for sale. We took a pdf snapshot of the page before it disappeared, which you can see by clicking here.

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