ExportLawBlog

Apr

21

Texas Judge Indicted For Illegal Firearm Exports

Posted by Clif Burns at 10:38 pm on April 21, 2015

Judge Tim Wright [Credit: Williamson County][Fair Use]

ABOVE: Judge Tim Wright

Well, it is probably safe to say that not many (if any) judges have been indicted on allegations of illegally exporting firearms. But that’s what happened to Judge Tim Wright, a judge in Williamson County, Texas, who was charged with various firearm charges, including illegal exports of firearms. There are few details in the indictment beyond alleging that Judge Williams, which the indictment rather oddly insists on calling “Timothy L. Wright, III, aka ‘The Judge,'” sold guns to a person without an export license knowing that the guns were intended for export.

This is a strangely odd locution: it alleges that Judge Wright knew that the guns were for export but does not allege that the Judge knew that the purchaser did not have an export license or that the Judge knew that his sale or the export were illegal. This probably explains why Judge Wright was charged under the Anti-Smuggling Statute, 18 U.S.C. Â§ 554, and not under the Arms Export Control Act, 22 U.S.C. Â§ 2278. There is well-established precedent under the Arms Export Control Act that a conviction can only be had if the defendant knew that his export was in violation of law. On the other hand, it appears hat prosecutors believe, as I have said previously, that they can establish a criminal violation of 18 U.S.C. Â§ 554 simply by proving the defendant knew that the item was to be exported without any requirement that they prove he knew that the export was illegal.

Whether a court will send someone to jail on such a flimsy showing of criminal intent remains to be seen.

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Copyright © 2015 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Apr

16

Thursday Grab Bag

Posted by Clif Burns at 8:05 am on April 16, 2015

Category: Crimea Sanctions • Criminal Penalties • Cuba Sanctions • Iran Sanctions • OFAC • Sudan • Syria

Grab Bag Here are a few recent developments that you may have missed:

Last month we criticized the Department of Justice for conspiring with foreign luxury car makers to jail U.S. citizens who exported luxury cars to China to arbitrage the difference between U.S. and Chinese prices for these vehicles. Apparently, the DoJ now is having second thoughts about wasting taxpayer money and its resources on this nonsense. According to the Â NewÂ York Times, settlements have recently been reached in nine states where prosecutors have agreed to return seized cars to, and drop charges against, luxury car exporters. Good.
On Monday we reported that Obama was going to drop Cuba from the list of state sponsors of terrorism, a move we thought was largely symbolic. Yesterday he did just that, and provided the 45-day notice required under the three acts that provide the basis for the list: Â§Â 6(j)(4)(A)(i)-(iii) of the Export Administration Act of 1979; Â§ 40(f)(1)(A)(i)-(iii) of the Arms Export Control Act; and Â§ 620A(c)(1)(A)-(C) of the Foreign Assistance Act of 1961. The linked New York Times article wrongly states that Congress can block this action with a joint resolution. Only the Arms Export Control Act provides for this blocking mechanism, and, as we noted, there’s no way that the White House will remove Cuba from the current arms embargo. So a joint resolution under the AECA would be, like the removal itself, largely symbolic
The Office of Foreign Assets Control (“OFAC”) revised its rules on Monday to amend the Syrian Sanctions Regulations to permit certain activities with respect to written publications, including the ability to pay advances and royalties, to substantively edit manuscripts and to create marketing campaigns. These activities have been permitted for Cuba, Sudan and Iran since 2004. Don’t try this yet in Crimea which remains, bizarrely and incomprehensibly, the most heavily sanctioned place on the face of the planet

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Copyright © 2015 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Apr

13

White House May Take Cuba off Terrorism List

Posted by Clif Burns at 8:35 pm on April 13, 2015

Category: BIS • Cuba Sanctions • DDTC

Cuba - Havana - Car by Didier Baertschiger [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://www.flickr.com/photos/didierbaertschiger/11785935544[cropped]

There have been news reports suggesting that Obama is contemplating, as part of the thaw in U.S.-Cuba relations, to remove Cuba from the list of countries that are state sponsors of terrorism. Beyond the symbolic significant of such a move, what would be the real consequences?

Of course, one consequence of being on the list is that, under section 40 of the Arms Export Control Act, 22 U.S.C. Â§ 2780, any country put on the list of state sponsors of terrorism is automatically subject to an arms embargo. Of course, even if Cuba is removed from the list, I would not count on arms shipments from the U.S. to Havana in the foreseeable future.

Second, section 6(j) of the defunct Export Administration Act, 50 App Â§ 2405, requires a license for exports to state sponsors if the export could make a “significant contribution to the military potential of such country” or if it could “enhance the ability of such country to support acts of international terrorism.” And, in those instances, Congress must be given notice of such exports thirty days in advance. Of course, the Export Administration Act is no longer in force and is only even in the appendix to Title 50 of the U.S.C. because the President breathes life into it every year using the superpowers bestowed on him by the International Economic Emergency Economic Powers Act. So the White House could end any license requirement for Cuba and end the notification requirement using the same superpowers that resurrected those provisions in the first place.

You might also think that removing Cuba from the list might make it easier to ship agricultural products, medicine and medical devices to Cuba under the Trade Sanctions Reform and Export Enhancement Act of 2000. After all, the Act, in section 7205, imposes a license requirement for shipping those goods to a sanctioned country if that country is also on the state sponsor of terrorism list. However, that section specifically identifies Cuba as a state sponsor of terrorism and imposes the license requirement on exports of agricultural products, medicines and medical products to Cuba. So, removing Cuba from the terrorism list will not eliminate the need for exporters to Cuba to continue to file the export notifications required to utilize License Exception AGR for TSRA exports to Cuba.

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Copyright © 2015 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Apr

8

Customs Seizes $40 Worth of Ammunition; Breaks Arm Patting Own Back

Posted by Clif Burns at 8:25 pm on April 8, 2015

Category: DDTC • ITAR

Ammo Seized by Customs via http://www.cbp.gov/newsroom/local-media-release/2015-04-07-000000/cbp-seizes-ammo-slated-export [Public Domain - Work of Federal Employee]

ABOVE: Ammo Seized by CPB

It must be a slow day at CPB. They find and seize two 50-round boxes of ammo in a container of household goods on their way to Honduras and then issue a press release congratulating themselves on saving the United States from imminent destruction and doom. CPB Houston Port Director Dave Fluty could scarcely restrain himself:

These types of seizures represent our vigilance and commitment to protecting our nation by enforcing the laws and regulations on behalf of many other federal agencies.

Because, obviously, these 100 bullets would wind up in the hands of Honduran criminals who would sneak back into the United States with them and wreak havoc.

What makes the hoopla over 100 rounds of ammo even more interesting is that CPBÂ gets the law wrong:

Permanent or temporary export of ammunition via shipping container requires the exporter to register with Department of Stateâ€™s Directorate of Defense Trade Controls who [sic] has published a [sic] guidelines for firearms exports.

No, no and no. Section 122.1(a) of the International Traffic in Arms Regulations requires registration by any person “who engages â€¦ in the business of â€¦ exporting defense articles.” Section 123.17(e) permits the export without a license of up to 1,000 cartridges for nonautomatic firearms without a license provided that the cartridges are “for personal use and not for resale.” To say that this exception for limited ammunition exports for personal use can only be used by individuals who register as a business is not only wrong but absurd.

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Apr

3

Airbnb, Man, in Havana (Apologies to Graham Greene)

Posted by Clif Burns at 3:11 pm on April 3, 2015

Category: Cuba Sanctions • OFAC

Casa Espada airbnb listing via https://www.airbnb.com/rooms/5701299?s=yz00 [Fair Use] The revised Cuba sanctions created a general license for those providing travel services to authorized U.S. travelers to Cuba. The ink on the Federal Register notice was scarcely dry before room sharing service Airbnb had listings in Cuba up and running.

Of course, the remaining sanctions impose some unusual restrictions on Airbnb’s activities in Cuba. First, U.S. travelers still cannot go to Cuba for fun and mojitos; they must qualify for one of the existing general licenses, e.g., to visit family or do professional research in Cuba. Airbnb needs to get fromÂ each of its customers booking a stay in Cuba a certification of the particular section of the OFAC rules which authorizes them to travel to Cuba. These records must be maintained by Airbnb for five years.

Second, Airbnb may only provide these services to U.S. persons because the general license covers travel services for travel authorized by the Cuba sanctions. Those sanctions only authorize travel by U.S. persons, so Airbnb cannot book rooms for Canadians or Italians. (There’s an argument that “authorized” might also mean “not forbidden” which would allow Airbnb to serve non-U.S. customers, but, for the moment, Airbnb is taking the conservative position.)

Third, the new sanctions do not permit Airbnb to provide non-travel related services in connection with these bookings. So, Airbnb cannot help the Cuban “hosts” design their listing or edit their photographs. Even so, many of the listings look like interesting places to stay, even though hot water, Internet, and other ordinary amenities may well be missing. I could, for one, happily stay in the Havana apartment shown in the picture to the right — particularly at its listed price of $56 per night. Â And sometimes I think that not having access to the Internet on vacation might actually be a good thing!

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