Twitterfeeds of Note from the BIS Update

Unfortunately I didn't make it to the BIS update this year but I've been following some of the tweets sent by Doug Jacobson from his tradelawnews blog.  To follow his tweets, search for #Update2010 on twitter.  The BIS website also has some of the speeches presented at the update so far.

ITAR Amended to Allow Hand Carry of Technical Data in Certain Cases

Export Exemption for Technical Data - 22 CFR Part 125 - Effective August 27, 2010
Clarification of 22 CFR 125.4(b)(9)

This amendment covers technical data in whatever format, sent or taken by a U.S. Person who is an employee of a U.S. corporation or a U.S. Government agency to a U.S. person employed by that U.S. corporation or to a U.S. Government Agency outside the United States.

Section 125.4 Exemptions of general applicability.
* * * * *
(b) * * *
(9) Technical data, including classified information, and regardless of media or format, sent or taken by a U.S. person who is an employee of a U.S. corporation or a U.S. Government agency to a U.S. person employed by that U.S. corporation or to a U.S. Government agency outside the United States.  This exemption is subject to the limitations of Sec. 125.1(b) of this subchapter and may be only used if:
  (i) The technical data is to be used outside the United States solely by a U.S. person;
  (ii) The U.S. person outside the United States is an employee of the U.S. Government or is directly employed by the U.S. corporation and not by a foreign subsidiary; and
  (iii) The classified information is sent or taken outside the United States in accordance with the requirements of the Department of Defense National Security Program Operating Manual (unless such requirements are in direct conflict with guidance provided by the Directorate of Defense Trade Controls, in which case the latter guidance must be followed).
* * * * *

DDTC Published Details of Consent Agreement with Xe Services LLC

08/23/10: Today, the U.S. Department of State posted the details of the Consent Agreement with Xe Services LLC (aka Blackwater Worldwide).  This information can be found at the PMDDTC Website.

Available on the website are:

• A Draft (proposed) Charging letter that provides insight on disclosures, violations and charges  listed by the U.S. Government against Blackwater in this matter and steps to be taken should Blackwater receive a formal charging letter should the matter not be settled through a consent agreement pursuant to § 128.11 of the ITAR.;
• The Consent Agreement, detailing remedial and strengthened compliance measures that Blackwater will implement during the four (4) year period the agreement is in effect; and
• The Order that details the payment of the fines, the timeframe for payment and the disposition and potential suspension of a portion of the fine based on remedial compliance performance.

Summary:

• 288 charges for violations of the ITAR occurring over the course of several years, beginning in 2005 that were either voluntarily disclosed (15) or the result of State Department directed disclosures (16) including the unauthorized shipment of controlled items, technical data and provision of defense services and training.
• A Consent Agreement that will be in force for four (4) years requiring Xe Services (Blackwater) to appoint a Special Compliance Official to provide oversight of compliance activities, implement specific policies and procedures to meet compliance criteria and report to DDTC an accounting of such measures, provide for training of staff on a regular basis, implement an Automated Export Compliance System, audit and potentially adjust the compliance activities, and meet the proscribed penalties according to a specific timetable. 
• Pay:
• $6 million to the U.S. Department of State within 15 days;
• $6 million each year  to the U.S. Department of State over the next four years for a total of $24 million;
• Suspend $6 million in recognition of funds already applied to pre-Consent Agreement compliance activities; and 
• Suspend $6 million in recognition that Xe will apply these funds to post-Consent Agreement remedial compliance measures over a period of 48 months.

Blackwater Reaches Deal on U.S. Export Violations

Today, the New York Times carried a story by James Risen detailing an agreement between Blackwater Worldwide, now known as Xe Services and the U.S. Department of State.  Blackwater has agreed to pay $42 million in fines for hundreds of violations of United States export control regulations.  According to the story, violations included illegal weapons shipments to Afghanistan, making unauthorized proposals to train troops in the Sudan and providing sniper training for Taiwanese police officers.

The case has not yet been posted to the Directorate of Defense Trade Controls website so details on the specific charges and the agreement itself are forthcoming.

The article indicates that there was activities intending to hide the transfer of arms without authorization.  In such a case, section 22 C.F.R. 127.3 addresses the willful violation of the Arms Export Control Act (22 U.S.C. 2778 and 2779) where the violator can be subject upon conviction of a fine or imprisonment or both.  

With civil violations, a fine of up to $500,000 per occurrence can be levied along with denial of privileges to export or do business with the U.S. Government.  In case of criminal activity, the fines can increase up to $1,000,000 per occurrence with up to 10 years imprisonment.  We will have to wait and see which if any of the Blackwater executives wind up being convicted of willful violation and if convicted, the resulting penalties.

The complete article is available at the New York Times website, here.

ABC News: Wisconsin Woman Unwittingly Ships Military Hardware to Russia

Here we go again...  just recently we heard about a Plano, Texas woman that tried to ship night vision scopes to Russia in her boots.  Now we hear that a Wisconsin woman is duped into sending controlled items, including night vision goggles to Russia after being told they were clothes for orphans.  Be wary of those "work at home" job offers.  What a great story this is.

The full story, with video can be found on the ABC News/Technology site here:

Oh, those pesky Russians...

FBI: Fourteen Charged with Providing Material Support to Somalia-Based Terrorist Organization al Shabaab

On August 5, 2010, the FBI issued a press release indicating charges, indictments and arrests of persons suspected in providing material support to a known terrorist organization by funneling money to the al Shabaab terrorist organization.  Defendants in Alabama, California and Minnesota are suspected of providing money, materials and services to the Somalian group over a period of years.  The arrest adds to the growing number of naturalized U.S. Citizens involved with terrorist activities.

The complete article can be found on the FBI website here.

Amendment to ITAR: Commodity Jurisdiction

Federal Register: August 4, 2010 (Volume 75, Number 149)
Pages 46843-46844

On August 4, 2010 the Department of State released public notice 7075 in a Final Rule, Amendment to the International Traffic in Arms Regulations: Commodity Jurisdiction.

The announcement deals with the electronic submission of requests for commodity jurisdiction determination using the "Commodity Jurisdiction (CJ) Determination Form" (Form DS-4076).
This is a NEW form and is now available on the DDTC website (http://www.pmddtc.state.gov).  State indicates that information (exclusive of information identified as proprietary in Block 15) will be "used in DDTC's published Commodity Jurisdiction determinations list, to be available on the DDTC website."

This form must be electronically submitted to DDTC.  There are two important dates in play:

1. For 29 days after the effective date of this final rule (September 2), a request for a CJ may be submitted electronically or via paper;
2. After 30 days from the effective date (September 3), electronic submission is the only option.

Determination requests should be submitted via the D-Trade 2 system.

Sec. 120.4(c) was amended to eliminate the instruction to submit seven collated sets of supporting documentation.

Full text of the article can be found here: