Archive for 2010

More US Enforcement Actions against Chinese Nationals

2010/11/24

By: Danielle McClellan

Looks like the Sino-US relations aren’t going to be getting any better any time soon. Recently two Chinese nationals are awaiting extradition to the US from Hungary after being set up by US undercover agents and lured to Hungry to purchase microchips found on the Munitions List.

Hungarian authorities refused to let Xian Hongwei and his associate to access to the Chinese Embassy before the Hungarian court held a hearing, forcing them to accept a court appointed lawyer. The Chinese Embassy in Budapest has been quoted saying they are “doing our best” to protect the rights of the pair and are prepared to fight the extradition.

More information available at: http://www.newsdaily.com/stories/tre69q0og-us-china-usa-hungary/


Marsh Aviation Gets Indictment

2010/11/24

By: Danielle McClellan

Marsh Aviation of Arizona and owners Floyd Stilwell have been charged in an indictment after federal agents executed a search warrant in February 2008 unveiling military aircraft engines destined for the Venezuelan Air Force. The company exported the T-76 engines along with testing, repair, maintenance, modification, operation, and the training manuals and information.

The T-76 engine is designated on the US Munitions List, however Marsh Aviation falsely claimed that the engines were parts for civilian aircraft…it has not been cited what tipped off the ICE agents to the company’s illegal exports but I’m guessing they must have had hard evidence to secure a search warrant.

More information available at: http://www.ice.gov/news/releases/1011/101101phoenix.htm


Obama Announces Changes in US Export Control Policy for India

2010/11/24

By: John Black

The president recently announced that the United States will be taking steps to support and strengthen cooperation between the US and India. Prime Minister Singh and President Obama have agreed to a four part export control reform program that is designed to create a strategic partnership between the US and India.

The program is as follows:

1.      The US will support India’s full membership in the Nuclear Suppliers Group, the Missile Technology Control Regime, the Australia Group, and the Wassenaar Arrangement over time. India will adopt the regimes’ export control requirements.

2.      The US will remove the following India entities from the “Entity List”

  • Bharat Dynamics Ltd.
  • Armament Research and Development Establishment
  • Defense Research and Development Lab
  • Missile Research and Development Complex
  • Solid State Physics laboratory
  • Liquid Propulsion Systems Center
  • Solid Propellant Space Booster plant
  • Sriharikota Space Center
  • Vikram Sarabhai Space Center

3.      The US will “realign” India in the Export Administration Regulations (EAR), giving India treatment similar to close allies and partners such as the UK and Canada.

4.      BIS will take India out of Country Group D in the EAR, which will significantly narrow, but not eliminate, the US catch-all control prohibiting exports and reexports to missile activities in India.

5.      India and the US will expand dialogue on export control issues though the US-India Technology Cooperation Group on topics such as capacity building, best practices sharing and outreach within industry.

Overtime these changes are expected to facilitate trade in the civil space, defense and high technology sectors.

More information available at: http://www.whitehouse.gov/sites/default/files/india-factsheets/India-US_Agreement_on_Export_Controls.pdf


DDTC Name Changes, Mergers, etc. Notices

2010/11/24

DDTC has announced the following name and address changes:


Submitting a Letter of Intent vs. Purchase Order for Applications to DDTC

2010/11/24

By: John Black

The Directorate of Defense Trade Controls (DDTC) says the verification of purchase document to support applications may be a purchase order of letter of intent.  Recently, however, I heard that DDTC will not accept a letter of intent to support an application over $1 million.

I haven’t seen this in writing anywhere, which means that by the time you ever run into a situation where this is an issue, the unwritten rules and practices could have changed so many times that it will actually be OK to submit a letter of intent for an application over $1 million.


Obama Orders New Enforcement Coordination Center

2010/11/24

By: Danielle McClellan

President Obama recently released an executive order creating an interagency Federal Export Enforcement Coordination Center within the Department of Homeland Security. The center will coordinate matters related to export enforcement among the following:

*  The Department of State

*  The Department of Treasury

*  The Department of Defense

*  The Department of Justice

*  The Department of Commerce

*  The Department of Energy

*  The Department of Homeland Security

*  The Office of the Director of National Intelligence

*  Other executive branch departments, agencies, or offices as the President, from time to time, may designate

The center will have a director and full time staff who will serve to make the center the central point between all of the above departments when it comes to prosecuting violations of the US export laws. Watch out export violators…the Export Enforcement Coordination Center is coming…in a while.

More information available at: http://www.whitehouse.gov/the-press-office/2010/11/09/executive-order-export-coordination-enforcment-center.com


US BIS Extends “Temporary” Denial on Orion Air

2010/11/24

By: Danielle McClellan

On May 7, 2009 an Order Temporarily Denying Export Privileges for Orion Air, S.L. and Syrian Pearl Airlines was signed for 180 days and then was renewed on November 2, 2009 and has once again been renewed for an additional 180 days.

BIS signed the initial order after they had warned Orion Air that reexporting a BAE 146-600 aircraft to Syria to the Syrian Pearl Airlines would require a license. Orion assured the US Bureau of Industry and Security (BIS) that they would put the reexport on hold based on the US Government’s concerns. Despite telling BIS that the transaction was on hold Orion Air continued with the export of the BAE aircraft to Syrian Pearl Airlines in Syria—not necessarily a good idea. When BIS uncovered the illegal reexport the initial denial order was signed based on the fact that BIS argued that future violations are likely to happen based on the fact that Orion Air lied about reexporting the aircraft to Syria and they are likely to continue to do so about other reexports.

If any lesson can be learned from this denial order it’s that lying to the government is never a good idea…the denial order could be continuously renewed as long as the US government deems it fit , it’s a death penalty for any company.

Equally importantly, we see that “temporary” denial orders may be renewed an almost unlimited number of times, which gives BIS a powerful sanction.

Federal Register: http://edocket.access.gpo.gov/2010/2010-27351.htm


New DDTC Guidelines for Exports, Reexports and Retransfers to Iraq and Afghanistan

2010/10/28

By: John Black

More new guidelines for applications:  And, as you may have guessed, new doesn’t necessarily mean new and improved, at least not from the standpoint of the applicant.  There are streamlined application processing procedures for certain exports for the good guys in Afghanistan and Iraq, but to get the benefit of the streamlined processing, you have to do a lot more than simply reference Operation New Dawn (“OND”) or Operation Enduring Freedom (“OEF”).

To get all of the details of the specific application procedures and extensive requirements for supporting documentation, to: http://pmddtc.state.gov/licensing/documents/gl_OND-OEF.pdf


Are Your EAR Classifications Up to Date?

2010/10/28

By: John Black

The Bureau of Industry and Security (BIS) recently published a notice in the Federal Register revising or deleting 40 separate Export Control Classification Numbers (ECCNs) in the Commerce Control List.  BIS is making these wide-ranging changes to revise the CCL to implement the December 2009 changes it has agreed in the Wassenaar group to Wassenaar List of Dual Use Goods and Technologies.  Some of the changes are fairly substantive while others are clarifications.

BIS revised the following ECCNs:

1A001, 1A002, 1B001, 1C002, 1C006, 1C007, 1C008, 1C010, 1C011, 1E002, 2B006, 3A001, 3A002, 3B001, 4A001, 4A003, 4D001, 4D993, 4E001, 5A001, 5B001, 5D001, 5E001, 6A001, 6A005, 6A006, 6A008, 6C004, 6D003, 6E993, 7A005, 7B001, 7D003, 7E004, 9A001, 9A003, 9B002, 9D003, and 9E003.

BIS also removed ECCN 4D003.

If you are responsible for ECCN classifications, you should take a look at this change to see if there are new controls that impact your current classifications.

For details of the changes you can see the Federal Register notice at:

http://www.bis.doc.gov/news/2010/fr_09072010.pdf.

But it is not quite as simple as just checking that notice.  You have to also check a second Federal Register notice because on October 13, 2010, BIS published some corrections to errors made in the original Federal Register notice.  To see the corrections, go to:

http://edocket.access.gpo.gov/2010/pdf/2010-25554.pdf


Do You Want Answers to Your New Electronic CJ Questions?

2010/10/28

By: John Black

As you may know, you must submit electronically to DDTC all requests for a Commodity Jurisdiction (“CJ”) determination using the DS-4076 Commodity Jurisdiction Request Form.

To get the information on the electronic CJ requirements, go to:   http://pmddtc.state.gov/commodity_jurisdiction/index.html

For some CJ FAQs go to:  http://pmddtc.state.gov/faqs/commodity_jurisdiction.html