Archive for the ‘Vietnam’ Category

Update on Cote d’Ivoire, Liberia, Sri Lanka and Vietnam Embargoes


Effective November 4, 2016 the Bureau of Industry and Security (BIS) has amended the Export Administration Regulations (EAR) to implement changes in controls on the arms and related material to Cote d’Ivoire, Liberia, Sri Lanka, and Vietnam.  Cote d’Ivoire, Liberia, Sri Lanka, and Vietnam will be removed from Country Group D, this change means that the countries will no longer be subject to additional restrictions including de minimis US content, license exception availability, and licensing policies for specific items.

This final ruling has also added the addition of India as a member of the Missile Technology Control Regime (MTCR) which occurred on June 27, 2016.

The changes are:

  • Supplement No. 1 to part 738 ‘‘Commerce Country Chart’’ is amended by removing the footnote notation number 1 from ‘‘Cote d’Ivoire’’ and ‘‘Liberia’’
  • Supplement No. 1 to part 740, Country Group D, is amended by:
    • Removing the entries for ‘‘Cote d’Ivoire’’, ‘‘Liberia’’ and ‘‘Sri Lanka’’; and
    • Removing the ‘‘X’’ under column D:5 ‘‘U.S. Arms Embargoed Countries’’ for ‘‘Vietnam’’
  • Section 742.5 is amended by removing the clause ‘‘, and India as an MTCR adherent,’’ from the first sentence of paragraph (d)
  • Section 746.1 is amended by removing ‘‘Cote d’Ivoire (Ivory Coast),’’ and ‘‘Liberia,’’ from the list of countries in paragraph (b)(2)

Federal Register Notice:

It’s Pho Real! Obama Lifts US Arms Embargo on Vietnam


By: John Black

During his visit to Vietnam, President Obama announced that the US was lifting its long standing arms embargo on Vietnam.   While this may not result in an immediate flood of US weapons to Vietnam, it paves the way for US exporters and foreign companies who sell US military items to seek new, yet perhaps relatively modest, business opportunities in Vietnam.

On May 23, 2016, the Department of State’s Directorate of Defense Trade Controls announced is it ending its policy prohibiting the sale or transfer of lethal weapons to Vietnam.   DDTC said it will review on case-by-case basis applications for licenses to export or temporarily import defense articles and defense services to or from Vietnam under the International Traffic in Arms Regulations (ITAR). DDTC will soon publish a rule in the Federal Register to implement a conforming change to ITAR §126.1.

While the US Commerce Department’s Bureau of Industry and Security (BIS) has not yet officially announced it will make corresponding changes to the Export Administration Regulations (EAR) to remove the EAR/ ITAR-lite arms embargo on Vietnam, it is reasonable to assume that BIS will do so in approximately the same “soon” timeframe as DDTC’s ITAR change.

“The decision to lift the ban was not based on China… but on our desire to complete what has been a lengthy process moving towards normalization with Vietnam,” Obama said at a joint press conference alongside his Vietnamese counterpart President Tran Dai Quang.   A casual observer like me, however, cannot help but think that to a certain extent this US action is intended to send a clear symbolic, and perhaps tangible, signal to China in response to China’s recent empire expanding actions in the South China Sea including, for example, building a military air base on the Spratly Islands, which most of the world do not recognize to be Chinese territory.

Vietnam’s economy has been growing at an impressive rate compared to other countries in the region in recent years as it has begun to be a low cost manufacturing source that is taking some manufacturing opportunities away from China as Chinese manufacturing costs increase.  According to the latest CIA statistics, Vietnam has the 36th highest GDP in the world and its industrial production growth rate of 7.5% is the 15th highest in the world.  This is not to say that Vietnam soon will be cranking out  a high volume of low cost ITAR and EAR controlled military parts as it becomes a regional military manufacturing powerhouse.  It is unlikely that the US Government is prepared to approve the transfer of technology for the production of sophisticated military items to Vietnam anytime soon and equally unlikely that Vietnam has the capability to do so.  Nonetheless, this shift in US-Vietnam economic relations removes the US arms embargo as a cloud hanging over trade between the two countries and is another step in improving US-Vietnam relations.  Certainly too, some extent this enhances Vietnams status in the region.

North Korean Ruler Kim Jong-un was unavailable for comment.

State Department Amends ITAR to Allow Certain Defense Exports to Vietnam


By: Brooke Driver

Effective November 10, 2014, DDTC has revised the International Traffic in Arms Regulations to allow for case-by-case exports of lethal defense articles and services to Vietnam when in support of maritime security and domain awareness. The text of 22 CFR Part 126 has been revised accordingly:   (l) Vietnam. It is the policy of the United States to deny licenses or other approvals for exports or imports of defense articles and defense services destined for or originating in Vietnam, except that a license or other approval may be issued, on a case-by-case basis, for:

(l) Vietnam. It is the policy of the United States to deny licenses or other approvals for exports or imports of defense articles and defense services destined for or originating in Vietnam, except that a license or other approval may be issued, on a case-by-case basis, for:

(1) Lethal defense articles and defense services to enhance maritime security capabilities and domain awareness;

(2) Non-lethal defense articles and defense services; or,

(3) Non-lethal, safety-of-use defense articles (e.g., cartridge actuated devices, propellant actuated devices and technical manuals for military aircraft for purposes of enhancing the safety of the aircraft crew) for lethal end-items.

Note to paragraph (l). For non-lethal defense end-items, no distinction will be made between Vietnam’s existing and new inventory.

Businessman Pleads Guilty to Illegal Bribes


By: Danielle McClellan

Joseph T. Lukas, a partner in Nexus Technologies Inc., has pled guilty in connection with a conspiracy to bribe Vietnamese government officials. Nexus was a privately owned export company that found US vendors for Vietnamese government contracts that involved underwater mapping equipment, bomb containment equipment, helicopter parts, chemical detectors, satellite communication parts and air tracking systems. Lukas was in charge of the negotiations of these contracts with US suppliers. The Vietnamese officials included the commercial branches of Vietnam’s Ministries of Transport, Industry and Public Safety.

Lukas admitted that from 1999 to 2005, he and other Nexus employees agreed to, and paid, bribes to Vietnamese government officials in order to obtain contracts. These bribes were covered up as “commissions” in Nexus’s accounting records. Court records indicate that Nexus paid over $150,000 to Vietnamese officials over the 6 year period.

Lucas has been indicted for one count of conspiracy to bribe Vietnamese public officials, in violations of the Foreign Corrupt Practices Act (FCPA) along with Nexus and co-conspirators Nam Nguyen, Kim Nguyen and An Nguyen. Cases are still pending against the other defendants and Nexus. Lukas is scheduled for sentencing on April 6, 2010 and faces a maximum sentence of 10 years in prison and $350,000 fine.

More information:

DOD Announced New FedEx Shipping Policy


By: Danielle McClellan

DOD has released an update involving FedEx shipping activities for items shipped from Pacific locations to Europe, CENTCOM AOR and intra Pacific. On August 4, 2009 DOD released a statement advising that in addition to an earlier restriction to ship to Indonesia, Malaysia, Philippines, Thailand and Vietnam, FedEx can now no longer accept shipments containing ITAR controlled items for movement between the following regions:

  • APAC-Middle East
  • Middle East-APAC
  • APAC-Europe
  • Europe-APAC
  • Intra APAC
  • APAC-India
  • India-APAC

The only routing for ITAR controlled shipments is via the FedEx hub in China.

Don’t forget to always check the ITAR prior to booking a shipment to any of the above mentioned countries with FedEx.

More information: Surface Deployment and Distribution Command – August 4, 2009 Advisory

ITAR Amendment for Exports to Vietnam



By: John Black

In the April 3, 2007 Federal Register, the Department of State amended the ITAR to announce that it will consider applications for the sale, lease, export or transfer of non-lethal defense articles and services to Vietnam. The policy will be to consider on a case-by-case basis licenses or approvals for imports or export of non-lethal defenses items/services either originating from or destined for Vietnam. Licenses and approvals for lethal defense articles and services will be denied. Exports of lethal end-items and their components will also be denied unless the components are non-lethal, safety-of-use spare parts. Non-lethal crowd control defense items/services and night vision devices to be used for ground security will not be approved.


DDTC may approve an application that meets the above guidelines. You may not use exemptions for Vietnam.

Comments regarding this amendment may be addressed


  • Federal Register – April 3, 2007 (Volume 72, Number 63, pp. 15830-15831)

Vietnam Decries US Trade Sanctions



By: John Black

The Vietnamese Government and people have nothing but harsh words for the new US tariffs of 37% to 53% on imports of Vietnamese catfish, a development that has catfish eaters across the United States on the hook for higher prices, but otherwise has no impact on any of our readers. Just thought you might be interested.