05 November 2010
President signs Executive Order on Controlled Unclassified Information
08 June 2010
New Department of Defense Memorandum on Fundamental Research
What this means for Virginia Tech defense contracting:
6.3 funded unrestricted research is back on the table:
“There will be circumstances in which the DoD Components may find it valuable to perform research with other Budget Activity funds (e.g., Budget Activity 3 and higher) without placing restrictions on publications or personnel.”
Subcontracts for fundamental research should not be restricted by the Prime, but the Prime must have clear direction from the government that the sub will be fundamental research
“In addition, the DoD must not place restrictions on subcontracted unclassified research that has been scoped, negotiated, and determined to be fundamental research within the definition ofNSDD 189 according to the prime contractor and research performer and certified by the contracting component, except as provided in applicable federal statutes, regulations, or executive orders. Provisions shall be made to accommodate such subcontracts for fundamental research and to ensure DoD restrictions on the prime contract do not flow down to the performer(s) of such research.”
Clear guidance should be provided by DoD in all solicitations
20 April 2010
Remarks by Secretary Gates to the Business Executives for National Security on the U.S. Export Control System
04 March 2010
BAE Systems plc Pleads Guilty, to Pay $400 Million Criminal Fine
19 January 2010
U.S. Firms Launch Export-Control Reform Push
11 November 2009
Treasury Publishes List of Countries Requiring Cooperation with Arab Boycott of Israel
In accordance with section 999(a)(3) of the Internal Revenue Code of 1986, the Department of the Treasury is publishing a current list of countries which require or may require participation in, or cooperation with, an international boycott (within the meaning of section 999(b)(3) of the Internal Revenue Code of 1986).
On the basis of the best information currently available to the Department of the Treasury, the following countries require or may require participation in, or cooperation with, an international boycott (within the meaning of section 999(b)(3) of the Internal Revenue Code of 1986).
United Arab Emirates
Yemen, Republic of
Iraq is not included in this list, but its status with respect to future lists remains under review by the Department of the Treasury.
29 October 2009
D.C. Lobbyist Indicted for Conspiring to Violate Sudanese Sanctions and to Act as Illegal Agent of Sudan
Robert J. Cabelly, 61, of Washington, D.C., has been indicted in the District of Columbia in an eight-count indictment charging him with conspiracy to violate the Sudanese sanctions regulations and to act as an unregistered agent of a foreign power, four counts of violating the Sudanese sanctions regulations, as well as one count apiece of money laundering, passport fraud and making false statements.
Cabelly, who was the principal and managing director of a Washington, D.C. consulting firm and a former State Department employee, was scheduled to appear in federal court yesterday in the District of Columbia at 1:30 p.m. before U.S. Magistrate Judge Deborah Robinson.
If convicted, he faces up 20 years in prison on each of the substantive Sudanese Sanctions Regulations counts, 20 years for the money laundering count, 10 years for the passport fraud, and five years each for the conspiracy and false statement counts.
According to the indictment, between early 2005 and mid-2007, Cabelly performed work on behalf of the Republic of Sudan, a country currently on the State Department’s State Sponsors of Terrorism list, without the approval of the U.S. Government as is required by law under the Sudanese sanctions regulations. In an effort to make money, Cabelly brokered business contracts and transactions benefiting Sudan. He also provided Sudan with U.S. Government information that was sensitive and controlled. All the while, Cabelly affirmatively misrepresented to U.S. officials the nature of his relationship with Sudan, as well as his relationship with the foreign entities doing business in Sudan.
23 October 2009
Ex-Government Scientist In Court On Attempted Espionage Charge
25 August 2009
White House Orders Review of U.S. Export Control System
25 August 2009
OFAC Imposes $5.75 Million Penalty on Bank for Violating U.S. Embargoes on Sudan and Cuba
11 August 2009
Small Business Physicist Gets 14 Months Prison for ITAR
KNOXVILLE - Daniel Max Sherman, 38, was today sentenced to 14 months in federal prison for his involvement with a Knoxville company and former University of Tennessee professor who violated export laws by letting foreign graduate students work on a military-related project.
Before U.S. District Judge Thomas Varlan passed sentence, Sherman said he regretted his actions.
He faced a potential sentence of five years in prison and $250,000 fine. Because of his cooperation in the federal investigation, prosecutors sought a lesser sentence of 28 months.
Sherman, a physicist, provided extensive information and documents to investigators that led to the conviction of UT Professor Emeritus John Reece Roth, 73, for violating the Arms Export Control Act. Roth was sentenced to four years
Roth, an expert in plasma research, was a subcontractor on a U.S. Air Force project awarded to Atmospheric Glow Technologies Inc. (ATG), Atmospheric Glow Technologies (AGT) Inc., a plasma technology company based in Knoxville. Sherman, a former student of Roth's, also worked there, but there is no evidence he profited financially beyond his salary, Assistant U.S. Attorney Jeff Theodore said.
06 August 2009
FOR IMMEDIATE RELEASE
Bureau of Industry and Security
Office of Public Affairs
DHL Signs $9.44 Million Joint Settlement Agreement with BIS and OFAC
WASHINGTON, D.C. - The Commerce Department's Bureau of Industry and Security (BIS) and the Treasury Department’s Office of Foreign Assets Control (OFAC) have entered into a joint settlement agreement with DPWN Holdings (USA), Inc. (formerly known as DHL Holdings (USA), Inc.) and DHL Express (USA), Inc. (collectively “DHL”), regarding allegations that DHL unlawfully aided and abetted the illegal exportation of goods to Syria, Iran and Sudan and failed to comply with record keeping requirements of the Export Administration Regulations (EAR) and OFAC regulations. DHL will pay a civil penalty of $9,444,744 and conduct external audits covering exports to Iran, Syria and Sudan from March 2007 through December 2011.
“Preventing exports to sanctioned countries and preserving export records are fundamental components of effective compliance,” said Kevin A. Delli-Colli, Acting Assistant Secretary of Commerce for Export Enforcement. “Large-scale compliance breakdowns lead to significant sanctions aimed at ensuring that freight forwarders put into place and maintain necessary measures to meet their compliance responsibilities.”
BIS charged that on eight occasions between June 2004 and September 2004, DHL caused, aided and abetted acts prohibited by EAR when it transported items subject to the EAR from the United States to Syria, and that with regard to 90 exports between May 2004 and November 2004, DHL failed to retain air waybills and other export control documents required to be retained under Part 762 of the EAR.
OFAC charged that DHL violated various OFAC regulations between 2002 and 2006 relating to thousands of shipments to Iran and Sudan. Like DHL’s EAR violations, its OFAC violations primarily involve DHL’s failure to comply with applicable recordkeeping requirements.
In addition to the monetary penalty, DHL will hire an expert on U.S. export controls laws and sanctions regulations for an external audit of DHL transactions to Iran, Sudan and Syria between March 2007 and December 2009. Annual calendar year audits will be conducted in 2010 and 2011. The external auditor will assess DHL’s compliance with the EAR and OFAC regulations, including recordkeeping requirements.
Acting Assistant Secretary Delli-Colli praised the BIS Office of Export Enforcement’s Miami, Washington and San Jose field offices, along with OFAC for their outstanding work on the case. This case represents the largest joint settlement involving BIS and OFAC, and is the result of closer collaboration between the two agencies.
06 August 2009
State/DDTC Adds New ITAR Exemption for Temporary Export of Body Armor for Personal Use
The Department of State is amending the International Traffic in Arms Regulations (ITAR) to add an exemption for the temporary export of body armor for exclusive personal use to destinations not subject to restrictions under the ITAR Sec. 126.1 and to Afghanistan and Iraq under specified conditions. 74 Fed. Reg. 39212
If you have questions about whether or not this exemption, or how to document the export, please contact the Office of Export and Secure Research Compliance (OESRC).
Effective Date: This rule is effective August 6, 2009.
02 July 2009
University of Tennessee Professor Sentenced to 4 Years for ITAR Export Violations
A former professor at the University of Tennessee at Knoxville was sentenced today to serve four years in federal prison for allowing unauthorized foreign citizens access to ITAR-restricted military technology.
02 June 2009
Obama Orders Review of Classified and Controlled Unclassified Information
14 May 2009
University of Tennessee sentencing for ITAR violations in SBIR contract argued
27 April 2009
"Universities Look for Lessons as Professor Awaits Sentencing Over Export-Law Violations"
This is an article relating to the Roth ITAR violations case, however the lead paragraph is incorrect, as Dr. Roth faces sentencing for allowing unauthorized foreign citizens access to unclassified technology, not classified technology.
08 April 2009
"Department of Justice: Virginia Physicist Sentenced to Over 4 Years in Prison for Illegally Exporting Launch Data to China and Offering Bribes to Officials" - www.usdoj.gov
WASHINGTON - A physicist in Newport News, Va., was sentenced to 51 months in prison today for illegally exporting space launch technical data and defense services to the People’s Republic of China (PRC) and offering bribes to Chinese government officials.
05 March 2009
Change in Export Restrictions on the Export of Teledyne RDI Products
Important Notice Regarding the Export of
Teledyne RD Instruments Products
Dear Teledyne RDI Customer:
We are writing to inform our customers that the U.S. Department of Commerce has recently made modifications to the Commerce Control List (CCL) in which some of our products, listed below, are controlled under Category 6 - Sensors and Lasers section 6A001. These products are now controlled and will require a U.S. Department of Commerce Export License for shipment into certain countries.
However, Teledyne RDI is confirming the official classification of these products with the Department of Commerce and we will notify our customers of any changes in that regard.
The modification to the CCL affects product that has been exported as well as product to be exported. The following products have been determined to be controlled by the modified classification.
Teledyne RDI Products covered by the modification:
- BB ADCPs [firmware version 5.xx]
- WH Navigator [firmware version 9.xx]
- Explorer [firmware version 34.xx]
- WH Monitor/Sentinel/Long Ranger/Quartermaster [firmware version 16.xx]
For any sale, resale, export, or re-export of the Goods, both Seller and Buyer must comply with all applicable U.S. export regulations and U.S. export licensing requirements.
With regard to existing product in the field, Teledyne RDI now offers a firmware upgrade for WH Monitor/Sentinel/Long Ranger/Quartermaster product, which is not classified as 6A001. A field service bulletin will be forthcoming directly clarifying the resolution of this issue.
With regard to new product purchases, the standard firmware for WH Monitor/Sentinel/Long Ranger/Quartermaster product has been changed so they are not controlled under 6A001, unless they are specifically configured with the Bottom Track feature option.
WH Monitor/Sentinel/Long Ranger/Quartermaster products, purchased with the Bottom Track feature option, are controlled by 6A001 and will require a U.S. Department of Commerce Export License for shipment into certain countries. For any sale, resale, export, or re-export of the Goods, both Seller and Buyer must comply with all applicable U.S. export regulations and U.S. export licensing requirements.
We apologize for the inconvenience; however, we have no control over the U.S. Department of Commerce and this process.
Teledyne RD Instruments
Poway, CA USA - Tel. +1-858-842-2600
Teledyne RD Instruments Europe
La Gaude, France - Tel. +33-492 110 930
Teledyne RD Instruments is a leading manufacturer of acoustic Doppler current profiling (ADCP) and Doppler Velocity Log (DVL) products for scientific, commercial and military applications.
19 January 2009
"Export control Reforms Critical to Aerospace Success" states Aviation Week & Space Technology editorial
AVWeek editorial (PDF | 104KB)
In an editorial presented as an open letter to the new administration, Jim McNerney, Chairman, President and CEO, Boeing Co., opines that the U.S. "must have an export licensing system that is both rational and efficient." This link provides more of his views and the complete article.
08 January 2009
"Obama Is Urged to Open High-Tech Exports" - NYTimes
National Academies of Science: United States Munitions List, Commerce Control List: "technological Maginot Line"
Expert panel addresses need for export reform by asking the new administration to "immediately change or scrap many cold-war-era regulations on high-tech exports... " according to an expert panel. The panel members included Brent Scowcroft, a former national security advisor, and was headed by John Hennessy, president of Stanford. The panel was convened by the National Research Council, which is the research division of the National Academy of Sciences.
28 October 2008
U.S. Department of Justice releases fact sheet on major enforcement prosecutions during last two years.
Export Enforcement Cases (PDF | 137KB)
This report details some of the major export and embargo related enforcement prosecutions carried out since October 2006 by the U.S. department of Justice. These cases resulted from investigations carried out by several law enforcement agencies, including the Federal Bureau of Investigations (FBI), Department of Homeland Security's Immigration and Customs Enforcement (ICE), Bureau of industry and Security (BIS), and the Defense Criminal Investigative Service (DCIS).
28 October 2008
Japan Navy Officer Convicted of Leaking US Missile Data to Japanese Naval Academy Professor
Japan Navy Officer Convicted (PDF | 18KB)
Sumitaka Matsuuchi, a 35-year-old lieutenant commander, was found guilty of leaking U.S.missile data to an instructor at a Japanese naval academy in western Japan in 2002, in violation of a Japan-U.S. security pact. Matsuuchi was sentenced to 2 1/2 years in prison for illegally transferring information related to the Aegis radar systems.
12 October 2008
US Rescinds North Korea’s Designation as State Sponsor of Terrorism
North Korea Sanctions International Trade Law News article....
On October 12, Secretary of State Rice yesterday signed an order rescinding the designation of North Korea Democratic People's Republic of Korea (“North Korea”) as a State Sponsor of Terrorism.
The removal of this designation of North Korea as a state sponsor of terrorism will ultimately have some effect (e.g., the Export Administration Regulations (EAR), such as removing North Korea from Country Group E:1), however, many, many other sanctions and embargoes remain in place for North Korea, which will continue to restrict exports and transactions of value with North Korea and its nationals.
According to the International Trade Law News: "U.S. Removal of North Korea as State Sponsor of Terrorism Likely to Have Little Effect on Export Control Requirements," The Department of Commerce's Bureau of Industry and Security (BIS) may also continue to require a license to export or reexport items subject to the EAR to North Korea, except food and medicine classified as EAR99.
In addition, North Korea still remains subject to an arms embargo. A complete list of current sanctions on North Korea can be found at http://www.state.gov/r/pa/prs/ps/2008/oct/110923.htm.
Exporters and reexporters of U.S. products should be aware that the changes to U.S. export control laws and regulations will not take effect until published in the Federal Register and thus the status quo will remain until further notice.”
03 October 2008
Encryption Simplification by BIS
This interim final rule amends the Export Administration Regulations (EAR) to make the treatment of encryption items more consistent with the treatment of other items subject to the EAR, as well as to simplify and clarify regulations pertaining to encryption items. The Departments of Commerce, State and Defense will continue to review export control, license review policies, and license exceptions for encryption items in the EAR.
03 September 2008
Retired University of Tennessee Professor Convicted of Arms Export Violations
On Wednesday, September 3, 2008, a federal jury convicted retired University of Tennessee professor Dr. J. Reece Roth, after a seven day trial, of illegally exporting military technical information relating to plasma technology designed to be deployed on the wings of drones operating as a weapons or surveillance systems.
"Today's guilty verdict should serve as a warning to anyone who knowingly discloses restricted U.S. military data to foreign nationals. The illegal export of such sensitive data represents a very real threat to our national security, particularly when we know that foreign governments are actively seeking this information for their military development," said Patrick Rowan, Acting Assistant Attorney General for National Security. more... Knoxville News Sentinel article...
28 June 2008
DoD Reaffirms Fundamental Research Should Be Unrestricted
DoD Memorandum of June 26, 2008 (PDF | 152KB)
The Undersecretary of Defense has issued a memorandum to the military services and defense agencies reiterating that the Department of Defense (DOD) will NOT restrict disclosure of basic and applied research results unless the research is classified for national security reasons or otherwise restricted by statute, regulation, or executive order. The DoD memorandum of June 28, 2008 reaffirms that National Security Decision Directive 189 (NSDD-189) remains “the national policy for controlling the flow of scientific, technical, and engineering information produced in federally funded fundamental research at colleges, universities, and laboratories.”
This is a positive development for universities that conduct basic and applied research for the Department.
This “clarifying guidance” on DOD policy was an outcome of a review of these issues by the DOD Joint Analysis Team, conducted at the request of Secretary of Defense Robert M. Gates. The review and resulting memorandum respond to concerns raised in last year’s National Academy of Sciences report,“Science and Security in a Post 9/11 World,” as well as to an updated survey by AAU and the Council on Governmental Relations (COGR) that shows the continuing prevalence of restrictive clauses in DOD research contracts. (The final AAU-COGR report with the survey findings and conclusions will be available by the end of this month.)
The DOD memorandum, signed by Undersecretary John J. Young, states: “The policy makes clear that the products of fundamental research are to remain unrestricted to the maximum extent possible. When control is necessary for national security reasons, classification is the only appropriate mechanism. The DoD will place no other restrictions on the conduct or reporting of unclassified fundamental research, except as otherwise required by statue, regulation, or Executive Order.… DoD awards for the performance of fundamental research should, with rare exceptions, not involve classified items, information, or technology. Nor, with rare exceptions, should an award be managed or executed in such a manner that it becomes subject to controls under U.S. statutes, including export control. The performance of fundamental research, again with rare exceptions, should not be managed in a way that it becomes subject to restrictions on the involvement of foreign researchers or publication restrictions.”
The memorandum asks that the policy be distributed widely and directs addressees of the memorandum to report back to the Undersecretary in writing by July 15 on how the clarification and policy guidance documents will be included in training for research program personnel.
21 May 2008
UT Professor Indicted by Grand Jury
UT Professor Indicted by Grand Jury (DOCX | 18KB)
A University of Tennessee professor emeritus is accused of giving two graduate research assistants - one from Iran and another from the People's Republic of China - unfettered and unauthorized access to sensitive military arms information and lying about it.
23 April 2008
Customs Can Search all Files on a Laptop, Court Rules
Laptop Border Searches (PDF | 65KB)Laptops subject to search at border crossings (PDF | 290KB)
Business travelers carrying laptops into the U.S. from overseas may be in for a rude experience. The Ninth Circuit Court of Appeals ruled Monday that U.S. Customs and Border Patrol officers can search laptops -- including opening every file on the hard drive -- without any reasonable suspicion.
15 April 2008
Axion Corp wins legal fees in export case
A Huntsville defense contractor found not guilty of illegal arms export last year has won another victory against the government, after a judge ordered the Justice Department to pay the legal expenses incurred by the company in defending itself from federal prosecution. more...
10 April 2008
Politicians fret over military gear sold on eBay and Craigslist
Night-vision cameras and camouflage gear are probably available at your local Wal-Mart. But congressional leaders on Thursday voiced dismay at reports that "sensitive" military-issue equipment is being resold, potentially to terrorists, at Web sites like eBay and Craigslist and suggested new laws are necessary to ban that practice. more...
30 January 2008
California company charged for "Release of Technology" to Chinese professor and students.
The Bureau of Industry and Security (BIS) has issued a charging letter for deemed export violations involving a Peoples Republic of China (PRC) professor from Beijing University along with several PRC students. The technology, physical layer technology for commercial 802.11 wireless LAN integrated circuits classified under ECCN 5E991, was released in the United States by a California company.
28 December 2007
President Bush signs H.R. 4986, Defense Appropriations Act for 2008
H.R. 4986 - Defense Appropriations Act of 2008 (PDF | 13KB)
The bill, H.R. 4986, includes new legislation regarding export controls and reporting requirements. The export control legislation is in Section 890 of the bill and includes new reporting requirements, training requirements, audits, and requires a designated corporate liason for contractor compliance with the Arms Export Control Act and the Export Administration Act of 1979.
26 December 2007
Suspension of defense export licenses for Sri Lanka
In accordance with "Department of State, Foreign Operations, and Related Programs Appropriations Act, 2008," effective December 26, 2007, it is the policy of the United States to deny applications for licenses and other approvals to export or otherwise transfer defense articles and services to Sri Lanka.
20 December 2007
Deemed Export Advisory Committee says Commerce Department's "deemed export" regulations are "increasingly irrelevant" and recommends overhaul.
Deemed Export Advisory Committee Report (PDF | 862KB)DEAC's Proposed 7-Step Process (DOC | 48KB)
The Deemed Export Advisory Committee (DEAC), a federally appointed commission consisting of US Government, industry, and university experts issued a report on 20 December 2007, completing a year long review of the Commerce Department’s Deemed Export regulations, and concluded “that the current Deemed Export regulations have become increasingly irrelevant in the prevailing globalized commercial, academic and national security.”
The DEAC recommended the following changes be made:
Create a wholly different seven step process for review of deemed exports;
Significantly revise the Commerce Control List,
Establish a category of “Trusted Entities”, commercial and not for profit organizations capable of issuing export licenses, subject to annual certification and audit by the Commerce Department
Consistent with recommendations from Virginia Tech that:
“Deemed export regulations should restrict a few technologies that truly require nationwide protection from disclosure at universities, and not restrict the vast quantity of technologies that do not. (Put very high walls around a very few critical technologies, and de-emphasize those that are not state of the art.)," and
The Commerce Department should “Develop a procedure to expedite removal or de-emphasis of technologies that are no longer “cutting edge.”
the DEAC recommended:
“…increasing the focus on, and building higher fences around, those elements of technical knowledge and military advantage that could have the greatest consequences in the national/homeland security sphere by systematically reviewing the Commerce Control List, with advice from independent experts, to eliminate those items and technologies that have little or no such consequences; involving a panel of outside experts in the fields of science and engineering to conduct an annual “sunset” review of the lists of technologies subject to the CCL”.
The report is not without areas of concern. The DEAC recommended an alternative export evaluation process that may be more cumbersome or problematic than the existing system. The proposed system consists of a seven step process that includes evaluation of a foreign national’s “loyalty” (Step 1), and in license applications for deemed exports, requires submission of much more biographical information than is already required by the current licensing process.