Archive for 2007

Lucent Agrees to $1 Million Fine for FCPA Violations

Friday, December 21st, 2007 by Danielle McClellan

Lucent Technologies Inc., a global communications solutions provider has entered into an agreement with the Department of Justice to resolve allegations that it violated the Foreign Corrupt Practices Act (FCPA). The company provided travel and other items of value to Chinese government officials and included it as expenses in company books and records. (more…)

Compliance with U.S. ITAR Can Cause Legal Problems for Canadian Companies

Thursday, December 20th, 2007 by Guest Author

Some Canadian companies in the defense industry are finding themselves in a catch-22 situation. If they comply with the U.S. ITARs and restrict access on employees with certain nationalities, then the employees are taking the company to the provincial human rights tribunal. If they do not comply with the U.S ITARs, they cannot obtain U.S business and they may be committing an offence under U.S. law (if there is a connection to a U.S. based company). (more…)

Some Nuts and Bolts of New ITAR Agreements Requirements

Wednesday, December 19th, 2007 by Danielle McClellan

On December 19, 2007, an amendment to the ITAR was published that revised the licensing procedures with regards to third party/dual nationals for technical assistance and manufacturing license agreements. It is no longer required that additional approval for a release of technical data, defense services, and access to defense articles for third part/dual national employees from NATO, EU, Australia, New Zealand, Japan, and Switzerland. (more…)

DDTC Announces New Dual and Third Country National TAA and MLA Rule

Wednesday, December 19th, 2007 by John Black

“Beware of apparently good news.” — John Black

In the December 19, 2007 Federal Register, the Directorate of Defense Trade Controls (DDTC) of the State Department announced its new policy for dual and third country nationals. The change primarily is related to the requirement that when you apply for a Technical Assistance Agreement (TAA) or Manufacturing License Agreement, you must identify the foreign nationalities of the foreign signatories to the agreement. (more…)

State Clarifies UN Sanctioned Countries in ITAR

Wednesday, December 19th, 2007 by Danielle McClellan

On December 19, 2007, the Department of State issued an amendment to the International Traffic in Arms Regulations concerning exports and sales which were prohibited by United Nations Security Council embargoes. The amended list will add countries subject to such embargos. The current list includes: Cote d’Ivoire, Democratic Republic of Congo, Iraq, Iran, Lebanon, Liberia, North Korea, Rwanda, Sierra Leone, Somalia, and Sudan.

More information:

Federal Register 72FR71575.pdf (PDF)

Update on Canada’s Trade Sanctions Against Burma (and More)

Friday, December 14th, 2007 by Guest Author

On December 14, 2007, Minister Maxime Bernier, Minister of Foreign Affairs, announced that Canada’s economic sanctions against Burma entered into force on December 13, 2007. (more…)

State Department Revises ITAR Voluntary Disclosure Rules

Thursday, December 13th, 2007 by Guest Author

60-Day Deadline Imposed

On December 13, the U.S. Department of State announced changes to the Voluntary Disclosure provisions of the International Traffic in Arms Regulations (ITAR), effective immediately. The amended regulations now impose a requirement that a complete voluntary disclosure be submitted within 60 calendar days of initial notification to State of the discovery of a violation, which must be supplied immediately after the discovery.

The voluntary disclosure regulations, found at 22 C.F.R. § 127.12, are designed to encourage disclosure to the Directorate of Defense Trade Controls (DDTC) of any violations of the export control provisions of, or any authorizations issued under the authority of, the Arms Export Control Act. Specifically, the regulations provide that a disclosure may be considered a mitigating factor in determining whether and to what degree administrative penalties may be imposed for the violation. In practice, many companies have found the voluntary disclosure program to be an effective tool, and have taken advantage of the opportunity to benefit from penalty mitigation in exchange for explaining to DDTC their prior violations and how they will be prevented from recurring.

As the focus on compliance has increased in recent years, so has the number of disclosures submitted to DDTC and the time involved in managing the program. In order to expedite the process, and to eliminate perceived abuses by exporters, DDTC has amended the regulations to require full disclosure within the 60 calendar day period following initial notification. A failure to complete full disclosure to DDTC’s satisfaction within the 60-day period may result in a determination by DDTC not to consider the notification as a mitigating factor in its assessment of the appropriate penalties. An allowance has been made for the request of an extension of the period where a full investigation and reporting of the violation cannot be completed within the 60 days. (more…)

Commerce Relaxes EAR to Be More Like the ITAR

Wednesday, December 12th, 2007 by Danielle McClellan

It used to be that the International Traffic in Arms Regulations allowed a US citizen employee of a US exporter to carry export-license-required-technical data (technology) out of the country on his/her laptop while the EAR did not allow the same thing to happened. That has now changed.In the December 12, 2007 Federal Register, the Bureau of Industry and Security, Commerce has revised the Export Administration Regulations (EAR) to expand the export license exceptions Temporary Imports, Exports, and Reexports (TMP) and Baggage (BAG) to allow for certain exports and reexports of technology between two U.S. persons or their employees traveling or those that are temporarily assigned abroad.

The rule expands the availability of License Exceptions TMP and BAG but does not authorize any new release of technology. Any technology exported under the new rule may only be released to persons who may receive that same technology pursuant to other provisions of the EAR which means it will still be subject to restrictions applicable to technology exports and reexports. (more…)

$470,000 Fine for Safety Equipment to Iran

Friday, December 7th, 2007 by Danielle McClellan

Mine Safety Appliances Company in Pittsburgh, PA has been charged with violating the Export Administration Regulations and forced to pay a fine of $470,000. The company is charged with committing 107 violations beginning as early as May of 2001.

During 71 separate occasions Mine Safety Appliance Company reexported various safety equipment items that were subject to the Regulations, from the United Arab Emirates to Iran without the required U.S. government authorizations. Then on 31 other occasions the company reexported controlled items to the same location without the required licenses from the BIS.

Mine Safety Appliance Company also reexported safety equipment items subject to the regulations from the United Arab Emirates to Syria without the required Department of Commerce licenses on 5 separate instances.

The Pittsburgh Company will not be debarred as long as their fine is paid as agreed.

More information:

BIS Order (e2025.pdf) (PDF)

Night Vision Camera Export Gets Prison Time

Monday, December 3rd, 2007 by Danielle McClellan

In June of 2004 Philip Cheng was indicted by a federal grand jury on charges of conspiracy to violate the federal Arms Export Control Act and the International Traffic in Arms regulations, brokering the illegal export of defense articles and services, and three counts of money laundering. Cheng illegally exported a night vision camera and its accompanying technology to China.

A trial in February and March of 2006 ended in a hung jury. After this, Mr. Cheng agreed to resolve the case through a guilty plea to willful illegal brokering of the night vision cameras to China.

On December 3, 2007 Philip Cheng was sentenced to two years in prison and ordered to pay a $50,000 fine for his role in the illegal export of night vision goggles to China without obtaining the required authorization from the United States Department of State.

More information:

California Export Broker Sentenced to Two Years for Illegally Exporting National Security-Sensitive Technology to China (