Archive for the ‘India’ Category

BIS Announces Favorable Export License Approval Policy for India

Thursday, March 2nd, 2017 by Danielle McClellan

By: John Black

Effective January 19, 2017, the Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) to put in place a favorable export license approval policy for military items destined for India.  BIS stated that it generally will approve license applications subject to national security controls or regional stability controls to implement state that the US commitments related to the US and India becoming Major Defense Partners (according to the India-US Joint Statement of June 7, 2016).

More specifically, the following amendments have been made:

  • PART 742
    • 742.4 is amended by adding paragraph (b)(8) to read as follows:

§ 742.4 National security.

(b) * * *

(8) For India, there is a general policy of approval for license applications to export, reexport, or transfer items, including ‘‘600 series’’ items, for civil or military end uses in India, for ultimate end use by the Government of India, for reexport to countries in Country Group A:5, or for return to the United States, so long as such items are not for use in nuclear, ‘‘missile,’’ or chemical or biological weapons activities.

*       *       *       *       *

  • 742.6 is amended by adding paragraph (b)(7) to read as follows: § 742.6    Regional Stability.

(b) *  *  *

(7) For India, there is a general policy of approval for license applications to export, reexport, or transfer items, including ‘‘600 series’’ items, for civil or military end uses in India, for ultimate end use by the Government of India, for reexport to countries in Country Group A:5, or for return to the United States, so long as such items are not for use in nuclear, ‘‘missile,’’ or chemical or biological weapons activities.

  • PART 748
    • 748.15 is amended by revising paragraphs (a)(2) and (d) introductory text to read as follows:

§ 748.15    Authorization Validated End-User (VEU).

(a) *  *  *

(2) In evaluating an end user for eligibility under authorization VEU, the ERC will consider a range of information, including such factors as: The entity’s record of exclusive engagement in appropriate end-use activities; the entity’s compliance with U.S. export controls; the need for an on- site review prior to approval; the entity’s capability of complying with the requirements of authorization VEU; the entity’s agreement to on-site reviews by representatives of the U.S. Government to ensure adherence to the conditions of the VEU authorization; and the entity’s relationships with U.S. and foreign companies. In addition, when evaluating the eligibility of an end user, the ERC will consider the status of export controls and the support and adherence to multilateral export control regimes of the government of the eligible destination.

(d) End-use restrictions. Items obtained under authorization VEU in China may be used only for civil end uses and may not be used for any activities described in part 744 of the EAR. Items obtained under authorization VEU in India may be used for either civil or military end uses and may not be used for any activities described in part 744 of the EAR. Exports, reexports, or transfers made under authorization VEU may be made to an end user listed in Supplement No. 7 to this part only if the items will be consigned to and for use by the validated end user. Eligible end-users who obtain items under VEU may only:

*       *       *       *       *

Paragraph (7)(ii) of the section titled Required Information for Validated End-User Authorization Requests in Supplement No. 8 to part 748 is revised to read as follows:

Supplement No. 8 to Part 748— Information Required in Requests for Validated End-User (VEU) Authorization

* * * * *

Required Information for Validated End-User Authorization Requests

* * * * *

(7) * * *

(ii) Understands and will abide by all authorization VEU end-use restrictions, including the requirement that items received under authorization VEU will only be used for authorized end-uses and may not be used for any activities described in part 744 of the EAR;

* * * * *

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2017-01-19/pdf/2017-00439.pdf

It Never Pays to Use Your Church to Cover Your Export Violations

Thursday, May 5th, 2016 by Danielle McClellan

By: Danielle McClellan

What does a system analyst for a defense contractor, a church volunteer and an owner of 3 US companies all have in common?  They all involve one woman, who will now spend 57 months in prison, encompassed each, and all at the same time. Hannah Robert, of North Burnswick, New Jersey recently plead guilty to conspiring to violate the Arms Export Act by exporting military technical drawings to India without government approval.

The story begins with Robert being an employee for a defense contractor where she worked as a system analyst and had access to thousands of export controlled drawings that were used for bids on US Department of Defense (DoD) contracts (Robert held this position until November 2012). In June 2010, she became the founder, owner and president of One Source USA LLC where she contracted with the DoD to supply defense hardware items and spare parts. In September 2012, Robert opened another defense company, Caldwell Components, Inc. as well as Once Source India (located in India), with a resident of India (identified on as R.P. in court documents) that manufactured defense hardware items and spare parts.

Between June 2010 and December 2012 Robert illegally exported defense technical drawings for parts used in the torpedo systems for nuclear submarines, military attack helicopters and F-15 fighter aircraft to R.P. in India. Robert and her India counterpart also sold defense hardware items to foreign customers including the United Arab Emirates Ministry of Defence. Hannah Robert volunteered at a church in Camden County, New Jersey, as a web administrator. This allowed her access to the church’s website where she uploaded the defense technical data. She provided her login and password to the church’s website to R.P. so that he/she could download the files. This process went on for two years and was the way in which Robert and R.P. were able to pass the technical information amongst themselves.

Hannah Robert was also faced with the issue of providing US DoD with faulty wing pins for the F-15 fighter aircraft. Robert provided false and misleading material certificates and inspection reports for the parts. The documents also failed to list that the actual manufacturer of the pins was located in India, not One Source USA’s New Jersey location which was listed on all of her DoD bids. The failed wing pins grounded approximately 47 F-15 fighter aircraft and cost DoD over $150,000 to inspect and repair the pins. Robert must pay $181,000 to the DoD to cover the repair costs as well as forfeiting more than $77,000 that she earned from the contracts.

The case was investigated by the special agents of the Defense Criminal Investigative Service’s Northeast Field Office and the special agents of the Department of Homeland Security’s Counter Proliferation Investigations.

More Information: https://www.justice.gov/usao-nj/pr/former-owner-defense-contracting-businesses-sentenced-57-months-prison-illegally

US Relaxes Export Controls on India: Bayonets, Shields and Pepper Spray No Longer Require a License

Wednesday, February 4th, 2015 by Brooke Driver

By: John Black

In the January 23, 2015 Federal Register the Commerce Department revised the Export Administration Regulations (EAR) to reduce US export controls on exports and reexports to India of certain items on the Commerce Control List controlled for regional stability and crime control reasons.  Despite the hoopla and the pageantry of the “US-India Bilateral Understanding,” the impact of this relaxation is focused on a relatively small group of products.

Specifically, the regional stability RS 2 and crime control CC 1 and CC 3 license requirements no longer apply to exports and reexports to India.  Here are some examples of items now eligible for export and reexport to India as no license required:

  • 0A918 Bayonets
  • 0A979 Police helmets and shields
  • 1A984 Tear gas, pepper spray, smoke bombs
  • 0A984 Shotguns with barrels over 18 inches and related items
  • 0A987 Optical sighting devices
  • 3A980 Voice print analysis equipment
  • 3A981 Polygraphs
  • 6A002 police infrared viewers
  • 0A606.b Unarmed military vehicles derived from commercial vehicles
  • 1A004.d Explosive detection equipment
  • 2A293 Explosive or detonator detection equipment
  • 2A294 Concealed object detection equipment
  • 6A002.c police infrared viewers
  • 6A003 certain cameras

New Export Clearance Requirements:  Before you have the party for your license-free million dollar export of bayonets, shields, pepper spray and smoke bombs to India, make sure you note that the EAR has new special rules related AES filing and destination control statements.

Specifically, 758.1(b)(9) requires that you always  file your Electronic Export Information through the Automated Export System for all RS2, CC1 and CC2 exports to India even though such exports no longer require an export license.

Owner of Allied Components Faces 20 Years Behind Bars for Lying to the Department of Defense and Sharing Military Submarine Component Information with India

Wednesday, December 4th, 2013 by Brooke Driver

By: Brooke Driver

Mama always told you that lying never pays, and Robert Luba would certainly agree. The 47-year-old owner and general manager of the New Jersey-based company Allied Components LLC admitted in court on October 23 to illegally emailing information to India about a component of a nuclear-powered U.S. submarine and providing faulty aircraft parts to the U.S. Defense Department.  Allied Components had been contracted by the Department of Defense to manufacture a wing-pin product for an F-15 fighter jet, but chose to slack and ordered the product from an Indian-based company—and did not even do that well. The Indian-made wing-pins did not match the specifications for the aircraft, putting its potential pilots and passengers in danger. Prosecuting attorney Paul Fishman articulated the gravity of Luba’s corner-cutting in a released statement:

“The conduct admitted by Luba shows a callous disregard for the safety of our armed forces…By recklessly providing sub-standard parts for sophisticated weapons systems and sharing sensitive information with a foreign state, Luba not only jeopardized the lives of men and women on the front lines of our national defense, he put all Americans at risk, all in the name of making a buck.”

Luba has already agreed to pay the defense department $173,000, a large chunk of which will go to repairs for the dysfunctional F-15s, but he will suffer a much higher price on his sentencing date, February 19. At this time, the presiding judge can choose to demand that Luba pay up to $1,250,000 and serve up to 25 years in prison for his combined violations.

New Jersey Woman Abuses Church Website by Illegally Exporting Military Technical Data

Wednesday, December 4th, 2013 by Brooke Driver

By: Brooke Driver

Well, here’s a new one, folks. New Jersey resident Hannah Robert was charged with illegally exporting ITAR-controlled technical data—specifically, drawings of parts for an F-15 fighter jet, a Chinook helicopter and other military aircraft, as well as nuclear submarines—to a manufacturer in India. Of course, this type of crime is nothing new; it’s Robert’s execution that is quite unique.

Beginning in October of 2010, Robert posted the illicit technical drawings on her Camden County church’s website, where she was a volunteer web administrator. She provided her Indian contact with the login information for the password-protected site, which enabled him to access and download the files from India, totaling in the thousands by the end of the scheme. One wonders what excuse Robert will concoct to get out of this one. Multitasking gone wrong? Sleeptyping?

$100,000 Penalty for 14 Violations Committed by Meritor of Troy

Tuesday, May 3rd, 2011 by Anna Barone

The Commerce Department’s Bureau of Industry and Security (BIS) has recently announced that Meritor of Troy, MI has committed 14 violations of the Export Administration Regulations. They have agreed to pay a $100,000 civil fine to settle allegations. The company recognized their own offenses, disclosed the violations and fully cooperated with the investigation of the Office of Export Enforcement.

Between August 2005 and November 2006 there were two instances in which Meritor shipped products, that were controlled for national security reasons, to China and France. Also, between December 2005 and May 2006 there were twelve instances in which the company exported technical data, that was controlled for national security reasons, to Italy, India, China, Mexico, South Korea and Brazil.

Meritor is a global leader in providing innovative drivetrain mobility and braking solutions for original equipment manufacturers of trucks, trailers and specialty vehicles, as well as the related aftermarkets in the transportation and industrial sectors.  They celebrated a centennial anniversary in 2009.

More Information Available:

http://www.bis.doc.gov/news/2011/bis_press03222011.htm

Obama Announces Changes in US Export Control Policy for India

Wednesday, November 24th, 2010 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. (more…)

Great Scott Batman, Another Illegal Valve Exporter!

Tuesday, September 7th, 2010 by John Black

You don’t have to have Batman’s “bat senses” to figure out that the pump and valve industry is doing their part to keep US Government export enforcement personnel busy.  This time, the culprit is Tyco Valves & Controls (TVC) with 26 violations for illegal exports of ECCN 2B350 butterfly valves, ball valves, and valve assemblies to China, the UAE, Mexico, India, Israel, Brazil, Singapore, Chile, Jordan and El Salvador. The violations occurred between January 2005 and March 2007.

In this case, the US Government did not have to bring in Batman to find these illegal exports.  TVC voluntarily disclosed its violations to the Department of Commerce and agreed to pay a $218,000 penalty to settle the charges.

BIS Suspends Validated End User Status for Two Companies

Friday, February 19th, 2010 by Danielle McClellan

BIS recently amended the EAR to suspend 2 companies Authorized Validated End-User (VEU) status. Aviza Technology China and GE India’s GE Fanuc Systems PVT Ltd. were both added to the VEU program in 2009 and because of material changes at the companies, they have been suspended from the program. BIS states that the suspension is not the result of any prohibited activities by the two companies. The VEU program is very strict and often a material change that could affect a company’s status could be a change in management or failure of the company to provide financial reports on a timely basis.

So, while it is difficult to get on the VEU list, it is apparently easy to get kicked off the list—VEU’s make sure you submit your financial reports on time!

Federal Register: http://edocket.access.gpo.gov/2009/E9-30487.htm

Keithly Pays $125,000 for Dealing with Prohibited Party on Entity List

Friday, February 19th, 2010 by Danielle McClellan

Keithly Instruments International Corp. (KIIC), located in Bangalore, India has been charged with one violation of evasion. The charging letter describes a scheme devised by KICC’s manager at the time, Mugar Ashok to export electronic instruments classified as 3A992 and EAR99 from the company’s US parent company to the Vikram Sarabhai Space Center (VSSC), who is currently designated on BIS’s Entity List (Supplement No. 4 to Part 744). (more…)