Archive for the ‘Aerospace’ Category

The Dust Settles (a Bit) on New Export Restrictions on China

Wednesday, June 20th, 2007 by John Black

OK, it has been a month since the US slapped new export controls on China to attempt to slow the growth of the Chinese defense industry, and thus hamper the growth of Chinese military capability. A considerable amount of concern about the rule was exhibited when more than 700 persons joined in the BIS conference call to discuss the new rule on June 20. Since the rule was published in the June 19, 2007 we have had plenty of opportunities to hear the US Government and other parties focus on how the new rule relaxes exports to China by establishing a procedure for license-free exports to Validated End-Users (VEUs) even though no VEUs actually exist.

What does exist today, and what companies must comply with today, is a new approach to restricting certain export to China that are imposed by the new set of export restrictions on China. So, let’s look at the details of the new requirements.

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Posted in Aerospace, BIS, China, Defense Trade Controls, EAR, Export License, Information Technology | Comments Off

DDTC Publishes Guidance for Dealing with Alcatel Alenia Space Name Change

Wednesday, May 30th, 2007 by Jill Kincaid

Company Name Changed to Thales Alenia Space

In an effort to facilitate continued licensed defense trade between the United States and the recently renamed Thales Alenia Space, the DDTC has published guidance for dealings with the company and its subsidiaries.

Satellite designer and manufacturer Alcatel Alenia Space SAS (AAS), has its stock held by Alcatel-Lucent Participations SA (France) and Finmeccanica SpA (Italy). Subsidiaries of AAS are located in France, Italy, Belgium and Spain. As the result of a transaction reassigning its current stock, AAS has changed its name to Thales Alenia Space. Subsidiaries have also changed their names accordingly.

For the purposes of exporting against valid licenses after the transaction closing dates (April & May 2007), exporters should note the name change at the time of the AES filing. Submitting a DSP-119 is not necessary.

Example: “Thales Alenia Space France” formerly “Alcatel Alenia Space France”

For the purposes of current TAA and MLA agreements, an amendment must be submitted to each agreement to reflect the name change. Failure to submit the necessary amendment within 60 days of the transaction closing date for each entity will result in the termination of the agreement.

For the purposes of agreements currently in review, those pending approval will be processed under the submitted name. Once approvals are granted, exporters must change the name to the new entity before execution of the agreement or amendment and must note the change in the cover letter of the submission of the executed agreement.

For new licenses & agreements, exporters must supply the new legal name of the entity. New agreements submitted 60 days after specified closing dates with the incorrect name will be returned without action.

The relevant closing dates for entities affected by this change are as follows:

  • Alcatel Alenia Space in France on April 6, 2007
  • Alcatel Alenia Space in Belgium on April 11, 2007
  • Alcatel Alenia Space in Spain on April 11, 2007
  • Alcatel Alenia Space in Italy on May 4, 2007

Affected Companies and their former and current names can be viewed, along with the complete guidelines, at:

Posted in Aerospace, Defense Trade Controls, Telecommunication | Comments Off

Lockheed Martin Memory Stick Found at Gas Station

Thursday, April 19th, 2007 by Jill Kincaid

Lockheed Martin reports that no sensitive information was on a memory stick which an Azle, Texas truck driver found at a gas station. An employee of the Bethesda, MD based Lockheed who works in the jet program inadvertently dropped the stick. The truck driver, Glen Frausto, found the stick and plugged it into his home computer. He was surprised enough to call the FBI when he saw that the stick contained data and diagrams pertaining to a military jet being developed by Lockheed Martin.

At this point, the FBI is not investigating any wrongdoing or release of classified information. Lockheed stated that the employee had not broken any rules by having the memory stick with him. The jet referred to is the F-35 joint strike fighter which is currently involved in test flights. It will likely replace older jets currently being used by the military such as the F-16 and F-18.

(I wonder if anybody checked the citizenship of the “Texas” truck driver? —John Black)

Sources:

Posted in Aerospace, Defense Trade Controls | Comments Off

Indian National Indictments Muddy the Water for US/India Nuclear Deal

Friday, April 6th, 2007 by John Black

It appears that the indictments of four Indian nationals for export violations have muddied the water on the US-India nuclear cooperation talks. The talks between India and the US are important to India in terms of its civil nuclear capacities. Good relations with the US could pave the way for the lifting of restrictions by the Nuclear Suppliers Group (a group of countries who implement guidelines for exports of nuclear items and nuclear-related items to prevent the proliferation of nuclear weapons) on exports to India. Symbolicly, at least, successful talks with the US could also signal that the United State implicitly accepts the legitimacy of the Indian nuclear weapons program, even though the Indians (like the Pakistanis and Israelis) developed their nuclear weapons in direct violation of the Nuclear Non-Proliferation Treaty.

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Posted in Aerospace, India, Information Technology, Nonproliferation & Nuclear, NSG, Violations & Fines | Comments Off

ITAR Regulations on Dual-Nationals Could Cause Delays in Canadian Contracts

Monday, March 26th, 2007 by Jill Kincaid

US ITAR regulations are causing delays, and possible cancellations, in defense contracts between the United States and Canada. Briefing notes to Canada’s Defence Minister, Gordon O’Conner from last year show that American regulations have caused so many delays in Ottawa that the Canadian government had considered canceling a project to replace their 40-year old Sea King helicopters with 28 American-built Sikorsky Cyclone helicopters.The situation is resulting from the conflict between the ITAR’s regulations on dual-nationals and Canada’s anti-discrimination laws. US regulations prohibit Canadians with dual citizenship from having any contact with regulated materials or information. This has created a real dilemma for Canadian defense companies who risk breaking Canadian laws by releasing employees from working on sensitive US contracts. Sources close to the “Sea King” project state that juggling employees to comply with US regulations is costing Canadian companies a lot in time and money.

Canadian officials have refused to sign certain TAA’s and licenses which contain ITAR restrictions because they say they call for discrimination against Canadian citizens. This, also, is causing delays on the production and delivery of the Cyclones.

As General Motors in London, Ontario was recently fined $20 million for failing to comply with ITAR regulations relating to dual-nationals, Canadian companies know well the risks of non-compliance.

Upcoming Canadian purchases of Boeing helicopters and Lockheed-Martin planes could also be hindered by the problems.

Source:

  • www.globeandmail.com, March 26, 2007

Posted in Aerospace, Canada, Defense Trade Controls, Dual/3rd Party Nationals, ITAR, TAA | Comments Off

US Seeking to Sell Arms to Allies in the Persian Gulf

Wednesday, March 21st, 2007 by Jill Kincaid

In an effort to send a signal to Iran, the State Department is seeking Congressional approval to sell arms to US allies in the Persian Gulf. Countries such as Saudi Arabia, Qatar, Kuwait, Bahrain, Oman and the United Arab Emirates could have their defenses bolstered through the purchase of sophisticated air and missile defense systems, advanced early warning radar aircraft and light coastal combat ships. It is also believed that Northrop Grumman’s E-2D Hawkeye 2000 early warning aircraft is under consideration for sale. The United Arab Emirates had tried to acquire this aircraft in 2003 but the deal fell through due to the US Navy’s hesitation to sell the necessary communication software.

US officials have been rather quiet about the proposed arms sales. This could be due to the concern that building up Iran’s neighbors could bring the US closer to an Iranian confrontation. Officials state the need for Congressional support and the need for a low level of publicity from the countries involved as the reason for being so tight-lipped. Several countries have been reticent about agreeing to sales because of the fear of sending a message of aggression to Iran.

Source:

Posted in Aerospace, Defense Trade Controls, Iran, Kuwait, Qatar, Saudi Arabia, UAE | Comments Off

Libya Gets Slightly Better Treatment under the ITAR

Wednesday, February 7th, 2007 by Jill Kincaid

On February 7, 2007, the Department of State amended the ITAR regarding its trade policy with Libya. In May of 2006, the US rescinded Libya’s designation as a state sponsor of terrorism. As a result of this, Libya has been removed from sections 126.1(a) and 126.1(d) of the ITAR and added to 126.1(k). This specifies the following:

“It is the policy of the United States to deny licenses, other approvals, exports or imports of defense articles and defense services destined for or originating in Libya except, on a case-by-case basis, for:

  1. Non-lethal defense articles and defense services,
  2. 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 aircrew) as spare parts for lethal end-items.”

As Libya is still proscribed in 126.1, exemptions other than 123.17 do not apply with respect to articles originating in or for export to Libya. Also, in terms of proposed sales, the requirements of 126.1 still apply.

Federal Register notice

Posted in Aerospace, Defense Trade Controls, Federal Register, ITAR, Libya | Comments Off

Great Wall Airlines Removed from OFAC Specially Designated Nationals List

Tuesday, December 12th, 2006 by Jill Kincaid

As of December 12, 2006, Great Wall Airlines (aka Changcheng Hangkong) was removed from OFAC’s Specially Designated Nationals list. We reported in August of this year that the airline had been added to the list for “blocking property of weapons of mass destruction proliferators and their supporters”. The parent company, Great Wall Industry Corp. (which was on the list prior to Great Wall Airlines being added) had been suspected of providing assistance to the missile program in Iran. The US decided to act against the airline for this reason. Great Wall Airlines Company reportedly suspended operations three days after being added to the list.

Posted in Aerospace, China, Nonproliferation & Nuclear, OFAC | Comments Off

Britain Requires Sensitive Technology from US for Fighter Aircraft Deal

Friday, December 8th, 2006 by Jill Kincaid

Britain is threatening to pull out of a $276 billion deal to purchase the Joint Strike Fighter from the United States if the US doesn’t allow them “operational sovereignty”, or access to sensitive technology centered around the advanced mission systems on the aircraft. President Bush and Tony Blair agreed in the summer of 2006 that the UK would have access to the needed information, yet it is still unclear whether it is going to be provided. The Defense Procurement Minister, Lord Drayson, will make a visit to Washington , DC in late December to try to resolve the issue. He says that the deal is contingent on Britain getting the information that it needs. Britain had plans to purchase 138 of the aircraft by the year 2013. Lockheed Martin is the lead contractor in what could be the largest US defense contract to date.

(Sources: Airforcetimes.com: December 8, 2006)

Posted in Aerospace, Defense Trade Controls, UK | Comments Off

Canada Torn between Complying with ITAR and Possible Lawsuits from Citizens With Dual Nationality

Tuesday, November 28th, 2006 by Jill Kincaid

According to the Ottawa Citizen, a pending purchase of U.S. helicopters and airplanes by the Canadian military is raising all kinds of concerns from the Canadian Defence Department. The essence of the concern is whether complying with the U.S. restrictions under ITAR (International Traffic in Arms Regulations) will cause Canadian Defense Companies, or their government, to act contrary to laws specified in Canada ’s Charter of Rights and Freedoms

The restrictions in question deal with who in Canada can see classified U. S. data such as repair manuals and specifications on equipment from the U. S. According to ITAR, Canadians with dual citizenship in an embargoed country, such as Cuba, Iran or China, can not access restricted data. This presents a problem in that the Canadian government cannot legally discriminate against these citizens with dual citizenship according to the Canadian Charter of Rights and Freedoms. This could open them up to legal action from employees, or potential employees, who are being denied access to information and/or jobs.

The Canadian government is proposing a security clearance process for government employees who may be affected by this. There has been no mention yet of whether the same considerations would be given to the 70,000 civilian workers in Canada’s aerospace and defense private sector. According to a leaked memo from the CDD (a copy of which was obtained by CanWest News Service), Canadian officials are very upset about the extent to which complying with these regulations will hinder their operations. They have even suggested that they will purchase their equipment from a source other than the U. S.

At this point, the United States Department of Defense does not seem to be willing to make concessions on its ITAR policies. Greg Suchan, Deputy Assistant Secretary and Acting Assistant Secretary of the Bureau of Political-Military Affairs at State, has stated that he hopes a solution can be found, but that “we have a feeling in our gut” about the connection between a person’s nationality and his or her loyalties.

The planned purchase of equipment from the United States by the Canadian military totals $17 billion. Negotiations are underway to find a solution that will work for both Canada and the United States.

Posted in Aerospace, Canada, DDTC, Defense Trade Controls, Dual/3rd Party Nationals, ITAR | Comments Off

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