The
Center forInternational Trade & Security
Export
ControlNewsletter No. 59
July
25, 2005 –August 8, 2005
U.S.
Export Controls
1.
“Inconsistent license checks for exports create security gap,
reportsays,” Associated Press, 26 July 2005.
2.
“U.S. DoD hardens stance on China,” Flight International, 26 July
2005.
3.
“President Bush renews Export Administration Act,” UK Inquirer, 4
August2005.
4.
“South African resident sentenced for trafficking in nuclear
detonators,other commodities controlled for nuclear non-proliferation
reasons,” US FedNews, 5 August 2005.
5.
“Aerospace Industry wants help from administration,
Congress,”Washington Wire, 2 August 2005.
International Export Control Development
1. “Living
in the shadow of the bomb,” Financial Times, 6 August 2005.
2.
“Pakistani held in technology export case,” Boston Globe, 26 July
2005.
South Korea
3.
“South Korea signals interest in purchasing four Global Hawk
UAVS,”Inside the Air Force, 5 August 2005.
4.
“South Korean company denies report on export of radioactive
materialsto Iran,” BBC Worldwide, 28 July 2005.
Russia
5.
“Gov’t raises fines for export control legislation abuse,”
Itar-Tass, 28July 2005.
6.
“Russian and U.S. customs officials exchange experience,” RIA
Novosty, 1August 2005.
United Kingdom
7. “Farewell to arms plan,”
GuardianWeekly, 29 July 2005.
U.S.
Export Controls
1.
“Inconsistent license checks for exports create security gap,
reportsays,” Associated Press, 26 July2005. (for
personal use only)
Homeland Security agents do not consistently
screensensitive chemical and biological materials to ensure they are being
legallyexported, the department's inspector general said Tuesday.
Failure by Customs and Border Protection
inspectors toupdate internal databases has led to security gaps in
determining whetherchemical and biological exports are properly licensed, the
Homeland SecurityDepartment's internal watchdog said in a report.
The exports, which have military and civilian
uses, comeunder stricter controls when they are sent to countries and
entities of concernto U.S.
national security.
The department "does not consistently
enforce federalexport licensing laws at all U.S. ports of exit," acting
Inspector GeneralRichard L. Skinner said in the report.
Much of the seven-page document was redacted,
and itcontained no specifics about the scope and frequency of such lapses.
Monitoring of the exports "is limited by
inadequateinformation and staff resources," Skinner found.
The Bureau of Customs and Border Protection is
an arm of theHomeland Security Department.
Customs spokesman Pat Jones said the bureau is
updating itsdatabases to make sure that licensing information for chemical
and biologicalexports is easily available at all U.S. ports.
The internal report "wants us to review
our resourcesand examine our export enforcement procedures," Jones said.
"Andwe're doing that."
Part of the problem is trying to check licenses
of millionsof dollars worth of goods that leave the United States
on a daily basis, saidDr. Scott Jones of the Center for International Trade
and Security at theUniversity of Georgia.
He also questioned whether agents receive
extensive trainingto help them identify which chemical and biological
products can be used formilitary purposes - and should come under closer
scrutiny.
"Things are leaving the country in huge
volume, andideally, Customs officers are looking for licenses and making sure
everythingis inspected," Jones said. "But overall, you just can't
catcheverything."
Daryl Kimball of the Arms Control Association
in Washingtonsaid the security gap "illustrates the difficulty of using
export controlsas a main line of defense against the spread and development
of illegalchemical and biological agents." He said the U.S. needs a
multilayeredapproach against potential weapons proliferation.
2. “U.S. DoD hardens stance on China,”
Flight International, 26 July 2005. (forpersonal
use only)
US
opposition to a European Unionproposal to lift an arms embargo on China
stiffened last week, but that stancecould change if European governments
adopt export control laws, according tothe US Department of Defense. A DoD
report released on 19 July raises alarms aboutBeijing's growing military
strength, which prompted Secretary of Defense DonaldRumsfeld to again call on
the EU to reject a proposal to lift the 16-year-oldexport ban.
However, Lt Gen Jeffrey Kohler,head of the US
Defense Security Cooperation Agency (DSCA), which controlsexports of
sensitive US
arms equipment to foreign governments, says the disputecan be avoided. If
proper controls are created before the ban is lifted,"there's not a
problem that I'm aware of", he says. "It's notthat we care about
everything that Europe could export to China. We care aboutsome very
sensitive technology. We care about [China's] ability to improvetheir
military capability faster than they are doing today."
Sensitive equipment includesradar, stealth,
submarines and engines, Kohler says. The DoD report adds thatWashington is
concerned about the transfer of airborne early-warning aircraft,advanced
space technology and electronic components for precision-guidedmissiles.
"In my opinion, the types of controls that the Europeans haveoffered so
far don't meet our requirements to ensure that those things thattend toward
the very high end of technology are controlled, limited and notexported to China,"
Kohler told Flight International. "We're lookingfor a little bit more
than a code of conduct. We're looking for laws thatprohibit export and that
there are penalties to be paid if that happens ñ notthe fact that
there is a code that may or may not be enforced."
The DoD report concludes that theconsequences of
lifting the embargo are "serious and numerous" andcriticises the
EU's enforcement tools as "inadequate". InvolvingEuropean defence
companies in Chinese arms competitions may increase thepressure on the EU to
relax export control restrictions, it says. China
alsowould have more access to sensitive technology, which then could be
shared withBeijing's arms trading partners such as Iran,
Sudan and Zimbabwe, the
reportsays.
3.
“President Bush renews Export Administration Act,” UK
Inquirer, 4 August 2005. (forpersonal use
only)
GEORGE BUSH renewed the
ExportAdministration Act, citing a continuing national emergency as his
reasons forextending it.
The act, passed in
2001,creates an export control list for what are deemed to be sensitive
UStechnologies.
Those are deemed to be
itemsthat contribute to the military potential of other countries, or to
preventweapons proliferation and attack terrorism.
The act also created an
officeof technology evaluation, consisting of experts to get and analyse
informationon such technology.
Which technologies are covered remains unclear,
but in hisstatement, Bush said that he'd declared a national emergency on the
17th ofAugust 2001, "with respect to the unusual and extraordinary
threat to thenational security, foreign policy, and economy of the United States."
4. “South
African resident sentenced for trafficking in nuclear detonators,other
commodities controlled for nuclear non-proliferation reasons,” US
FedNews, 5 August 2005. (for personal use
only)
The U.S. Department of Homeland Security's U.S.
Immigrationand Customs Enforcement issued the following press release:
<…>
In September 2004, Karni pled guilty to a five-countInformation
charging him with conspiracy and export violations arising out ofhis unlawful
exports of U.S. origin commodities that are controlled for
nuclearnon-proliferation reasons to Pakistan and India. Karni faced a
sentencing rangeof 87 to 108 months under the United States Sentencing
Guidelines. However,Judge Urbina reduced his sentence to reflect Karni's
substantial assistance tothe government.
"Yesterday's sentencing shows that a
prison cell awaitsanyone who illegally trades in technology with military and
nuclearapplications," said Kenneth L. Wainstein, United States Attorney
for theDistrict of Columbia.
"Our law enforcement personnel and theircounterparts overseas will spare
no effort to stamp out the global threat posedby this black market
trade."
"The proliferation of nuclear components
is not only ahomeland security threat, but a global threat. This case in
particular raisedserious concerns. The technology involved, the destination
of these goods, andthe clear efforts to disguise the trail of the shipments
raised the stakes evenhigher," said Michael J. Garcia, Department of
Homeland Security AssistantSecretary for U.S. Immigration and Customs
Enforcement (ICE).
"Countering nuclear proliferation is a top
priority ofthe Commerce Department's export control enforcement
efforts," said WendyL. Wysong, Acting Assistant Secretary of Commerce
for Export Enforcement."This wide-ranging and thorough investigation and
prosecution highlightsboth the Department's ability to use our unique
knowledge to bring those whoenable the spread of nuclear weapons related
technology to justice, and thepartnership between the Commerce Department and
industry to keep the mostsensitive U.S. commodities out of the most
dangerous hands."
According to the criminal information to which
Karni pledguilty, he was the owner of a firm in Cape Town, South Africa,
known asTop-Cape Technology ("Top-Cape"), which specialized in the
import andexport of high-end electronics products. Sometime around 2002,
Humayun Khan,the owner and chief executive officer of an Islamabad, Pakistan,
business knownas Pakland PME Corporation ("Pakland")approached
Karni and inquiredwhether Karni would help him acquire certain models of
oscilloscopesmanufactured by Tektronix, Inc. ("Tektronix"), of
Beaverton, Oregon.Because these particular models of oscilloscopes have
applications in thetesting and development of nuclear weapons and missile
delivery systems, theDepartment of Commerce requires anyone seeking to export
them to certaincountries, including Pakistan, to obtain a license. Khan, who
was an authorizeddistributor for Tektronix in Pakistan, was well aware of that
licensingrequirement.
Karni agreed to assist Khan in obtaining the
Tektronixoscilloscopes, even though Khan told him that they were subject to U.S.
exportcontrols and warned him not to disclose the true destination of the
products.
In March 2003, Karni obtained one of the models
ofcontrolled oscilloscopes from a firm in Plainview, New York.
He directed thatthe firm send the oscilloscope to Top-Cape in Cape Town, South Africa. Shortlyafter its
arrival in South Africa,
Karni re-exported the product to a companyin Pakistan that Khan had
designated. At no time during this transaction dideither Karni or Khan obtain
a license from the Department of Commerce in theDistrict of Columbia
for this export to Pakistan.
In August 2003, Karni acquired two additional
controlledTektronix oscilloscopes in the United
States and diverted them to a Khancustomer in Pakistan through South Africa without obtaining
the necessarylicense. In addition, throughout 2003, Karni and Khan worked to
fill a $1.3million order for controlled Tektronix oscilloscopes for a third
Khan client inPakistan.
In June 2003, Khan sent an e-mail to Karni
asking him topurchase triggered spark gaps for a customer in Pakistan.
Triggered spark gapsare high speed electrical switches that are often used in
a medical deviceknown as a lithotripter, which doctors utilize in treating
kidney stones.Triggered spark gaps also have military applications. One such
application isas a detonator for nuclear weapons. Accordingly, the Department
of Commercecontrols the export of triggered spark gaps to certain countries,
includingPakistan, for nuclear non-proliferation reasons. Exports of
triggered sparkgaps to South Africa,
unlike Pakistan,
are not prohibited.
The triggered spark gaps that Khan sought were
manufacturedby Perkin Elmer Optoelectronics of Salem, Massachusetts
("PerkinElmer"). At Khan's direction, Karni first made inquiries of
Perkin Elmer'sFrench sales representative. The sales representative quoted
Karni a price, butalso advised him that the spark gaps required a U.S. export license and thatKarni needed to
certify both that the product would remain in South Africa andthat it would not
be used for any nuclear purposes. Karni forwarded thisinformation to Khan and
initially declined to pursue the order. Khan, however,prevailed upon Karni to
continue to find a source for the triggered spark gaps.
In July 2003, an anonymous source informed
agents of theOffice of Export Enforcement (OEE) of the Department of Commerce
and ICE thatKarni was in the process of using a broker in Secaucus,
New Jersey, to obtain200 Perkin Elmer
triggered spark gaps for ultimate shipment to Pakistan
throughSouth Africa. The agents approached
Perkin Elmer, which agreed to cooperate inthe investigation and to render
inoperable the triggered spark gaps that theNew Jersey broker was in the
process of ordering.
In October 2003, the OEE and ICE agents were
able to trackthe first installment of 66 triggered spark gaps as the package
traveled fromthe United States to Top-Cape in South Africa and then on to
Pakistan throughthe United Arab Emirates. <…>
On January 1, 2004, agents arrested Karni as he
entered theUnited States at Denver
International Airport.
On September 14, 2004, he pledguilty under seal to five federal felonies,
including conspiracy to exportcontrolled nuclear technology items to Pakistan. He
also agreed to cooperatewith the on-going investigation. On April 6, 2005, a
federal grand jury sittingin the District
of Columbia returned a four-count indictment
charging Khan withconspiracy and export violations. <…>
5.
“Aerospace Industry wants help from administration, Congress,” WashingtonWire,
2 August 2005. (for personal use only)
The Aerospace Industry Association is appealing
to thePentagon to consider the impact on the shrinking defense
industrialestablishment when it determines its future defense policies and
budgets.
Association president John Douglas said AIA
also is askingthe administration and Congress for help with "a broken
export controlsystem," for relief from an increasing number of "buy
America"procurement
restrictions and to listen to the industry's concerns inconsidering changes
to the defense acquisition process.
Douglas
told reporters that the civil aviation industry isrebounding from a deep
slump, with commercial sales this year expected toexceed his December
prediction of $12 to $13 billion. And although spending onspace programs
still is less than what the industry would like, "at leastwe have a plan
for the future," Douglas said, referring to the program forrenewed
manned exploration that President Bush announced last year. <…>
Douglas also said the industry needed the help
Bush hadpromised to correct an export control process that prevents U.S. firms
fromselling "thousand and thousands" of routine aerospace
components toforeign buyers because they may have potential military use.
The industry has been lobbying for a decade for
changes inthese Cold War restrictions, which make it difficult to compete for
foreignsales in the face of growing international competition.
Competing for international sales would be made
even harderby the provisions that are emerging increasingly from Congress,
particularlythe House Armed Services Committee, that would limit foreign
content inproducts bought by the Pentagon or would restrict overseas sales of
U.S.
goods,he said.
The latest version of those restrictions coming
from theHouse committee would have barred sales of defense-related products
to foreigncustomers who do business with China.
And Douglas
urged the Pentagon to consider the industry'sconcerns during an on-going
study of the defense acquisition system, which iswidely criticized for being
too slow and producing flawed and over-pricedequipment.
International Export Control Development
1. “Living in the shadow of the
bomb,” Financial Times, 6 August 2005. (forpersonal
use only)
Sixty years ago today, an atom bomb exploded
over Hiroshima,killing
80,000 people, mostly civilians. Tens of thousands more died fromradiation
sickness in the years that followed. The memory of that day offers ahorrific
reminder of what is at stake when the nuclear non-proliferation regimecomes
under attack as it is today.
The direct challenge comes from the nuclear
ambitions ofIran and North
Korea. Both expose serious shortcomings in
the non-proliferationtreaty (NPT). It permits non-weapons states to develop
nuclear fuel cycles,allowing them legitimately to proceed to the brink of
weaponisation. If Iranand North Korea
are not made to pull back from the final step, there is adanger of a
proliferation "cascade" in north-east Asia
and the MiddleEast. Hence the importance of the final offer from the EU 3 -
France, Britainand Germany
- delivered to Tehran
yesterday.
Beyond Iran
and North Korea
lies the fear of nuclear weaponsfalling into the hands of terrorist groups
which, unlike even so-called roguestates, cannot be deterred by the threat of
retaliation.
Yet the non-proliferation regime is also being
undermined ina more subtle way by the failure of recognised nuclear powers to
honourcommitments to reduce their arsenals and share peaceful technologies.
The US inparticular is guilty of double standards, last month announcing its
intentionto offer full nuclear co-operation to India, a weapons state outside
the NPT.
This is not to say that a country such as Iran pursuesnuclear weapons out of frustration
with America's
failure to live up to itsobligations. But whatever the motives for seeking
weapons, the more the US isseen to play by the rules the better the chance of
persuading other countriesto change course - and the international community
to help it enforce such achange.
Some US officials think the NPT is no
longer relevant fordealing with today's proliferation challenge. They see the
future in the exportcontrols by the nuclear suppliers group and interdictions
under theproliferation security initiative (PSI).
Yet while the NPT in its current shape is not
sufficient toprevent the spread of nuclear weapons, it should be built on,
not ignored.Interdiction is only as good as intelligence. The ability to
enforce exportcontrols on a global basis, and to gather international support
for sanctionsagainst states seeking the bomb depends on the sense that the US is
actingfairly.
There needs to be a half-way house for India, Pakistan andIsrael, but not one
that encourages other states to reconsider the cost andbenefits of going
nuclear. It would be foolish to assume the general tabooagainst proliferation
fostered by the NPT will automatically endure forever.Moreover, the idea that
there is bad proliferation and not-so-bad proliferationis wrong. The enemy is
proliferation itself. The US
cannot rely on the natureof regimes: Iran
was once a US
ally.
It is now crunch time on Iran. North Korea
looms not farbehind. The more generous the US is to non-weapons states, and
the more willingit is to bind itself to international agreements to end
tests, stop producingfissile material and freeze construction of new
reprocessing facilities, thegreater support it will have in confronting them.
This is not the sole responsibility of the US, however.
Ifthe EU 3 offer fails, they must validate the claim that there are costs forignoring
world opinion on proliferation, and push for tough sanctions at theUnited
Nations.
2. “Pakistani held in technology
export case,” Boston Globe,26 July 2005. (for
personal use only)
A Pakistani national who was allegedly caught
trying to buyfuse detonators and a radar system illegally from a Massachusetts
militarycompany pleaded not guilty to visa fraud at his arraignment yesterday
in USDistrict Court.
Azhar Ehsan, 32, allegedly sought to bring the equipment to
Pakistan.Authorities said his plot unraveled when a representative of the
unidentifiedcompany referred Ehsan to US Customs officials who pretended to
represent acompany that could ship the equipment. Prosecutors say Ehsan made
falsestatements on his visa application when he checked a box indicating he
had nointention to "enter the United States to engage in export
controlviolations, subversive or terrorist activities, or any unlawful
purpose."Ehsan could face deportation. Assistant US Attorney Gregory
Moffatt said afterthe hearing that, "Often times there are people who
broker on behalf of aforeign power. His inquiries would be consistent with
that, but we don't knowthat for a fact."
South Korea
3. “South Korea signals interest in
purchasing four Global HawkUAVS,” Inside the Air Force, 5August
2005. (for personal use only)
The South Korean Defense Ministry recently
discussed withBush administration officials the possibility of buying four
Global Hawkunmanned aerial vehicles as part of a multibillion-dollar arms
package, aPentagon official familiar with the request told Inside the Air
Force thisweek.
The idea of the sale was raised at a session of
an annualdefense meeting between the two countries, called the Security
CooperationCommittee, held in Hawaii in June, the official said.
The high-altitude, long-endurance intelligence,
surveillanceand reconnaissance collector Global Hawk has a wingspan of 116
feet and is 44feet long. The Norhtrop Grumman-made UAV can fly at altitudes
up to 65,000 feetand at speeds of about 340 knots for nearly 35 hours,
utilizing its syntheticaperture radar/ground moving target indicator and
electro-optical and infraredsensors to observe objects on the ground.
The Korea Times first reported on the June
U.S.-South Koreanmeeting in a July 13 article.
While it is considered normal for the U.S. to
sell weaponsystems to other countries, especially allies, the capabilities of
the GlobalHawk lend South Korea's request to a "much more elaborate
process,"according to a State Department official.
There are two tracks a foreign government can
take to buymilitary items from the United States, said the official, who did
not wish tobe identified because it is State Department policy not to discuss
suchrequests. He added he is not familiar with South Korea's specific request.
One is the commercial track, in which case a
U.S. exporterwould apply for an export license, a move that would be
processed like anyother export license. The second is a
government-to-government sale, or foreignmilitary sale. Both tracks would be
submitted to an expansive State Departmentinteragency review taking such
things into account as national security,foreign policy and regional
stability, among others.
However, due to Global Hawk's inherent
capabilities, interms of range and the amount of payload it can carry, it is
regarded as a"Category I system under the Missile Technology Control
Regime(MTCR)," according to the official.
The MTCR aims to limit the spread of ballistic
missiles andother unmanned delivery systems that could be used for chemical, biological,and
nuclear attacks, the official noted. Both South Korea and the U.S. aremembers
of the treaty.
"Under the MTCR guidelines . . . we have
to exercisewhat is called a 'strong presumption of denial' to export to
anyone a CategoryI system," meaning that exports of such items are only
to be approved onwhat the MTCR guidelines deem "rare occasions"
that arewell-justified in the non-proliferation export control terms of the
treaty, heexplained.
Category I UAVs have capabilities exceeding a
300-kilometerrange and can carry a 500-kilogram payload, the official said.
Category II UAVsare those not covered under Category I but are capable of a
maximum range equalto or greater than 300 km. <…>
4. “South Korean company denies
report on export of radioactivematerials to Iran,” BBC Worldwide,28
July 2005. (for personal use only)
Excerpt from article by correspondent Yu
Kwon-ha in Berlinand reporters Pak Pang-chu and So Sung-uk headlined:
"'ROK firm stealthilysells' nuclear arms materials whose exports to Iran
have been banned" bySouth Korean newspaper Chungang Ilbo web site on 27
July
The German weekly Der Spiegel reported on 25
July that a ROKfirm had sold materials for nuclear arms development to Iran,
though exports ofsuch materials to Iran have been banned. The weekly said K
Co. of Korea,specializing in the sale of radioisotopes, had two transactions
with an Iranianfirm. It said K Co. sold nickel 63, a radioactive material, to
an Iranian firm,Partoris, last year and purchased another radioactive
material, tritium, inFrance for transfer to Partoris. <…>
An official of K Co. said, "We sold nickel
63 to anIranian firm after it said it would use it in detecting gas. We
obtained amemorandum from the firm to this effect." He said, however,
"We havenever sold tritium to the Iranian firm, although the firm
inquired of us aboutthe procurement of tritium." The official said,
"K Co. is a firm thathandles only industrial equipment and materials.
Because we are applicable tothe Law on Atomic Energy, we cannot sell tritium.
We have never done any dealwith EADS Sodern of France."
Yi Sun-chong, a subdivision chief-level
official at AtomicEnergy Bureau of the Ministry of Science and Technology
[MST], said,"Since K Co. has not received a MST permit regarding
radioisotope exports,it could be a problem under domestic laws and
regulations if the company hadsold nickel 63." He further said, "H
Co., which is related to K Co.,is an authorized firm, but there has been no
report on the export of nickel 63.We are looking into the situation."
An Sang-chun, another subdivision chief-level
official atthe Atomic Energy Bureau, said, "Upon hearing that K Co.
exported tritium,we launched a probe in January this year but it turned out
not true. If thecompany had exported it stealthily, it could become an
issueinternationally."
A Foreign Ministry official said, "If K
Co. madeunjustifiable transactions, it would amount to having violated the
exportcontrol of the Nuclear Suppliers Group (NSG), in which case the
governmentwould have the obligation to report the truth to the NSG."
<…>
Russia
5. “Gov’t raises fines for
export control legislation abuse,” Itar-Tass, 28 July 2005. (for
personaluse only)
The Russian government has approved of
amendments to thecode of administrative abuse concerning export control.
Justice Minister Yuri Chaika has said these
amendments"enhance the administrative responsibility and better control
mechanismsof this sphere."
The document envisages the possibility of
raisingadministrative fines for export control legislation abuse.
The statute of limitations for this type of
offence will beincreased from six months to one year.
Chaika said Russia's constituent territories
will beempowered to conduct "administrative investigations in this
sphere."
6. “Russian and U.S. customs
officials exchange experience,” RIANovosty, 1 August 2005. (for
personal use only)
VLADIVOSTOK August 1 (RIA Novosti)- A
Russian-American five-day seminar on export control and maritime
portssecurity opened here Monday.
Russian and U.S. customs expertswill exchange views
and experience on the control of weapons of massdestruction and their
delivery systems.
The seminar's agenda comprisesseveral key issues,
including container checks and searches for illegal weaponstraffickers and
practice at the seaport.
The agenda targets customsofficers who deal with the
control of goods and dual-purpose technology.
The Russian Federal CustomsService and the U.S.
Coast Guard initiated the seminar, a spokesman for thelocal customs
department said.
United Kingdom
7. “Farewell to arms plan,” GuardianWeekly,
29 July 2005. (for personal use
only)
Ministers have abandoned a controversialplan to
privatise the Whitehall unit responsible for approving exports of armsand sensitive
technology, officials said.
The idea was to save civil servicejobs, but an
independent consultancy report warned that the sensitivities ofthe work of
the unit, the Export Control Organisation - notably in support ofthe chemical
weapons convention and the International Atomic Energy Agency -"do not
make good candidates for private- sector involvement". <…>