Embed Size (px)
Citation preview
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Counter-Proliferation Investigations
Project Shield America
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
MissionICE Counter-Proliferation Investigations
• Protect the American public from the introduction of WMD and other instruments of terror into the United States
• Prevent proliferating foreign entities and terrorist organizations from obtaining strategic technology, licensable dual-use commodities, weapons, munitions, funds, and technical support that could constitute an immediate threat to national security
• Protect U.S. business interests and revenue
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
PartnershipICE and Private Industry
• An industry outreach program designed to obtain assistance and cooperation from manufacturers, sellers, and exporters of U.S. origin technology, dual-use, and munitions
• Provide an opportunity and forum for private sector input and feedback
• Enhance public awareness of export laws
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
PartnershipICE and Private Industry
• We can assist you in detecting and avoiding illegal transactions, which:
• Cause negative publicity;
• Result in fines, debarment, and/or imprisonment;
• Bring potential significant costs for legal representation resulting from a criminal or administrative proceeding
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Why the U.S. Controls ExportsMilitary / National Security Concerns
To restrict the export of goods, technology, and services that could contribute to the military capabilities of any other country or combination of countries which could result in an imminent threat to the national security of the United States
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Why the U.S. Controls ExportsForeign Policy / Embargos
• To restrict the export of goods and technology where necessary to further the foreign policy of the United States or to fulfill its declared international obligations
• Enhance regional stability
• Terrorist concerns
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
To protect U.S. business interests by preventing loss of U.S. origin technology to countries and entities interested in re-engineering commodities, which can result in the significant loss of revenue to the U.S. economy
0
10
20
30
40
50
60
70
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Profits
Why the U.S. Controls ExportsProtect U.S. Industry
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
U.S. Export LawsArms Export Control Act
• Administered by the U.S. Department of State, Directorate of Defense Trade Controls (DDTC) http://www.pmddtc.state.gov
• International Traffic in Arms Regulations – Title 22 CFR 120-130
• United States Munitions List (USML) http://pmddtc.state.gov/consolidated_itar.htm
• ITAR recordkeeping requirement – Five years from date of export
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
U.S. Export LawsArms Export Control Act
• Title 22 USC 2778
• Requires registration of persons and companies engaged in the business of manufacturing, brokering or exporting defense articles and services
• Requires licenses to export firearms, munitions and technology
• Criminal violations enforced by ICE
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
U.S. Export LawsArms Export Control Act / Brokering
No person may engage in the business ofbrokering activities of United States Munitions Listcommodities or technology without a license,issued by DDTC
• A broker is any person who acts as an agent for others in negotiating or arranging contracts, purchases, sales, or transfers of defense articles or defense services in return for a fee, compensation, or other consideration
• Brokering means acting as a broker and includes financing, transportation, freight forwarding, or taking any other action that facilitates the manufacture, export, or import of a defense service, irrespective of its origin
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
U.S. Export LawsInternational EmergencyEconomics Powers Act (IEEPA)
• 50 USC 1701-1706
• 50 USC App. 2401, Et seq.
• Administered by the Department of Treasury, Office of Foreign Assets Control (OFAC)
• Economic sanctions and embargoes against countries and individuals (i.e. terrorists)
• Current sanctions can be found:
http://www.treas.gov/offices/enforcement/ofac/
• Enforced by ICE
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
U.S. Export LawsExport Administration Act
• Governs the export controls for commercial and dual-use products
• Export Administration Act (EAA) expired in August 1994, however the Export Administration Regulations (EAR) are enforced under IEEPA by Presidential order
• Complete EAR, CCL, and Commerce country chart can be found: www.access.gpo.gov/bis/index.html
• Administered by the U.S. Department of Commerce - Bureau of Industry Security www.bis.doc.gov
• Enforced by ICE and Commerce
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
U.S. Export LawsTrading with the Enemy Act (TWEA)
• 50 USC App. 1 - 44
• Only applies to Cuba at this time
• Administered by OFAC
• No exports or imports authorized without permission from OFAC (humanitarian reasons)
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
U.S. Export Laws Smuggling Goods from the U.S.
• Title 18 USC 554 (Effective March 2006)
• Any export or attempt to export
• The transportation, concealment, transfer, purchase of any merchandise knowing that it is to be exported contrary to any law or regulation
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Technology is "released" for export when it isavailable to foreign nationals in the following forms:
• Visual inspection (such as reading technical specifications, plans, blueprints, etc.)
• Exchanged orally
• Made available by practice or application under the guidance of persons with knowledge of the technology
Project Shield AmericaDeemed Exports / Intangible Transfers
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Export license required under the "deemed export“rule when both of the following conditions are met:
1. Intent to transfer controlled information to foreign nationals while in the United States; and
2. Transfer of the same technology to the foreign national's home country would require an export license
Project Shield AmericaDeemed Exports
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Releases of U.S. Technology:
• Inter-company transfers
• Nonimmigrant employees
• Nonimmigrant students/scholars
• Foreign scientists
• Joint ventures
• Tours of labs
Project Shield AmericaPotential Vulnerabilities
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
FIVE General phases to any export deal
1. Inquiry
2. Negotiation
3. Contracting & sales
4. Shipping
5. Warranty & maintenance
Project Shield AmericaExporting Process
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
• Multiple requests for identical product or multiple buyers
• Information requests for “educational research”
• Uneducated or unfamiliar customer
• “Mom & pop shop” commodity broker
• Uninformed buyer
• Outside normal sales channels
Exporting ProcessInquiry Phase Red Flags
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
• Uninformed buyer
• Unusual payment terms Cash Roundabout wire transfers
• No price negotiation
• Vague or non-existent end-user information
• Refusal to provide end-use application information
Exporting Process
Negotiation Phase Red Flags
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
• Late change in deal terms and/or source of payment
• Request drop shipment
• Refusal to provide end-user certificate
Exporting Process Contracting & Sales Phase Red Flags
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
• Hand-carry of data or equipment
• Drop shipment to holding company or third country freight forwarder
• Inconsistencies across various documents
• Suspect end-user: transshipment location
• Inconsistent packaging or marking request
• Incorrect license designation
• Product does not match SED or license
• Manuals & documentation in wrong language
• Multiple shipments using single license number
Exporting Process Shipping Phase Red Flags
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
• Merchandise returns or repair requests from wrong customer location
• Request for replacement parts to wrong customer location
• Troubleshooting inquiries by e-mail from different end-user or in the wrong language
• Refusal to cooperate with post-shipment verification
• Discovery of item in unauthorized location
Exporting Process
Warranty & Maintenance Phase Red Flags
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
It is UNLAWFUL to:
• Export or attempt to export from the U.S., or to re-export any defense article or technical data, or to furnish any defense service without first obtaining the required licenses from the DOS
• Export or attempt to export from the U.S., or to re-export any dual-use item without first obtaining the required licenses from the DOC
Exporting Violations Consequences of Non-Compliance
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
It is UNLAWFUL to:
• Sell or transfer any export controlled commodity to a person or business within the U.S., knowing it will be illegally exported by that person or business
• Without a license, provide a foreign national access to information or data within the U.S. if the transfer of the same technology to the foreign national’s home country would require an export license
• Violate any of the terms or conditions of licenses or authorization granted by the DOS, DOC or OFAC
Exporting Violations Consequences of Non-Compliance
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Exporting Violations Consequences of Non-Compliance
• Seizure and/or forfeiture of goods
• Imprisonment up to ten years for individuals responsible for criminal violations
• Loss of export and import privileges
• Administrative penalties
• Debarment from government contracting
• Placement of company on “denied parties list”
• Fines up to $1 million per violation or five times the value of the product, whichever is greater
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Export ComplianceYour Role in Compliance
• Know your customer
• Be alert
• Recognize potential illegal exports and diversion
• See that transactions/orders for production parts or technology are handled by export specialists
• Ensure that your export compliance specialists are knowledgeable about current export controls and licensing procedures
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Export ComplianceDue Diligence/Screening
Businesses should screen prospective customers,vendors, suppliers, sub-contractors, salesrepresentatives, consultants, or any party to aproposed export/import transaction against thefollowing lists:
• Specially Designated Nationals www.treas.gov
• Denied Persons List www.bis.doc.gov/dpl
• Debarred Parties List www.pmdtc.org
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Export ComplianceDue Diligence/Screening
Be prepared to answer these questions aboutyour products or services:
• What is the commodity?
• Is the item listed on the USML or the CCL?
• Does the item contain encryption?
• Where is it going, what is the country of ultimate destination?
• Who will receive it, who is the ultimate end-user?
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Be prepared to answer these questions aboutyour products or services:
• Does the end-use involve military applications?
• What, if any, are the civil/commercial applications for the product?
• Is the item specifically configured, adapted, modified, designed, and/or developed for military application?
• If in doubt, submit a “Commodity Jurisdiction Request” to the Department of State at www.pmdtc.org
Export ComplianceDue Diligence/Screening
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Export ComplianceKnown Proliferation Countries
• Iran
• North Korea
• China
• Syria
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Proliferation Security Initiative
•Announced by President Bush in 2003, PSI was formed to create a multi-national effort to interdict illegal shipments of WMD, their delivery systems and related materials
•ICE is the primary U.S. law enforcement agency involved in the interdiction and investigation of “high interest” illegal exports of U.S. origin technology destined to countries of concern
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Export Compliance Potential Transshipment Countries
• U.A.E
• Cyprus
• Jordan
• Malta
• Thailand
• Yemen
• Sudan
• Singapore
• Malaysia
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Project Shield AmericaDesired Chemical & Biological Technology
• Fermenters
• Centrifugal separators
• Safety hoods - Class II or III
• Reactor vessels
• Hastelloy-high nickel alloys
• Double-seal pumps
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Project Shield AmericaDesired Nuclear Technology
• Maraging steel
• Spin-forming machinery
• Beryllium
• Graphite components
• Radiation shielding
• Electron beam welders
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Project Shield AmericaDesired Missile Technology
• Guidance systems GPS/INS 3-axis gyro 3-axis accelerator
• Motors Kevlar Maraging steel Carbon/carbon Carbon/phenolic
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Project Shield AmericaDesired Missile Technology
• Nose cone/re-entry vehicle Carbon/carbon
• Skin Maraging steel
• Solid fuel motor Propellants
• Fins Carbon/carbon
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Project Shield AmericaHow to respond to a suspicious contact
• Keep it neutral
• Quickly contact ICE Special Agents for a controlled and monitored response
• Don’t slam the door
• Save all correspondence and make note of phone calls
• Obtain contact numbers and e-mail with full headers
ICEOffice of
Investigations
Counter –
Proliferation
Investigations
March 2009
Project Shield AmericaContact Information
Immediately report all suspicious export
inquiries to ICE officials at:
1-866-DHS-2ICE
