Download us russian seminar on nuclear export control issues

Bureau of Industry and Security
U.S. Department of Commerce
Rick Shimon
Special Agent In Charge
Washington Field Office
May 22, 2006
National Security
A shared responsibility between Exporting Community
and Law Enforcement
Export Enforcement
…task is to prevent the
export of U.S. goods and
technology that may be used
by rogue states or terrorists
to make chemical, biological
or nuclear weapons
What we can do for you…
1)
We can assist you in avoiding illegal transactions.
2)
We can assist you in avoiding negative publicity.
3)
We can assist you in avoiding fines and prison
4)
We can assist you in avoiding a situation where
your company has to pay enormous costs for legal
representation resulting from a criminal or
administrative proceeding.
Illinois Tool Works Inc.
PAN
AVIATION
AVS
INDUSTRIAL SCIENTIFIC
CORPORATION
HOUGHTON CHEMICAL
INTERNATIONAL
Bet
Air
ATT Communications
OMEGA
CCP
SWISSCO
JML
FREIGHT
ICS
INC
Why do we need controls on
Dual-Use commodities?
Top Cape Technologies
Cape Town South Africa
Owner: Asher Karni, (b 1954)
• Israeli citizen -- MBA from Tel Aviv Univ
• Major in the Israeli military (‘71 to ’85)
• Emigrated to South Africa to work for a Jewish charity
• Worked for Eagle Technology -- specializes in obtaining
sophisticated sensitive equipment…terminated
• Lived on Ocean View Drive, Cape Town SA in exclusive
“Millionaires’ Row”
Pakland PME Corporation
Islamabad, Pakistan
Owner: Humayun Khan
• Supplies Pakistan’s conventional and nuclear weapons
programs
• Connected to Al Jammu and Kashmir Muslim Conference:
Pakistani opposition party that supports extremist
fighters in Kashmir, a disputed territory between
Pakistan and India
The Commodities
Triggered Spark Gap
• ECCN 3A228
• South Africa
– No License Required
• Pakistan and UAE
– License Required
• End Uses:
– Lithotripsy Machines
– Nuclear Device Triggering
• $447 a piece
The Commodities
High Speed Oscilloscopes
• ECCN 3A292
• South Africa
– No License Required
• Pakistan
– License Required
• End use
– Electronics testing
– Nuclear detonation testing
The Crime…
Players:
Asher Karni and Humayun Khan
Crime:
Conspire to ship 200 nuclear trigger
devices and numerous oscilloscopes to
nuclear end users in Pakistan
The Scheme…
X
$$
$$
$$
The rest of the story…
Asher Karni
• Arrested…Jan 04
• Guilty Plea…Aug 04
• Sentenced 3 years Fed Prison… Aug 05
– Old Sentencing Guidelines
•
“I felt shock and horror…how such a devout
Jew could be supplying nuclear triggers for the
nuclear weapons of a staunch Islamic country.”
-- Michael Bagraim, Chairman of the
South African Jewish Board of Deputies
ASHER KARNI
Inmate # 32338-016
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
Grand Jury
INDICTMENT
UNITED STATES OF AMERICA
v.
HUMAYUN A. KHAN, Defendant
VIOLATIONS:
18 U.S.C. § 371 (Conspiracy)
50 U.S.C. (Export Admin Act)
Export Enforcement
Investigations and Sanctions
• Criminal Investigations
• Sanctions
– Criminal fines and imprisonment
– Civil fines and penalties
– Denial of export privileges
What Makes a Criminal Case?
• Willfulness
• Deliberate Ignorance (Self Blinding)
• Corporate Knowledge
Press Release on a Criminal Case:
“ They did everything they could to evade (the) regulations
There really was a problem with the corporate culture here – a
failure to take responsibility – all the way up to the CEO.
They made up documents, destroyed documents and made
false statements.”
- Julie Myers, Asst. Sec. Export Enforcement
Criminal Penalties
Patriot Act - Reauthorization Act of 2005
– Criminal penalty increases from 10 years to 20 years.
– Criminal monetary penalties stay the same.
– $250,000 fine for individuals and/or
– 20 years imprisonment
– $1 Million or five times the value of the exports
involved for firms
Administrative Sanctions
• Strict Liability -- knowledge is not a prerequisite
for imposition of an administrative penalty
• Administrative violations must be proven by a
preponderance of the evidence
• 5 year statute of limitations administrative
enforcement cases
Administrative Penalties
Patriot Act - Reauthorization Act of 2005
– Civil penalties increase from $10,000 to $50,000 per
action
– $120,000 for violations involving national security
controlled items
Denial of Export Privileges
“…export privileges under the Export Administration Regulations (EAR)
have been denied for 20 years for violating and conspiring to violate the EAR for the
unauthorized export and attempted export of industrial commodities from the
United States to Iran…”
Standard Denial Order covers all items (commodities, technology, and software)
subject to the EAR …there is no limit on how long we can deny export privileges.
Proliferation Security
Initiative
Dec 2002: Spanish marines seize
North Korean vessel So San
– Thousands of bags of cement
camouflaged the So San's more
important cargo: 15 SCUD missiles
bound for Yemen
– Hidden cargo also included missiles,
fuel cells and conventional explosive
warheads
Proliferation Security
Initiative
Mission:
• Impede and stop shipments of WMD, their delivery
systems (e.g., missiles), and related materials (dual-use
goods) to and from proliferators
• 60+ PSI supporting nations are focused on all forms of
transport (maritime, air, and land shipments)
Legal Authority:
• Uses existing laws -- does not grant new authorities to
participating states
PSI - BBC China
October 2003: German freighter, BBC
China, intercepted in Mediterranean
by U.S., Italian, and British agents.
– U.S. Navy ship escorted BBC China to an Italian
port
– Agents seized thousands of Uranium-enrichment
centrifuge parts destined for Libya
– German company BBC Chartering and Logistics
was very cooperative with investigators
– Deal had been arranged by A.Q. Khan, the creator
of Pakistan’s nuclear bomb
Proliferation Security
Initiative
Where do you fit in to PSI?
• All parts of the supply chain must be vigilant to
identify ‘bad-actors’ in order to prevent the
proliferation of WMD materials
• Governments want to partner with industry to
minimize financial impacts and disruptions
“There is the easy way…or the hard way…”
True or False?
1. BIS permits exporters to use the “When in Doubt
Use NLR” rule to ensure shipments are not
delayed?
2. You shouldn’t contact Export Enforcement to
report your sleazy competitor, who always seems
to secure those deals that you refuse to take,
because nobody likes a snitch…
True or False?
3. Stopping a customer in mid-sentence when he is
discussing the end-user of a particular transaction
is an example of Self-Blinding?
4. False statements on an SED may result in both
criminal charges and administrative sanctions?
5. OEE Special Agents are willing and eager to meet
with you and your company to discuss export
requirements?
A Shared Responsibility
Keeping the most sensitive goods
out of the most dangerous hands
Report Suspicious Transactions
Washington Field Office - (703) 487-9300
24 Hour Hot Line - (800) 424-2980
www.bis.doc.gov