Can US throttle the illegal export of its technology?

Maybe people are more desperate or maybe there's just too much opportunity to make a quick buck but whatever the excuse, attempts to illegally export technology from the US has gone through the roof.

The Department of Justice this week said it has placed criminal charges or convictions against more than 255 defendants in the past two fiscal years - 145 in 2008 and 110 in 2007. That compares to 40 individuals or companies were convicted of over 100 criminal violations of export control laws in 2005, the DOJ said.  Charges brought in these cases include violations of the Arms Export Control Act, the International Emergency Economic Powers Act (IEEPA), the export control provision of the Patriot Reauthorization Act, the Trading with the Enemy Act, and other laws.

According to the DOJ, the technology sought from the US in these illicit schemes are as diverse as missile and nuclear technology, assault weapons, trade secrets, source code, military aircraft parts, night vision systems, and computer equipment. The improper transfer of these items poses threats to US allies, troops overseas, and to Americans at home. It also undermines America's strategic, economic, and military position in the world, the DOJ said.

In 2008 about 43% of these cases involving munitions or other restricted technology bound for Iran or China. A significant portion of the cases in FY 2008 and in FY 2007 also involved illegal exports to Mexico, the DOJ stated.

The illegal exports bound for Iran have involved such items as missile guidance systems, Improvised Explosive Device (IED) components, military aircraft parts, night vision systems and other materials. The illegal exports to China have involved rocket launch data, Space Shuttle technology, missile technology, naval warship data, unmanned aircraft technology, thermal imaging systems, military night vision systems and other materials. Mexico seems to be the hotspot for illegal exports of firearms, including assault weapons and rifles, as well as large quantities of ammunition, the DOJ stated.

According to the DOJ, the firehose of technology flowing overseas isn't the result necessarily of a coordinated effort by a group of terrorists or even governments but rather private-sector businessmen, scientists, students, and academics from overseas are among the most active collectors of sensitive US technology. Most did not initially come to the US with that intent. Instead, after finding that they had access to technology in demand overseas, they engaged in illegal collection to satisfy a desire for profits, acclaim, or patriotism to their home nations, the DOJ stated.

While the problem is large and daunting, the DOJ and others have been trying to bolster US technological defenses.

Over the past year, the DOJ has been involved in a variety of legislative, regulatory, and policy proposals related to export control and embargos. During 2007, for instance, Congress passed and the President signed into law amendments to the IEEPA, which, among other things, added conspiracy and attempt provisions to the IEEPA as well as enhanced criminal fines and administrative fines for violations of this law, which is a critical export and embargo enforcement statute, the DOJ stated.

The National Export Enforcement Initiative has also resulted in the creation of 15 Counter-Proliferation Task Forces in various judicial districts around the country. In addition, the initiative has resulted in enhanced training for more than 500 agents and prosecutors involved in export control and the creation of new mechanisms to enhance counter-proliferation coordination among law enforcement agencies, export licensing agencies and the Intelligence Community, the DOJ stated.

The NEEI is an attempt to address to complications that can drag down the process of catching and prosecuting these criminals.  According to a GAO report on controlling illegally exported technology, multiple agencies are involved in enforcement and carry out various activities, including inspecting shipments, investigating potential export control violations, and taking punitive actions that can be criminal or administrative against violators of export control laws and regulations.  

Agencies responsible for enforcement have to operate within the construct of a complex export control system, which offers its own set of challenges from the outset. Further compounding this situation is the failure to coordinate some investigations and address a host of other challenges that can lead to a range of unintended outcomes, such as the termination of investigative cases, the GAO stated.

Here are just a few recent cases to be prosecuted:

  • Carbon-Fiber Material with Rocket & Spacecraft Applications to China - On Oct. 28, 2008, a grand jury in the District of Minnesota returned an indictment charging Jian Wei Deng, Kok Tong Lim, and Ping Cheng with conspiring to illegally export to the People's Republic of China (PRC) controlled carbon-fiber material with applications in aircraft, rockets, spacecraft, and uranium enrichment process. According to the indictment, the intended destination for some of the materials was the China Academy of Space Technology, which oversees research institutes working on spacecraft systems for the PRC government.
  • Violation of Trade Embargo with Iran - On Oct. 15, 2008, Seyed Mahmood Mousavi, a former interrogator for the Islamic Revolutionary Court in Iran, was sentenced in the Central District of California to 33 months in prison and a $12,500 fine for violating the trade embargo with Iran, false statements to the FBI, and filing a false tax return. Mousavi entered into consulting contracts to support a company in Iran in their efforts to bid for a mobile communication license and to establish a bank and leasing company in Iran.
  • Telecommunications Equipment to Iraq - On Oct. 2, 2008, Dawn Hanna was convicted by a jury in the Eastern District of Michigan on eight counts of an indictment charging her with illegally exporting telecommunications and other equipment with potential military applications to Iraq during the administration of Saddam Hussein and during the embargo on that country.

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