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Export Controls

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Export Controls

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    2. 2 Export Controls EVERY Export impacts both National Security and Economic vitality of the United States Every Export = BALANCE of those concerns Administrative Agencies set policy based on that balance. ! BECAUSE MILITARY ADVANTAGE IS NOT THE SOLE OBJECTIVE, DOD is not the policy maker on exports ! POLICY Divided among three separate ADMINISTRATIVE AGENCIES ! DEFENSE IS CONSULTED, BUT IS NOT IN CONTROL NARRATIVE If the OBJECTIVE were solely military advantage, controls on exports would be initiated and administered by the Defense Department. But because the objective is more complex and balanced, THREE EXECUTIVE AGENCIES DETERMINE EXPORT CONTROL POLICY In decision making related to releases of military items and high technology goods, the Defense Department is consulted during the licensing process, but does NOT have final authority over what goes out of the country, and what doesn’t. The administrative agencies are free to heed the advice of the military, and they are also free to disregard it. ! BECAUSE MILITARY ADVANTAGE IS NOT THE SOLE OBJECTIVE, DOD is not the policy maker on exports ! POLICY Divided among three separate ADMINISTRATIVE AGENCIES ! DEFENSE IS CONSULTED, BUT IS NOT IN CONTROL NARRATIVE If the OBJECTIVE were solely military advantage, controls on exports would be initiated and administered by the Defense Department. But because the objective is more complex and balanced, THREE EXECUTIVE AGENCIES DETERMINE EXPORT CONTROL POLICY In decision making related to releases of military items and high technology goods, the Defense Department is consulted during the licensing process, but does NOT have final authority over what goes out of the country, and what doesn’t. The administrative agencies are free to heed the advice of the military, and they are also free to disregard it.

    3. PRIMARY REGULATORY METHOD: The Primary regulatory mechanism used by the U.S. Government to Control exports is the Export License The result is a LICENSING STRUCTURE, based like many things on the ADVICE and CONSENT of the government LICENSE. Technically, all exports from this country occur because of and subsequent to the CONSENT of the government, otherwise known as LICENSE. REGULATORY RESPONSIBILITY: In the few markets chosen, due to national security, to be minimally restricted, we use the regulation of the export industry. Again, we use a system of “advice and consent”, and the regulatory “tool”, mechanism, used to achieve that balance is the VALIDATED EXPORT LICENSE. THE VALIDATED EXPORT LICENSE is issued by an Administrative agency charged with the responsibility of regulating a type of export market – namely the markets for Munitions, Dual-Use items; or trade with embargoed and sanctioned countries – organizations that are at odds with this country in international relations. INVESTIGATIVE JURISDICTION: That regulatory responsibility has it’s failures, among them are those individuals who avoid regulatory restrictions, and intentionally avoid LICENSING. Those who intentionally do so are subject to criminal penalties. ICE agents are put into action.The result is a LICENSING STRUCTURE, based like many things on the ADVICE and CONSENT of the government LICENSE. Technically, all exports from this country occur because of and subsequent to the CONSENT of the government, otherwise known as LICENSE. REGULATORY RESPONSIBILITY: In the few markets chosen, due to national security, to be minimally restricted, we use the regulation of the export industry. Again, we use a system of “advice and consent”, and the regulatory “tool”, mechanism, used to achieve that balance is the VALIDATED EXPORT LICENSE. THE VALIDATED EXPORT LICENSE is issued by an Administrative agency charged with the responsibility of regulating a type of export market – namely the markets for Munitions, Dual-Use items; or trade with embargoed and sanctioned countries – organizations that are at odds with this country in international relations. INVESTIGATIVE JURISDICTION: That regulatory responsibility has it’s failures, among them are those individuals who avoid regulatory restrictions, and intentionally avoid LICENSING. Those who intentionally do so are subject to criminal penalties. ICE agents are put into action.

    4. 4 Export Controls ALL Exports are “CONTROLLED” VALIDATED License – Export requiring written approval of the relevant Administrative Agency Specific Commodities or Destinations are LISTED in regulations Export requires written application to Admin Agency Exporter must receive WRITTEN approval for release GENERAL License – unwritten approval of the government Export is not controlled under any regulations and is not bound for a prohibited or restricted destination Transaction does not require application or written approval for release Several Terms for General License: EAR99, G-DEST, NLR T! - 20 ALL EXPORTS ARE “CONTROLLED”: -Validated = Expressed written consent of Government for export -General = implied permission to export a non-sensitive commodity The term “LICENSABLE” is often used to describe a CONTROLLED commodity, requiring a VALIDATED license for export. ALL Exports are subject to the scrutiny of the US Government, and ALL exports are released under the “license” of the government T! - 20 ALL EXPORTS ARE “CONTROLLED”: -Validated = Expressed written consent of Government for export -General = implied permission to export a non-sensitive commodity The term “LICENSABLE” is often used to describe a CONTROLLED commodity, requiring a VALIDATED license for export. ALL Exports are subject to the scrutiny of the US Government, and ALL exports are released under the “license” of the government

    5. 5 Factors Determining “Licensability” Factors favoring restriction on export of a Commodity: National Security Protection Strategic or Technological Advantage Protection Technology is US Classified Poor Diplomatic Relationship with end-use destination Prior Export Violations by exporter Factors against export restriction: No Security Threat Technology readily available Exports expand markets for US Products Improve Trade Deficit; More exports = More manufacturing = More Workers Good relationship with End-Use country No Prior Export violations ! Licensability = Export is RESTRICTED = Export requires a VALIDATED LICENSE If product release doesn’t impact national security or strategic advantage, it doesn’t require written licensing ! US Companies Make a product to Sell a Product ! International (unrestricted) market = Large Customer Base US Only market = Limited customer base Companies regularly Lobby Congress to ease export restrictions & streamline licensing processes ! Licensability = Export is RESTRICTED = Export requires a VALIDATED LICENSE If product release doesn’t impact national security or strategic advantage, it doesn’t require written licensing ! US Companies Make a product to Sell a Product ! International (unrestricted) market = Large Customer Base US Only market = Limited customer base Companies regularly Lobby Congress to ease export restrictions & streamline licensing processes

    6. 6 Export Controls CONTROLS ARE “Advise and Consent” REGULATIONS PUBLISHED by Administrative Agency – Rules Regulations instruct INDUSTRY what products REQUIRE WRITTEN APPROVAL for export Exporter APPLIES for written approval to export, I.e. applies for a LICENSE ADMINISTRATIVE AGENCY either approves LICENSE or denies it. PENALTIES incurred for NON-COMPLIANCE “ADVISE & CONSENT” Industry informed of export requirements by Government publishing of rules Industry responsible for knowing what products require VALIDATED LICENSES EXPORTER applies for VALIDATED LICENSE if required “ADVISE”: Written Application to Admin Agency Admin Agency reviews application based on factors on previous slide “CONSENT”: Written reply by Admin Agency – denial or approved license Exporter is penalized, criminally or civilly, for not complying with this construct. “ADVISE & CONSENT” Industry informed of export requirements by Government publishing of rules Industry responsible for knowing what products require VALIDATED LICENSES EXPORTER applies for VALIDATED LICENSE if required “ADVISE”: Written Application to Admin Agency Admin Agency reviews application based on factors on previous slide “CONSENT”: Written reply by Admin Agency – denial or approved license Exporter is penalized, criminally or civilly, for not complying with this construct.

    7. 7 Agency Roles in Export Controls: Department of State –Munitions Items Licensing, Administrative Penalties Department of Commerce –Dual use Items Licensing, Administrative Penalties Investigation/Enforcement of Commerce Controlled Items Department of Homeland Security Immigration and Customs Enforcement – Investigation/Enforcement of Both Munitions and Dual Use Controlled Items Customs and Border Protection – Inspection and Administrative Fines for Export/Import Federal Bureau of Investigations – Economic and State Sponsored Espionage Department of Treasury (Office of Foreign Assets Controls) Sanctions and Embargoes

    8. 8 Changes in Global Factors = Changes in Controls Licensing Agencies Decontrolling Numerous Commodities Technology Advancement Changes in Foreign Policy and Diplomatic Relationships Increased Use of Foreign Policy Sanctions and Embargoes Foreign Military Sales *Changes in Export Controls and Laws based on Global Factors *Diplomatic Relationships Change *Technology Changes *Markets Change Narrative: Whether an export affects NATSEC or Strategic advantage is based on the state of global markets and our relationships with end-use countries. If a certain technology is widely available, there’s no advantage to protect, and the export will not require the written approvals from the government. As relationships with foreign countries change, so do the likelihood of exports to those countries change. Examples: Germany, Iran, Iraq, Libya…. Iran and Iraq were both former Allies. Osama Bin Laden was a former ally. Saudi Arabia could be an enemy in the near future. Islamic fundamentalism is growing and with it, the growth of State sponsored terrorism. The attack on the World Trade Center is a clear example that terrorism is on the move and is being imported into the United States We also see a marked growth of home-grown terrorism such as the attack on the Murrah Federal building in Oklahoma City. We also see for the first time, cooperation between terrorist elements which formerly were compartmentalized. We now see groups cooperating with each other by training, sharing supplies and even finances. 1. In 1994, the Administration undertook a major review of export laws and controls. Both the Commerce and State Departments, the two principal licensing agencies, have changed or decontrolled many materials. 2. The President continues to exercise his use of sanctions and embargoes as a critical tool of U.S. foreign policy. By the imposition of sanctions and embargoes, the U.S. can punish a country, as an example, for human rights violations. 3. Sale of military surplus and weaponry under a State Department and Dept. of Defense program is expanding. *Changes in Export Controls and Laws based on Global Factors *Diplomatic Relationships Change *Technology Changes *Markets Change Narrative: Whether an export affects NATSEC or Strategic advantage is based on the state of global markets and our relationships with end-use countries. If a certain technology is widely available, there’s no advantage to protect, and the export will not require the written approvals from the government. As relationships with foreign countries change, so do the likelihood of exports to those countries change. Examples: Germany, Iran, Iraq, Libya…. Iran and Iraq were both former Allies. Osama Bin Laden was a former ally. Saudi Arabia could be an enemy in the near future. Islamic fundamentalism is growing and with it, the growth of State sponsored terrorism. The attack on the World Trade Center is a clear example that terrorism is on the move and is being imported into the United States We also see a marked growth of home-grown terrorism such as the attack on the Murrah Federal building in Oklahoma City. We also see for the first time, cooperation between terrorist elements which formerly were compartmentalized. We now see groups cooperating with each other by training, sharing supplies and even finances. 1. In 1994, the Administration undertook a major review of export laws and controls. Both the Commerce and State Departments, the two principal licensing agencies, have changed or decontrolled many materials. 2. The President continues to exercise his use of sanctions and embargoes as a critical tool of U.S. foreign policy. By the imposition of sanctions and embargoes, the U.S. can punish a country, as an example, for human rights violations. 3. Sale of military surplus and weaponry under a State Department and Dept. of Defense program is expanding.

    9. 9 Intangible Technology Transfers: Examples: Foreign students with access to classified and/or high tech research Foreign worker employed in uranium centrifuge enrichment plant Former government scientist working as consultant to foreign entity Emailed information of chemical synthesis of CW or precursors Telephone advice on MANPADS Postgraduate research in rocketry Downloadable encryption software

    10. 10 Intangible Transfers & Technology 1. Intangible transfers of technology Electronic transfers of documentary technology or technical data Blueprints Diagrams Manuals, instructions Electronic Means of transfer Fax e-mail etc (attached PDF file etc.) Downloaded from internet

    11. 11 Intangible Transfers & Technology 2. Transfers of Intangible technology Export of technical assistance Skills training Consulting services Technical advice Tuition or supervised research Technical assistance may also be provided by intangible means e-mail, telephone, meeting, site visit Downloaded from internet

    12. 12 Exports and Deemed Exports Export controls on items or technical data in tangible form traditionally define transfer in geographical terms – a border control issue. With ITT, borders can be irrelevant – the key element is usually transfer to foreign nationals. In many cases (e.g. foreign visitors, workers, students) the transfer takes place entirely within national borders ITT can also take place in the recipient country (e.g. expatriate consultants) or in a third country – extra territorially.

    13. 13 PROJECT SHIELD AMERICA Strategic Investigations Presentation to Industry on Operation Shield America Special Agent Galin Hernandez US Customs Service Office of Investigations 2203 N. Lois Ave, Suite #600 Tampa, FL, 33607 (813) 348-1881 813)348-1871(f) Special Agent Brooke Harris Defense Criminal Investigative Service 400N Tampa St. Suite 1130 Tampa, FL, 33602 (813) 275-0592 x223 (813) 314-0293Strategic Investigations Presentation to Industry on Operation Shield America Special Agent Galin Hernandez US Customs Service Office of Investigations 2203 N. Lois Ave, Suite #600 Tampa, FL, 33607 (813) 348-1881 813)348-1871(f) Special Agent Brooke Harris Defense Criminal Investigative Service 400N Tampa St. Suite 1130 Tampa, FL, 33602 (813) 275-0592 x223 (813) 314-0293

    14. 14 ENFORCEMENT LAW FOR A CHANGING WORLD 9-11 TERRORIST ATTACKS GROWTH OF STATE SPONSORED TERRORISM WEAPONS PROLIFERATION NUCLEAR MATERIAL SMUGGLING – LOOSE NUKES PHENOMENA Several events in the past five years have had a profound effect on the United States foreign policy and as a result, on our export control programs. 1. The fall of the Soviet Union and the end of the cold war has reduced the number of overall controls. 2. During 1995, State sponsored Terrorism was at a ten year high despite a trend over the past four years of fewer terrorist incidents. 3. More countries are seeking the materials for weapons of mass destruction, rogue states in the middle east as well as North Korea and China. 4. The phenomena of the smuggling of nuclear materials is appearing on the European continent but no incidents in the U.S.Several events in the past five years have had a profound effect on the United States foreign policy and as a result, on our export control programs. 1. The fall of the Soviet Union and the end of the cold war has reduced the number of overall controls. 2. During 1995, State sponsored Terrorism was at a ten year high despite a trend over the past four years of fewer terrorist incidents. 3. More countries are seeking the materials for weapons of mass destruction, rogue states in the middle east as well as North Korea and China. 4. The phenomena of the smuggling of nuclear materials is appearing on the European continent but no incidents in the U.S.

    15. 15 Current Threats Case Poor Former Soviet Union (FSU) Countries Sale of Nuclear and Conventional Stockpiles Missile/Nuclear Proliferation State Sponsored Terrorism Religious Extremism Domestic Terrorist Groups Industrial Espionage U.S. Research Exploitation The new threat 1. With the dissolution of the Former Soviet Union, many of the new republics have depressed economies. Without real industries, theses cash poor countries are turning to the sale of their only remaining economic resource, that being the stockpile of nuclear weapons and materials that the Soviets left behind. 2. Islamic fundamentalism is growing and with it, the growth of State sponsored terrorism. The attack on the World Trade Center is a clear example that terrorism is on the move and is being imported into the United States. U.S. facilities abroad have also been subjected to attacks, most recently the attack on the U.S. military barracks in Saudi Arabia. 3. We also see a marked growth of home-grown terrorism such as the attack on the Murrah Federal building in Oklahoma City. 4. We also see for the first time, cooperation between terrorist elements which formerly were compartmentalized. We now see groups cooperating with each other by training, sharing supplies and even finances. 5. Finally, we see aggressively expanding industrial espionage programs by countries that are considered our allies (such as Japan, France and Israel) as well as espionage from more antagonist countries such as China. The new threat 1. With the dissolution of the Former Soviet Union, many of the new republics have depressed economies. Without real industries, theses cash poor countries are turning to the sale of their only remaining economic resource, that being the stockpile of nuclear weapons and materials that the Soviets left behind. 2. Islamic fundamentalism is growing and with it, the growth of State sponsored terrorism. The attack on the World Trade Center is a clear example that terrorism is on the move and is being imported into the United States. U.S. facilities abroad have also been subjected to attacks, most recently the attack on the U.S. military barracks in Saudi Arabia. 3. We also see a marked growth of home-grown terrorism such as the attack on the Murrah Federal building in Oklahoma City. 4. We also see for the first time, cooperation between terrorist elements which formerly were compartmentalized. We now see groups cooperating with each other by training, sharing supplies and even finances. 5. Finally, we see aggressively expanding industrial espionage programs by countries that are considered our allies (such as Japan, France and Israel) as well as espionage from more antagonist countries such as China.

    16. 16 EXPORT CONTROL LAWS ARMS EXPORT CONTROL ACT (AECA) EXPORT ADMINISTRATION ACT (EAA) INTERNATIONAL EMERGENCY ECONOMIC POWERS ACT (IEEPA) TRADING WITH THE ENEMY ACT (TWEA) - Currently only Cuba The U.S. has four primary laws which govern the controls of exports: A. The Arms Export Control Act governs the export of munitions and defense articles and vests the licensing authority for munitions exports with the State Department. The Customs Service acts as the sole law enforcement agency for munitions export investigations and enforcement activity. B. The Export Administration Act governs the export of technologies, mainly dual use items, which are licensed by the Commerce Department’s Bureau of Export Administration. The Customs Service and the Commerce Department’s Bureau of Export Enforcement share the law enforcement responsibilities for the EAA. C. The International Emergency Economic Powers Act is the law which enables the President to impose sanctions and embargoes under Executive Order, permits the implementation of our national security and foreign policy initiatives. This is the law which enables the President to bar certain items from export (or import) from a given country, to block financial accounts or bar activity altogether. The licensing authority for the IEEPA law is the Treasury Department’s Office of Foreign Assets Control and the Customs Service serves as the principal law enforcement agency for IEEPA violations. 4. The Trading with the Enemy Act is the oldest export control law on the books. This law imposes strict sanctions against Cuba and North Korea which are enforced by the Customs Service. The U.S. has four primary laws which govern the controls of exports: A. The Arms Export Control Act governs the export of munitions and defense articles and vests the licensing authority for munitions exports with the State Department. The Customs Service acts as the sole law enforcement agency for munitions export investigations and enforcement activity. B. The Export Administration Act governs the export of technologies, mainly dual use items, which are licensed by the Commerce Department’s Bureau of Export Administration. The Customs Service and the Commerce Department’s Bureau of Export Enforcement share the law enforcement responsibilities for the EAA. C. The International Emergency Economic Powers Act is the law which enables the President to impose sanctions and embargoes under Executive Order, permits the implementation of our national security and foreign policy initiatives. This is the law which enables the President to bar certain items from export (or import) from a given country, to block financial accounts or bar activity altogether. The licensing authority for the IEEPA law is the Treasury Department’s Office of Foreign Assets Control and the Customs Service serves as the principal law enforcement agency for IEEPA violations. 4. The Trading with the Enemy Act is the oldest export control law on the books. This law imposes strict sanctions against Cuba and North Korea which are enforced by the Customs Service.

    17. 17 Arms Export Control Act Direct commercial sales of U.S. origin defense products, components, technologies, and services are controlled by the ITAR which are administered by the State Department to implement the Arms Export Control Act. Those items requiring export licenses from the State Department’s Department of Defense Trade Controls (DDTC) appear in the U.S. Munitions List in the ITAR. The Defense Department’s Defense Technology Security Administration (DTSA) also reviews many of the applications. Any item on the Munitions List requires a license for export to all countries (with a few exceptions for Canada.) Manufacturers, Exporters must register with Department of State Exporter must obtain prior approval for Transaction - Export License Exporter must file license with Customs Customs compares shipments to license prior to export End-use reports are required for ITAR items. DDTC operates Blue Lantern program to verify end-users. UNFAVORABLE BLUE LANTERN CHECKS WILL RESULT IN ICE INVESTIGATION OF EXPORTERDirect commercial sales of U.S. origin defense products, components, technologies, and services are controlled by the ITAR which are administered by the State Department to implement the Arms Export Control Act. Those items requiring export licenses from the State Department’s Department of Defense Trade Controls (DDTC) appear in the U.S. Munitions List in the ITAR. The Defense Department’s Defense Technology Security Administration (DTSA) also reviews many of the applications. Any item on the Munitions List requires a license for export to all countries (with a few exceptions for Canada.) Manufacturers, Exporters must register with Department of State Exporter must obtain prior approval for Transaction - Export License Exporter must file license with Customs Customs compares shipments to license prior to export End-use reports are required for ITAR items. DDTC operates Blue Lantern program to verify end-users. UNFAVORABLE BLUE LANTERN CHECKS WILL RESULT IN ICE INVESTIGATION OF EXPORTER

    18. 18 Export Administration Regulations The Commerce Department administers the Export Administration Regulations (EAR) which implement the EAA, even though the EAA expired in August 1994. Presidents Clinton and Bush has kept the EAA export controls in force since then by executive order under the International Emergency Economic Powers Act. Regulated by the Commerce Department’s Bureau of Export Administration are exports of dual-use advanced technology and materials having both military and civilian applications. By executive order in 1990, President Bush vastly increased the scope of export controls aimed at halting proliferation of nuclear, chemical, and biological weapons and missiles. Bush’s Enhanced Proliferation Control Initiative (EPCI) is a catch-all provision requiring exporters to apply for a Commerce Department license on shipment of any goods he or she knows would be used for proliferation of weapons of mass destruction, whether or not the items are controlled otherwise. The Commerce Department regulations also control exports of commodities in short supply like the export of crude oil carried on the Trans-Alaska Pipeline is controlled as is that of crude oil and western red cedar harvested from federal or state lands.The Commerce Department administers the Export Administration Regulations (EAR) which implement the EAA, even though the EAA expired in August 1994. Presidents Clinton and Bush has kept the EAA export controls in force since then by executive order under the International Emergency Economic Powers Act. Regulated by the Commerce Department’s Bureau of Export Administration are exports of dual-use advanced technology and materials having both military and civilian applications. By executive order in 1990, President Bush vastly increased the scope of export controls aimed at halting proliferation of nuclear, chemical, and biological weapons and missiles. Bush’s Enhanced Proliferation Control Initiative (EPCI) is a catch-all provision requiring exporters to apply for a Commerce Department license on shipment of any goods he or she knows would be used for proliferation of weapons of mass destruction, whether or not the items are controlled otherwise. The Commerce Department regulations also control exports of commodities in short supply like the export of crude oil carried on the Trans-Alaska Pipeline is controlled as is that of crude oil and western red cedar harvested from federal or state lands.

    19. 19 International Emergency Economic Powers Act When the President declares a national emergency with respect to a threat to the national security, foreign policy, or economy of the US, Customs enforces any import or export previsions and economic sanctions imposed. When the President declares a national emergency with respect to a threat to the national security, foreign policy, or economy of the US, Customs enforces any import or export previsions and economic sanctions imposed.

    20. 20 Trading With The Enemy Act

    21. 21 Intangible Technology Transfers Licensable technology to a particular foreign country also applies to a citizen of that country who is in the United States. It is incumbent upon the company to get a license to expose foreign nationals to licensable technology. Licensable technology to a particular foreign country also applies to a citizen of that country who is in the United States. It is incumbent upon the company to get a license to expose foreign nationals to licensable technology.

    22. 22 This is a complementary effort between all US government agencies and US industry. This is a complementary effort between all US government agencies and US industry.

    23. 23 Approach to Export Enforcement ICE uses a four-pronged approach to its export control program 1. Interdiction 2. Investigations 3. Intelligence 4. Industry Outreach- Shield America ICE uses a four-pronged approach to its export control program 1. Interdiction 2. Investigations 3. Intelligence 4. Industry Outreach- Shield America

    24. 24 Arms & Strategic Technology Investigations ICE special agents play a significant role in the Customs export enforcement strategy. There are approximately 5500 special agents in ICE. They are responsible for conducting criminal investigations of some 400 Customs laws and regulations. Included in their responsibilities is the investigation of all types of smuggling from drugs to endangered species. They protect our nation’s commerce by ensuring the materials imported into the U.S. are not entered fraudulently, Customs is also charged with the investigation of money laundering as well as export enforcement.ICE special agents play a significant role in the Customs export enforcement strategy. There are approximately 5500 special agents in ICE. They are responsible for conducting criminal investigations of some 400 Customs laws and regulations. Included in their responsibilities is the investigation of all types of smuggling from drugs to endangered species. They protect our nation’s commerce by ensuring the materials imported into the U.S. are not entered fraudulently, Customs is also charged with the investigation of money laundering as well as export enforcement.

    25. 25 ICE INVESTIGATIONS Develop Industry Cooperation and Trust Overt Investigations Detentions and License Determinations Undercover Stings Long Term Undercover Operations The techniques used by Customs special agents in export investigations are varied. 1. One of the most important tools we have at our disposal is our industry outreach program. I will speak more about that in a minute. 2. Agents conduct overt investigations where we utilize extensive authorities granted under the export laws I have previously discussed. The export laws permit the issuance of export summons for information and documents which allow agents to compel companies to provide information relating to violations of export laws. We also utilize a vast methodology in order to prove violations of the export laws. 3. As you know, the export laws also permit the detention of exports in order for Customs to ascertain if licenses are required for given commodities. Although, not always a popular technique, Customs agents can delay the shipment until the necessary information can be gathered to ensure compliance with our export laws. 4. And finally, we often employ undercover operations as tests of exporters and companies to ensure export law compliance. Agents will pose as arms dealers or brokers for foreign governments and attempt to acquire shipments unlawfully. Needless to say, these types of investigations are carefully scrutinized by our management to ensure that innocent parties are not entrapped. The techniques used by Customs special agents in export investigations are varied. 1. One of the most important tools we have at our disposal is our industry outreach program. I will speak more about that in a minute. 2. Agents conduct overt investigations where we utilize extensive authorities granted under the export laws I have previously discussed. The export laws permit the issuance of export summons for information and documents which allow agents to compel companies to provide information relating to violations of export laws. We also utilize a vast methodology in order to prove violations of the export laws. 3. As you know, the export laws also permit the detention of exports in order for Customs to ascertain if licenses are required for given commodities. Although, not always a popular technique, Customs agents can delay the shipment until the necessary information can be gathered to ensure compliance with our export laws. 4. And finally, we often employ undercover operations as tests of exporters and companies to ensure export law compliance. Agents will pose as arms dealers or brokers for foreign governments and attempt to acquire shipments unlawfully. Needless to say, these types of investigations are carefully scrutinized by our management to ensure that innocent parties are not entrapped.

    26. 26 PROJECT SHIELD AMERICA Enhance Public Awareness of the Export Laws Provide Opportunity for Private Sector Input Generate Cooperation One of our most important tools is our industry outreach program, which we call Operation Shield America. When we initially conceived the program in 1981, it was a two part program. The first part was to ensure exporters knew the rules regarding exporting and the second part was to establish a network of contacts with the exporting community to assist our agents with their investigations. 1. The program, (which would include today’s presentation) is still aimed at enhancing the exporting public’s awareness of the Customs role in export control. 2. In addition, we hope that these types of presentations will provide an opportunity for industry representatives to enlighten us on areas of mutual interest and concern. 3. We hope that these types of events will foster better cooperation with our industry. 4. And finally, our contacts are recorded in a database in Washington for historical contacts. One of our most important tools is our industry outreach program, which we call Operation Shield America. When we initially conceived the program in 1981, it was a two part program. The first part was to ensure exporters knew the rules regarding exporting and the second part was to establish a network of contacts with the exporting community to assist our agents with their investigations. 1. The program, (which would include today’s presentation) is still aimed at enhancing the exporting public’s awareness of the Customs role in export control. 2. In addition, we hope that these types of presentations will provide an opportunity for industry representatives to enlighten us on areas of mutual interest and concern. 3. We hope that these types of events will foster better cooperation with our industry. 4. And finally, our contacts are recorded in a database in Washington for historical contacts.

    27. 27 PROJECT SHIELD AMERICA

    28. 28 PROJECT SHIELD AMERICA One of our most important tools is our industry outreach program, which we call Operation Shield America. When we initially conceived the program in 1981, it was a two part program. The first part was to ensure exporters knew the rules regarding exporting and the second part was to establish a network of contacts with the exporting community to assist our agents with their investigations. 1. The program, (which would include today’s presentation) is still aimed at enhancing the exporting public’s awareness of the Customs role in export control. 2. In addition, we hope that these types of presentations will provide an opportunity for industry representatives to enlighten us on areas of mutual interest and concern. 3. We hope that these types of events will foster better cooperation with our industry. 4. And finally, our contacts are recorded in a database in Washington for historical contacts. One of our most important tools is our industry outreach program, which we call Operation Shield America. When we initially conceived the program in 1981, it was a two part program. The first part was to ensure exporters knew the rules regarding exporting and the second part was to establish a network of contacts with the exporting community to assist our agents with their investigations. 1. The program, (which would include today’s presentation) is still aimed at enhancing the exporting public’s awareness of the Customs role in export control. 2. In addition, we hope that these types of presentations will provide an opportunity for industry representatives to enlighten us on areas of mutual interest and concern. 3. We hope that these types of events will foster better cooperation with our industry. 4. And finally, our contacts are recorded in a database in Washington for historical contacts.

    29. 29 INDUSTRY’S ROLE IN COMPLIANCE Know your customers Know your employees It’s your business Be Alert and Recognize Potential Illegal Exports and Diversions We strongly believe that the “know your customer” rule is the best method that an exporter can utilize to ensure that the end user of a licensable commodity does not fall into the wrong hands. Knowing your customer, is ensuring that who you are dealing with is reputtable. This can prevent one of the biggest obstacles we have in weapons proliferation, that of diversion of legitimate shipments to proliferators. 1. Knowing Your Customer and 2. Recognizing that you as an exporter, are in the best position to know if the customer may divert the shipment. However, if you have doubts, the best thing you can do, is contact your local Customs Office of Investigations. We will help you check out a customer that you may suspect of diverting a shipment.We strongly believe that the “know your customer” rule is the best method that an exporter can utilize to ensure that the end user of a licensable commodity does not fall into the wrong hands. Knowing your customer, is ensuring that who you are dealing with is reputtable. This can prevent one of the biggest obstacles we have in weapons proliferation, that of diversion of legitimate shipments to proliferators. 1. Knowing Your Customer and 2. Recognizing that you as an exporter, are in the best position to know if the customer may divert the shipment. However, if you have doubts, the best thing you can do, is contact your local Customs Office of Investigations. We will help you check out a customer that you may suspect of diverting a shipment.

    30. 30 IDENTIFYING THE THREAT KNOWN PROLIFERATION COUNTRIES China Iran North Korea Syria Pakistan Libya Needless to say, these countries we know have a history of procuring components to nuclear weapons, chemical and biological warfare materials, and missile delivery systemsNeedless to say, these countries we know have a history of procuring components to nuclear weapons, chemical and biological warfare materials, and missile delivery systems

    31. 31 TRANSSHIPMENT COUNTRIES U.A.E SINGAPORE HONG KONG CYPRUS JORDAN MALTA THAILAND YEMEN SUDAN CANADA TAIWAN However, these countries have a history of diversion of materials to proliferant countries. This may be due to lax export control and enforcement, government condoned policy, or more likely a government’s desire not to hurt their countries commerce and industry.However, these countries have a history of diversion of materials to proliferant countries. This may be due to lax export control and enforcement, government condoned policy, or more likely a government’s desire not to hurt their countries commerce and industry.

    32. 32 HOW TO RESPOND TO A SUSPICIOUS CONTACT

    33. 33 CONTACTS: Group Supervisor Christopher Buzzeo (404) 730-2840 x5357 (christopher.buzzeo@dhs.gov ) Special Agent Wayne Jones (404) 730-2840 x 5355 (wayne.jones@dhs.gov )

    34. 34 QUESTIONS AND DISCUSSION Now I would welcome any questions you may have. Thank youNow I would welcome any questions you may have. Thank you

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