Arms & Strategic Technology Investigations Unit

Arms & Strategic Technology

Investigations UnitWilliam J. ArgueSpecial Agent

[email protected]

ProjectProjectShield AmericaShield America

New Business New Business Practices for a Safer Practices for a Safer

AmericaAmerica

Project Shield America GoalsProject Shield America Goals

•Gain cooperation from manufactures, sellers, and exporters

•Enhance Public Awareness of export laws

•Provide opportunity for private sector input

•Establish a more formal liaison and continuing relationship

•Provide a contact point for future questions and concerns

The ThreatsThe Threats

• Al Qaeda and Religious ExtremismAl Qaeda and Religious Extremism

• Chemical and Biological AgentsChemical and Biological Agents

• Weapons of Mass DestructionWeapons of Mass Destruction

• State Sponsored TerrorismState Sponsored Terrorism

• Proliferation of ViolenceProliferation of Violence

• Illegal exports of strategic Illegal exports of strategic technologytechnology

• Illegal financial transactionsIllegal financial transactions

Global SecurityGlobal Security

• Pushing the Borders Out From Their Traditional Places

• Extending Customs Role Globally

Export Control Laws and Export Control Laws and Their Use to Thwart Their Use to Thwart

TerrorismTerrorism

• Arms Export Control ActArms Export Control Act

• Export Administration Export Administration ActAct

• Trading with the Enemy Trading with the Enemy ActAct

• International Emergency International Emergency Economic Powers ActEconomic Powers Act

•22 USC 2778 22 USC 2778

•Product is manufactured or specifically designed for Product is manufactured or specifically designed for

military use or has a significant military use.military use or has a significant military use.

•ExamplesExamples

•Missile TechnologyMissile Technology

•Military Aircraft Parts (F-14)Military Aircraft Parts (F-14)

•TanksTanks

•Regulated by the Department of State, Regulated by the Department of State,

•Directorate of Defense Trade ControlsDirectorate of Defense Trade Controls

•International Trafficking in Arms Regulations (ITAR)International Trafficking in Arms Regulations (ITAR)

•Commodity List - United States Munitions ListCommodity List - United States Munitions List

Arms Export Control Act Arms Export Control Act (AECA(AECA)

The ITAR Controls:•Defense Articles

• Actual Munitions Items

•Defense Services• Technical Assistance, Debugging,

Repairs, Installations

•Technical Data • Technical specifications for a

product, blue prints, or other planning designs or data

•Controls both the Commodity and the End User or End Use•Dual-Use – Items that have both a civilian and military application•Examples

•Pharmaceutical, Bio-Technology (Freeze Dryers)•Night Vision Technology•Chemicals (Flame Retardant Chemicals)•Microwave Amplifiers (Communications vs. Military Radar)•Jet Mill Grinders (Pharmaceutical or Rocket Propulsion)

•Regulated by the Department of Commerce•Bureau of Industry and Security

•Export Administration Regulations (EAR)•Commodity Control List (CCL)

Export Administration Act (EAA)

International Emergency International Emergency Economic Powers Act (IEEPA)Economic Powers Act (IEEPA)

Trading with the Enemy Act Trading with the Enemy Act (TWEA)(TWEA)•Destination Based ControlsDestination Based Controls

•Transactions involving a prohibited Transactions involving a prohibited location such as Iran, Cuba, Syrialocation such as Iran, Cuba, Syria• Transactions include imports, Transactions include imports, exports, financial activity and exports, financial activity and travel•Regulated by the Department of Regulated by the Department of Treasury, Office of Foreign Assets Treasury, Office of Foreign Assets Control (OFAC)Control (OFAC)

• treas.gov/ofac•Foreign Assets Control RegulationsForeign Assets Control Regulations

Deemed Exports and Deemed Exports and Other International Other International

CommunicationsCommunicationsAny transfer of, or communication regarding data, Any transfer of, or communication regarding data, products, or services that would be licensable for products, or services that would be licensable for

export, also requires a license in order to be export, also requires a license in order to be transferred to a foreign national within the United transferred to a foreign national within the United

States.States.

This includes but is not limited to:This includes but is not limited to:

•Article or Product TransferArticle or Product Transfer

•Exposure to Research Facilities or DataExposure to Research Facilities or Data

•Email CommunicationsEmail Communications

•Phone ConversationsPhone Conversations

•International Visits International Visits

Onus for Export Onus for Export ControlControl

•Export Control Statutes are complex, and it is recommended that Exporters establish Export Management Programs

•You cannot make the Consignee responsible!

•Willful Blindness - It’s not my problem

I.C.E.’s Approach to Export I.C.E.’s Approach to Export EnforcementEnforcement

•INTERDICTIONINTERDICTION

•INVESTIGATIONINVESTIGATION

•INTELLIGENCEINTELLIGENCE

•INDUSTRY OUTREACHINDUSTRY OUTREACH

•PROJECT SHIELD AMERICAPROJECT SHIELD AMERICA

INVESTIGATIONSINVESTIGATIONS

•Industry Industry CooperationCooperation

•Overt Overt InvestigationsInvestigations

•Detentions and Detentions and License License DeterminationsDeterminations

•Undercover StingsUndercover Stings

Interdiction efforts - Port of BostonInterdiction efforts - Port of Boston

•Outbound Taskforce Program comprised of ICE, CBP, DCIS, DSS, OSI, NCIS, FBI, and U.S. Commerce Department members to target and examine outbound

cargo, parcels and individuals

•Mission - To effectively deter, investigate, intercept, and prosecute violators involved in the illegal movement of U.S. munitions/controlled listed items and strategic technology having sensitive civil and military applications to proscribed destinations around the world, and to terrorist organizations which pose a threat to the national security of the US and its allies.

An Average Day in CBP and An Average Day in CBP and ICEICE

Examines:

•Over 1.1 Million Passengers

•2,459 Aircraft

•570,006 Trucks / Containers

•323,622 Vehicles

•580 Vessels

•67,638 Entries

Effects:Effects:

•64 Arrests64 Arrests

• 118 Narcotics Seizures118 Narcotics Seizures

•4,639 pounds of 4,639 pounds of narcoticsnarcotics

•116 Other Seizures116 Other Seizures

•$315,973 in $315,973 in conveyancesconveyances

•$467,118 in $467,118 in merchandisemerchandise

•$23,083 in arms and $23,083 in arms and ammoammo

•11 Currency Seizures11 Currency Seizures

•$715,652 in $715,652 in CurrencyCurrency

FY 2002

Known Proliferation Known Proliferation CountriesCountries

• IraqIraq

• Iran Iran

•LibyaLibya

•North KoreaNorth Korea

•China

•Syria

•Pakistan

Known Transshipment CountriesKnown Transshipment Countries

•U.A.E.U.A.E.

•Singapore Singapore

•Hong KongHong Kong

•CyprusCyprus

• JordanJordan

•Canada

•Sudan

•Yemen

•Thailand

•Malta

DESIRED CHEMICAL & DESIRED CHEMICAL &

BIOLOGICAL TECHNOLOGYBIOLOGICAL TECHNOLOGY

•FERMENTERSFERMENTERS

•CENTRIFUGAL SEPARATORCENTRIFUGAL SEPARATOR

•SAFETY HOODS - CLASS II OR IIISAFETY HOODS - CLASS II OR III

•REACTOR VESSELSREACTOR VESSELS

•HASTELLOY-HIGH NICKEL ALLOYSHASTELLOY-HIGH NICKEL ALLOYS

•DOUBLE-SEAL PUMPSDOUBLE-SEAL PUMPS

DESIRED NUCLEAR TECHNOLOGYDESIRED NUCLEAR TECHNOLOGY

•MARAGING STEELMARAGING STEEL

•SPIN-FORMING MACHINERYSPIN-FORMING MACHINERY

•BERYLLIUMBERYLLIUM

•GRAPHITE COMPONENTSGRAPHITE COMPONENTS

•RADIATION SHIELDINGRADIATION SHIELDING

•ELECTRON BEAM ELECTRON BEAM WELDERSWELDERS

DESIRED MISSILE DESIRED MISSILE TECHNOLOGYTECHNOLOGY

•GUIDANCE SYSTEMGUIDANCE SYSTEM

•GPS/INSGPS/INS

•3-AXIS GYRO3-AXIS GYRO

•3-AXIS 3-AXIS ACCELERATORACCELERATOR

•MOTORMOTOR

•KEVLARKEVLAR

•MARAGING STEELMARAGING STEEL

•CARBON/CARBONCARBON/CARBON

•CARBON/ PHENOLICCARBON/ PHENOLIC

•NOSE CONE/RE-ENTRY NOSE CONE/RE-ENTRY VEHICLEVEHICLE

•CARBON/CARBONCARBON/CARBON

•SKINSKIN

•MARAGING STEELMARAGING STEEL

•SOLID FUEL MOTORSOLID FUEL MOTOR

•PROPELLANTSPROPELLANTS

•FINSFINS

•CARBON/CARBONCARBON/CARBON

Search Engines as Search Engines as Procurement ToolProcurement Tool

• The Goal as Indigenous The Goal as Indigenous Production Production

• Surfing the WebSurfing the Web

• Unsolicited EmailsUnsolicited Emails

• Procurement with Procurement with AnonymityAnonymity

Internet Use as a Terrorist ToolInternet Use as a Terrorist Tool

•AnonymityAnonymity

•Hotmail, Yahoo, Juno, Hotmail, Yahoo, Juno, GmailGmail

•Ease of AccessEase of Access

• Public LibrariesPublic Libraries

• Internet CafesInternet Cafes

• Coded MessagesCoded Messages

• Strong EncryptionStrong Encryption

Knowing Your CustomerKnowing Your Customer

•You are in the best position to know if the Customer is bona-fide.

•Does the Customer know what he’s trying to procure?

Red Flags of Potential ProblemsRed Flags of Potential Problems

Pays CashMost international transactions use pro-forma invoices or letters of credit

Won’t Provide End UserReluctance to provide end useUltimate consigneeStrong indicator of diversion

Products Inconsistent with Customer’s NeedsAnomaly of consumptionWhy is this business ordering this type of material?

Illogical RoutingAvoiding certain portsPort shoppingLess controlsCorruption in Foreign Government

Red Flags of Potential ProblemsRed Flags of Potential Problems

Packing Inconsistent with ShippingOverly secure packing to deter examination

Containerized or palletized when not normally done

Customer is Unfamiliar with ProductVague understanding of needsNo Specifics on for what product would be used

Declines Installation or Service ContractsNo warrantiesNo installation on complex equipment

Orders Placed from Different Country than End UserDiversion PointsAvoid Embargo

Handling Suspicious ContactsHandling Suspicious Contacts

• Don’t Slam the Door

• Keep it Neutral

• Obtain Contact Numbers or Email

• Quickly Contact ICE Special Agents for a Controlled and Monitored Response

Where to Find Help?Where to Find Help?

• The World Wide Web• www.export.gov

• bis.doc.gov

• treas.gov/ofac

• pmdtc.org

• Export Assistance Centers

• An Export Consultant

• Training Programs

• Your local ICE Agent

QUESTIONS ?QUESTIONS ?

Arms & Strategic Technology Arms & Strategic Technology Investigations UnitInvestigations Unit

William J. ArgueWilliam J. Argue

Special AgentSpecial Agent

617-565-7410617-565-7410

[email protected]@dhs.gov