Michael Burnett Regional Export Control Officer American Embassy Abu Dhabi U.S. Export Enforcement Examples
Michael Burnett
Regional Export Control Officer
American Embassy Abu Dhabi
U.S. Export
Enforcement Examples
2
Proliferators Attack Export Control Weaknesses
Supplier Agent/ Broker
• Some suppliers willing to export illegally, out of ignorance, for economic reasons, or to provide clandestine assistance
• Inaccurate or vague commodity descriptions on documents complicate enforcement
• Agents or brokers of foreign procurement networks obtain goods, often with circuitous buying patterns, and ship without license
• They disguise or falsify the final recipient country and/or the end user
• They exploit countries with ineffective export controls or other loopholes
• Intermediate consignees divert shipments in transit (typical smuggling tactics)
• They might use small companies or even universities to acquire facilities, equipment, technology and training
• They often use cover
names and front companies to divert items to unknown ultimate end-users
• Illegal weapons end-users purchase dual-use or uncontrolled commodities, in addition to targeted items, to hide their weapons procurements
• They provide false or misleading end- use statements on documents or on websites to disguise their weapons activities
Intermediate
Consignees End User
Export Control Investigations Regional Trends
• Use of Third Parties – Avoid Detection/Conceal Identity
• Circuitous Routing (unnecessary stops)
• Documents Trail – End-User Statements
– Shipping /Customs
– Invoices
– Emails
– Financial Transactions
Burden of Proof
1. An Export / Re-export, Conspiracy to Export / Re-export or Attempted Export / Re-export occurred.
2. Of a licensable article/ service or technical data and
3. No License was obtained.
4. Knowledge – The exporter had knowledge of the United States export laws & regulations.
Specific Intent or Willfulness – the exporter intentionally or willfully caused the export to occur in violation of United States export laws & regulations.
Joint Investigation Case Study:
ARC International, LLC
Case Background
Initiated from MicroPilot to the Canadian Department of Foreign Affairs and International Trade (DFAIT)
DFAIT to the U.S. Department of State
Department of State to the Department of Commerce, Office of Export Enforcement
Lead to OEE’s SAC Washington field office
OEE/FBI initiate joint investigation
Dual-Use Commodity In Question
Model MP2028s are autopilots designed for use in Unmanned Aerial Vehicles (UAV)
MP2028s are controlled in Canada’s Export Control List under 1-9.A.12.B
This entry corresponds directly to U.S. Commerce Control List and ECCN 9A012.b.2
Canada and U.S. require export license authorization for export to the People’s Republic of China
No License/Permit required for export from Canada to
the United States
Commodity (Cont)
,LIV1CroPilol:fr World Leaders in Small UAV Autopilots
www.micropilot.com
+1.204.344.5558
Copyright 2004 MicroPiot
MP2028g
Miniature UAV Autopilot
FEATURE RICH
world's smallest UAV autopilot; 28 grams, 4 tin by 10 cm
GPS waypoint navigation with altitude
and airspeed hold
completely independent operation including autonomous takeoff, bungee launch, hand launch and landing
powerful command set
fully integrated with 3-axis gyros / accelerometers, GPS, pressure altimeter, pressure a irspeed sensors, at on a single circuit board
extensive ata logging and telemetry collects the data you need
UAV configuration wizard and installation video simplifies setup and speeds time to market
includes HORIZON"' ground control sotwa re
Case Time Line
July 16, 2008 – MicroPilot exports 20 MP2028s to ARC International, located in the
United States
July 27, 2008 - Harold Hanson reports the shipment as missing
August 22, 2008 – MicroPilot receives request for
technical support from Chinese company
October 5, 2008 – OEE and FBI initiate a joint investigation
Investigative Actions
• Federal search warrants authorized to obtain additional information.
• Search warrant executed on the business address
of ARC International produces information
suggesting actual UAV end-use • Interviews of Defendants Harold Hanson and
Nina Hanson produce additional information
regarding location of autopilots.
U.S. Subjects (Harold and Nina Hanson, a.k.a ARC international)
Questions about End-Use
Chinese End-user claimed the MP2028s were
for use in flying model aircraft
Defendant Harold Hanson later claimed that MP2028s were for: – use in flying model jet aircraft
– use in UAVs for thunderstorm/tornado research
– use in UAVs for recording ice pack melt in the Arctic
Xi’an XiangYu End-Use
• “Xi’an XiangYu Company is a civil
aviation repair station and flying club which
is founded at 1995 and located in Xi’an city.”
• “All the MicroPilot autopilots we intended
to purchase will be only installed on model
airplanes....”
• “Our entire model airplanes would not be
used for military purposes....”
Information from Search Warrant
UAV will play the key role in the future war
Used for battlefield reconnaissance, taking picture, electro-antagonize, anti-radiancy and long distance attack.
Used for minefield survey, artillery fire adjustment, battle damage assessment, battlefield management, communication and data relay, digital mapping, flight route reconnaissance, nuclear weapon exploring, psychological warfare, electron warfare, radar disturbing suppressing, target acquisition, and city warfare.
Used for physical geography mapping, atmospheric scientific research, forest fire prevention, paddy cultivation tasks and various civil applications.
To be one of main important arming for reconnaissance, surveillance and target acquisition in the battle of Anti-terrorism.
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Sentencing
March 12, 2009: Grand Jury Indictment –Title 50 USC 1701-1705 (Export Violations)
–Title 18 USC 371 (Conspiracy)
–Title 18 USC 1001 (False Statements)
November 2009: Harold Hanson and Ya Ming Hanson pleaded guilty in Federal Court
February 2010: Both individuals sentenced
Thank You!
Michael Burnett
Regional Export Control Officer
Foreign Commercial Service (FCS)
American Embassy Abu Dhabi, UAE
+971 (0)2 414-2304 (Office)
+971 (0)2 414-2228 (Fax)
Information from Search Warrant
1. UAV will play the key role in future war
2. Main military countries multiple devote to UAV
3. Foreign countries UAV status and the trend of
UAV development
4. Huge Potential of domestic UAV market
Emails
Key Point s for Investment
Now company established R4D Center and Production Base are located at Chang'an
industrial Park. The base occupy 43 mu-with
the constructional space 25000 square meter
• Intend to invest for occupying the capability to manufacture UAV 300-500 flights per year. In two years, we will be the biggest UAV R&D and Production Base in China.