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U.S. RUSSIAN SEMINAR ON NUCLEAR EXPORT CONTROL ISSUES

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Bureau of Industry and Security U.S. Department of Commerce Rick Shimon Special Agent In Charge Washington Field Office May 22, 2006 – PowerPoint PPT presentation

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Title: U.S. RUSSIAN SEMINAR ON NUCLEAR EXPORT CONTROL ISSUES


1
Bureau of Industry and Security U.S. Department
of Commerce
Rick Shimon Special Agent In Charge Washington
Field Office May 22, 2006
2
National Security A shared responsibility between
Exporting Community and Law Enforcement
3
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

4
What we can do for you
  • We can assist you in avoiding illegal
    transactions.
  • We can assist you in avoiding negative publicity.
  • We can assist you in avoiding fines and prison
  • 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.

5
Illinois Tool Works Inc.
INDUSTRIAL SCIENTIFIC CORPORATION
PAN AVIATION
IGG Corporation
Lawrence Livermore National Laboratory
ATT Communications
Hercaire
RII
OMEGA
TAL Industries
CCP
SYNTEX
JML FREIGHT
SWISSCO
ICS INC
SIGMA-ALDRICH
Digital Creations
6
  • Why do we need controls on
  • Dual-Use commodities?

7
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
    equipmentterminated
  • Lived on Ocean View Drive, Cape Town SA in
    exclusive Millionaires Row


8
Pakland PME Corporation Islamabad, Pakistan
  • Owner Humayun Khan
  • Supplies Pakistans 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


9
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

10
The Commodities
  • High Speed Oscilloscopes
  • ECCN 3A292
  • South Africa
  • No License Required
  • Pakistan
  • License Required
  • End use
  • Electronics testing
  • Nuclear detonation testing

11
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
12
The Scheme
X



13
The rest of the story
  • Asher Karni
  • ArrestedJan 04
  • Guilty PleaAug 04
  • Sentenced 3 years Fed Prison Aug 05
  • Old Sentencing Guidelines
  • I felt shock and horrorhow 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
14
  • UNITED STATES DISTRICT COURT
  • FOR THE DISTRICT OF COLUMBIA
  • Grand Jury
  • I N D I C T M E N T
  • UNITED STATES OF AMERICA
  • v.
  • HUMAYUN A. KHAN, Defendant
  • VIOLATIONS 18 U.S.C. 371 (Conspiracy)
  • 50 U.S.C. (Export Admin Act)

15
Export Enforcement Investigations and Sanctions
  • Criminal Investigations
  • Sanctions
  • Criminal fines and imprisonment
  • Civil fines and penalties
  • Denial of export privileges

16

What Makes a Criminal Case?
  • Willfulness
  • Deliberate Ignorance (Self Blinding)
  • Corporate Knowledge

17

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
18
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

19
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

20
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.

21
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

22
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

23
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 Pakistans nuclear bomb

24
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 wayor the hard way

25
True or False?
  • BIS permits exporters to use the When in Doubt
    Use NLR rule to ensure shipments are not
    delayed?
  • You shouldnt 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

26
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?

27
A Shared Responsibility
  • Keeping the most sensitive goods
  • out of the most dangerous hands

28
Report Suspicious Transactions
  • Washington Field Office - (703) 487-9300
  • 24 Hour Hot Line - (800) 424-2980
  • www.bis.doc.gov
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