1. Directorate of Defense Trade Controls
FEDERAL BUREAU OF INVESTIGATION
Dept. of State /
Directorate of Defense Trade Controls
SSA MICHAEL O. EISEN DETAILEE TO THE DEPARTMENT OF STATE DIRECTORATE OF DEFENSE TRADE CONTROLS THIS BRIEFING IS UNCLASSIFIED FOR OFFICIAL USE ONLY
UNCLASS // FOUO

2. Objectives The National Security Threat FBI Role in Export Enforcement
FEDERAL BUREAU OF INVESTIGATION
Objectives
The National Security Threat
FBI Role in Export Enforcement
Defense Articles
Material
Technical Data
Services
Brokering
Regulation
International Traffic in Arms Regulations (ITAR)
-United States Munitions List (USML)*
We’ll discuss the impact of illegal export on National Security and the safety and security of American citizens.
We’ll talk about some of the tradecraft utilized by foreign intelligence agencies and the rationale for their focused efforts.
We’ll discuss the FBI history in export enforcement and new authority granted in Nov
We’ll discuss export regulations utilized by both Commerce and State and specifically discuss the INTERNATIONAL TRAFFIC IN ARMS REGULATION or ITAR. The ITAR is the regulation which prescribes how the U.S. Government will implement and enforce the Arms Export Control Act.
The Arms Export Control Act prohibits import and export of defense articles and services (including training) in to and from the United States without license issued by the State Department – Directorate of Defense Trade Controls (DDTC).
The United States Munitions List is incorporated in the ITAR as Part Basically, all the USML identifies all categories of defense articles and services for which a license is required. All items covered the USML are ITAR controlled and therefore export is prohibited without DDTC License. Any transfers without approved licenses could violated the Arms Export Control Act and carry civil as well as criminal penalties. The larges civil fine imposed was charged to ITT in the amount of 112 million? In relation the unauthorized exports to China. Some companies voluntary disclosure of inadvertent shipments to DDTC. In other cases DDTC issues directed disclosure letters to firms under which information must be provided. Companies not complying with DDTC Directed Disclosure requests risks debarment which precludes exports sales of defense related articles and services.
During 2006 the FBI established a full-time liaison position within DDTC.
DDTC can determine if material identified from investigative matters is covered by ITAR.
-Can determine if Companies are registered or have export licenses
-Can determine if individuals are registered or have export licenses
-Can determine if individuals or companies are registered to engage in brokering activity.
-DDTC can also provide limited financial information concerning subject of investigations.
May get names of other principals of the company as well as routing and account info for financial institution. Each registered entity individual or company must provide a registration fee, by check, with each application. The check are scanned and are available for use in FBI investigations. DDTC information can be used in application to criminal courts and in FI requests. Individuals must be registered in order to submit export license requests.
UNCLASS // FOUO

3. Objectives Export Laws Arms Export Control Act
FEDERAL BUREAU OF INVESTIGATION
Objectives
Export Laws
Arms Export Control Act
Export Administration Act
Trading with the Enemy Act
International Emergency Economic Powers Act
We’ll discuss the impact of illegal export on National Security and the safety and security of American citizens.
We’ll talk about some of the tradecraft utilized by foreign intelligence agencies and the rationale for their focused efforts.
We’ll discuss the FBI history in export enforcement and new authority granted in Nov
We’ll discuss export regulations utilized by both Commerce and State and specifically discuss the INTERNATIONAL TRAFFIC IN ARMS REGULATION or ITAR. The ITAR is the regulation which prescribes how the U.S. Government will implement and enforce the Arms Export Control Act.
The Arms Export Control Act prohibits import and export of defense articles and services (including training) in to and from the United States without license issued by the State Department – Directorate of Defense Trade Controls (DDTC).
The United States Munitions List is incorporated in the ITAR as Part Basically, all the USML identifies all categories of defense articles and services for which a license is required. All items covered the USML are ITAR controlled and therefore export is prohibited without DDTC License. Any transfers without approved licenses could violated the Arms Export Control Act and carry civil as well as criminal penalties. The larges civil fine imposed was charged to ITT in the amount of 112 million? In relation the unauthorized exports to China. Some companies voluntary disclosure of inadvertent shipments to DDTC. In other cases DDTC issues directed disclosure letters to firms under which information must be provided. Companies not complying with DDTC Directed Disclosure requests risks debarment which precludes exports sales of defense related articles and services.
During 2006 the FBI established a full-time liaison position within DDTC.
DDTC can determine if material identified from investigative matters is covered by ITAR.
-Can determine if Companies are registered or have export licenses
-Can determine if individuals are registered or have export licenses
-Can determine if individuals or companies are registered to engage in brokering activity.
-DDTC can also provide limited financial information concerning subject of investigations.
May get names of other principals of the company as well as routing and account info for financial institution. Each registered entity individual or company must provide a registration fee, by check, with each application. The check are scanned and are available for use in FBI investigations. DDTC information can be used in application to criminal courts and in FI requests. Individuals must be registered in order to submit export license requests.
UNCLASS // FOUO

4. The Threat to U.S. National Security
FEDERAL BUREAU OF INVESTIGATION
COUNTERPROLIFERATION CENTER
The Threat to U.S. National Security
The U.S. has some of the most advanced military in the world
Agents of foreign powers and others are aggressively attempting to acquire sensitive U.S. military technologies and information to steal our edge
Most countries acknowledge that the U.S. is a leading military power as was demonstrated during the initial days of military action in Iran and Afghanistan.
Our systems have been tested and foreign government want access to this technology to advance their own military posture. However, if a foreign operative can covertly acquire controlled U.S. technology, the receiving government avoids Research & Development cost and can move to full scale production in a relative short period with an appropriate industrial base. The research and development time for a sophisticated weapon system can incorporate as much as ten years or more. R and D costs for new advanced missile systems or aircraft could easily exceed 100 million dollars. Stolen technology directly impacts the military superiority of the U.S. and degrades our national security.
The threat from technology compromise is both asymmetrical and symmetrical.
The Symmetric Threat includes: THING WE KNOW ABOUT, EXPECT, AND ARE FAMILIAR WITH
IO at Embassies, Consulates and other known locations
IO included in visiting foreign delegations
IO under student cover
The Asymmetric Threat include: THING WE KNOW LESS ABOUT AND MAY NOT EXPECT
Individuals operating Front Companies
Former Defense Contractors (gone bad)
Individuals working from home
People we are simply not aware of
UNCLASS // FOUO

5. FEDERAL BUREAU OF INVESTIGATION
The FBI’s Role
On 11/05/2004, the Attorney General signed an order clarifying FBI jurisdiction in export matters with a counterintelligence nexus.
As written, the order designates "the FBI to take charge of investigative work in matters relating to espionage, sabotage, subversive activities, and related matters, including investigating any potential violations of the Arms Export Control Act, the Export Administration Act, the Trading with the Enemy Act, or the International Emergency Economic Powers Act, relating to any foreign counterintelligence matter".
Title 28, Chapter I, Part 0, Subpart P, Section 0.85, para (a) and para (d) – effective 11/15/2004
During Nov 2004, the FBI was given concurrent jurisdiction in export matters with a counterintelligence nexus. Prior to this time, the FBI had no export enforcement authorities. Presently, the FBI can initiate investigations relative to the main federal statutes restricting export of dual-use, defense and WMD related materials.
UNCLASS // FOUO

6. FEDERAL BUREAU OF INVESTIGATION
DEFENSE ARTICLES
An article or service may be designated as a defense article or service if it:
Is specifically designed, developed, configured, adapted, or modified for a military application, and
Does not have predominant civil applications, and
Does not have performance equivalent to those of an article or service used for civil applications
Includes material, tech data, services, and brokering activities
During Nov 2004, the FBI was given concurrent jurisdiction in export matters with a counterintelligence nexus. Prior to this time, the FBI had no export enforcement authorities. Presently, the FBI can initiate investigations relative to the main federal statutes restricting export of dual-use, defense and WMD related materials.
UNCLASS // FOUO

7. FEDERAL BUREAU OF INVESTIGATION
TECHNICAL DATA
Information required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles.
Includes information in the form of blueprints, drawings, photographs, plans, instructions or documentation.
Tech Data is detailed enough to allow adversary to independently produce items.
During Nov 2004, the FBI was given concurrent jurisdiction in export matters with a counterintelligence nexus. Prior to this time, the FBI had no export enforcement authorities. Presently, the FBI can initiate investigations relative to the main federal statutes restricting export of dual-use, defense and WMD related materials.
UNCLASS // FOUO

8. FEDERAL BUREAU OF INVESTIGATION
DEFENSE SERVICE
Furnishing assistance to foreign persons, whether in the United States or abroad in the design, development, engineering , manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of defense article;
Furnishing to foreign persons of any technical data whether in United States or abroad; or
Training whether in United States or abroad
During Nov 2004, the FBI was given concurrent jurisdiction in export matters with a counterintelligence nexus. Prior to this time, the FBI had no export enforcement authorities. Presently, the FBI can initiate investigations relative to the main federal statutes restricting export of dual-use, defense and WMD related materials.
UNCLASS // FOUO

9. FEDERAL BUREAU OF INVESTIGATION
BROKERING
Broker – any person who acts as an agent for others in negotiating or arranging contracts, purchases, sales or transfers of defense articles or defense services in return for a fee, commission, or other consideration.
Brokering Activity – includes financing, transportation, freight forwarding, or taking of any other action that facilitates the manufacture, export, or import of a defense article or defense service. (319T-HQ-A )
Includes activities of U.S. persons located inside or outside the United States.
During Nov 2004, the FBI was given concurrent jurisdiction in export matters with a counterintelligence nexus. Prior to this time, the FBI had no export enforcement authorities. Presently, the FBI can initiate investigations relative to the main federal statutes restricting export of dual-use, defense and WMD related materials.
UNCLASS // FOUO

10. EXPORT CONTROL LAWS Arms Export Control Act (AECA)
FEDERAL BUREAU OF INVESTIGATION
EXPORT CONTROL LAWS
Arms Export Control Act (AECA)
- prohibits unauthorized export of defense articles and services
- ITAR/USML controlled material and services
Export Administration Act
- prohibits unauthorized export of dual use equipment
International Emergency Economic Powers Act
- Federal law allowing President to identify any unusual extraordinary threats that originates outside the United States and to prohibit transactions in response
Trading With The Enemy Act
- prohibits commerce with any nations for which the U.S. is at war
UNCLASS // FOUO

11. FEDERAL BUREAU OF INVESTIGATION
The ITAR
The Department of State, Directorate of Defense Trade Controls (DDTC) , is responsible for administering the Arms Export Control Act (AECA) and its regulations, the International Traffic in Arms Regulations (ITAR)
The ITAR regulates the export of defense articles, defense services and brokering activities
Defense articles (including tech data) and defense services are designated as such by the DOS, with the concurrence of the DOD, and constitute the USML
UNCLASS // FOUO

12. THE UNITED STATES MUNITIONS LIST
FEDERAL BUREAU OF INVESTIGATION
THE UNITED STATES MUNITIONS LIST
ITAR Section 121
The United States Munitions List (USML) contains 21 categories of defense articles, services and related tech data for which an export license is required.
Additions/Changes are made via the Federal Register.
Commodity Jurisdiction may confirm DDTC regulatory authority. May also indicate item is non-ITAR control.
UNCLASS // FOUO

13. U.S. MUNITIONS LIST CATEGORIES
FEDERAL BUREAU OF INVESTIGATION
U.S. MUNITIONS LIST CATEGORIES
I – Firearms, Close Assault XI – Military Electronics
Weapons, Combat Shotguns
XII – Fire Control, Range Finder, Optical and
II – Guns and Armament Guidance and Control Equipment
III – Ammunition/Ordnance XIII – Auxiliary Military Equipment
IV – Launch Vehicles, Missiles, Ballistic XIV –Toxicological Agents (Chem/Bio)
Missiles, Rockets, Torpedoes, Bombs
and Mines XV – Spacecraft Systems and Equipment
V – Explosives and Energetic Materials XVI – Nuclear Weapons and Related Items
VI – Vessels of War/Special Naval Equipment XVII –Classified Articles/Tech Data/Services Not
Otherwise Enumerated
VII –Tanks and Military Vehicles
XVIII –Directed Energy Weapons
VII – Aircraft and Associated Equipment
XIX – Reserved
IX – Military Training Equipment/Training
XX - Submersible Vessels and Equipment
X – Protective Personnel Equipment /Shelters XXI – Miscellaneous Articles*

14. Commodity Jurisdiction
FEDERAL BUREAU OF INVESTIGATION
COUNTERPROLIFERATION CENTER
Commodity Jurisdiction
DOUBT EXISTS WHETHER ITEM IS ITAR
MANUFACTURER
DDTC - Policy
DOD
COMMERCE
Outcome 1 Item falls under jurisdiction of the Department of State
Outcome 2 Item does not fall within jurisdiction of the Department of State and is regulated by Department Commerce
UNCLASS // FOUO

15. Liaison with Regulatory Agencies
FEDERAL BUREAU OF INVESTIGATION
COUNTERPROLIFERATION CENTER
Liaison with Regulatory Agencies
To accomplish our goals we must have effective liaison with those agencies who regulate the export of dual-use items and defense articles.
The Department of Commerce
The Department of State
UNCLASS // FOUO

16. Export - Federal Agencies
FEDERAL BUREAU OF INVESTIGATION
COUNTERPROLIFERATION CENTER
Export - Federal Agencies
Regulatory Law Enforcement
Defense Dual-use
DDTC X
Commerce X X
ICE X X
FBI X X
UNCLASS // FOUO

17. Who Controls What? Defense Articles Dual-use Items Regulating Agency
FEDERAL BUREAU OF INVESTIGATION
COUNTERPROLIFERATION CENTER
Who Controls What?
Defense Articles
Dual-use Items
Regulating Agency
DOS, Directorate of Defense Trade Controls
DOC, Bureau of Industry and Security
Investigative Agencies
FBI, ICE
FBI, ICE, OEE
Statute
Arms Export Control Act
22 U.S.C §§
Export Administration Act / International Emergency Economic Powers Act
50 U.S.C §§
Implementing Regulations
International Traffic in Arms Regulations (ITAR)
22 C.F.R. Parts
Export Administration Regulations (EAR)
15 C.F.R. Parts
Control List
U.S. Munitions List
22 C.F.R. Part 121
UNCLASS // FOUO
Commerce Control List

18. Fines & Penalties Civil Violations of the AECA & ITAR
FEDERAL BUREAU OF INVESTIGATION
COUNTERPROLIFERATION CENTER
Fines & Penalties
Civil Violations of the AECA & ITAR
$500,000 for each violation
Extra compliance measures
Debarment
Criminal Violations of the AECA & ITAR
$1 million for each violation
10 years imprisonment
Debarment (mandatory upon conviction)
UNCLASS // FOUO

19. Questions ? SSA MICHAEL O. EISEN 202-632-2875 (DDTC)
FEDERAL BUREAU OF INVESTIGATION
COUNTERPROLIFERATION CENTER
Questions ?
SSA MICHAEL O. EISEN
(DDTC)