ICE Jacqueline Cannon Senior Special Agent (619)

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Counter-Proliferation Investigations Project Shield America

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Mission ICE Counter-Proliferation Investigations Protect the American public from the introduction of WMD and other instruments of terror into the United States Prevent proliferating foreign entities and terrorist organizations from obtaining strategic technology, licensable dual-use commodities, weapons, munitions, funds, and technical support that could constitute an immediate threat to national security Protect U.S. business interests and revenue

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Partnership ICE and Private Industry An industry outreach program designed to obtain assistance and cooperation from manufacturers, sellers, and exporters of U.S. origin technology, dual-use, and munitions Provide an opportunity and forum for private sector input and feedback Enhance public awareness of export laws

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Partnership ICE and Private Industry We can assist you in detecting and avoiding illegal transactions, which: Cause negative publicity; Result in fines, debarment, and/or imprisonment; Bring potential significant costs for legal representation resulting from a criminal or administrative proceeding

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Why the U.S. Controls Exports Military / National Security Concerns To restrict the export of goods, technology, and services that could contribute to the military capabilities of any other country or combination of countries which could result in an imminent threat to the national security of the United States

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Why the U.S. Controls Exports Foreign Policy / Embargos To restrict the export of goods and technology where necessary to further the foreign policy of the United States or to fulfill its declared international obligations Enhance regional stability Terrorist concerns

ICE Office of Investigations Counter – Proliferation Investigations March 2009 To protect U.S. business interests by preventing loss of U.S. origin technology to countries and entities interested in re- engineering commodities, which can result in the significant loss of revenue to the U.S. economy Why the U.S. Controls Exports Protect U.S. Industry

ICE Office of Investigations Counter – Proliferation Investigations March 2009 U.S. Export Laws Arms Export Control Act Administered by the U.S. Department of State, Directorate of Defense Trade Controls (DDTC) International Traffic in Arms Regulations – Title 22 CFR United States Munitions List (USML) ITAR recordkeeping requirement – Five years from date of export

ICE Office of Investigations Counter – Proliferation Investigations March 2009 U.S. Export Laws Arms Export Control Act Title 22 USC 2778 Requires registration of persons and companies engaged in the business of manufacturing, brokering or exporting defense articles and services Requires licenses to export firearms, munitions and technology Criminal violations enforced by ICE

ICE Office of Investigations Counter – Proliferation Investigations March 2009 U.S. Export Laws Arms Export Control Act / Brokering No person may engage in the business of brokering activities of United States Munitions List commodities or technology without a license, issued by DDTC A broker is 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, compensation, or other consideration Brokering means acting as a broker and includes financing, transportation, freight forwarding, or taking any other action that facilitates the manufacture, export, or import of a defense service, irrespective of its origin

ICE Office of Investigations Counter – Proliferation Investigations March 2009 U.S. Export Laws International Emergency Economics Powers Act (IEEPA) 50 USC USC App. 2401, Et seq. Administered by the Department of Treasury, Office of Foreign Assets Control (OFAC) Economic sanctions and embargoes against countries and individuals (i.e. terrorists) Current sanctions can be found: Enforced by ICE

ICE Office of Investigations Counter – Proliferation Investigations March 2009 U.S. Export Laws Export Administration Act Governs the export controls for commercial and dual-use products Export Administration Act (EAA) expired in August 1994, however the Export Administration Regulations (EAR) are enforced under IEEPA by Presidential order Complete EAR, CCL, and Commerce country chart can be found: Administered by the U.S. Department of Commerce - Bureau of Industry Security Enforced by ICE and Commerce

ICE Office of Investigations Counter – Proliferation Investigations March 2009 U.S. Export Laws Trading with the Enemy Act (TWEA) 50 USC App Only applies to Cuba at this time Administered by OFAC No exports or imports authorized without permission from OFAC (humanitarian reasons)

ICE Office of Investigations Counter – Proliferation Investigations March 2009 U.S. Export Laws Smuggling Goods from the U.S. Title 18 USC 554 (Effective March 2006) Any export or attempt to export The transportation, concealment, transfer, purchase of any merchandise knowing that it is to be exported contrary to any law or regulation

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Technology is "released" for export when it is available to foreign nationals in the following forms: Visual inspection (such as reading technical specifications, plans, blueprints, etc.) Exchanged orally Made available by practice or application under the guidance of persons with knowledge of the technology Project Shield America Deemed Exports / Intangible Transfers

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Export license required under the "deemed export“ rule when both of the following conditions are met: 1.Intent to transfer controlled information to foreign nationals while in the United States; and 2.Transfer of the same technology to the foreign national's home country would require an export license Project Shield America Deemed Exports

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Releases of U.S. Technology: Inter-company transfers Nonimmigrant employees Nonimmigrant students/scholars Foreign scientists Joint ventures Tours of labs Project Shield America Potential Vulnerabilities

ICE Office of Investigations Counter – Proliferation Investigations March 2009 FIVE General phases to any export deal 1.Inquiry 2.Negotiation 3.Contracting & sales 4.Shipping 5.Warranty & maintenance Project Shield America Exporting Process

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Multiple requests for identical product or multiple buyers Information requests for “educational research” Uneducated or unfamiliar customer “Mom & pop shop” commodity broker Uninformed buyer Outside normal sales channels Exporting Process Inquiry Phase Red Flags

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Uninformed buyer Unusual payment terms  Cash  Roundabout wire transfers No price negotiation Vague or non-existent end-user information Refusal to provide end-use application information Exporting Process Negotiation Phase Red Flags

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Late change in deal terms and/or source of payment Request drop shipment Refusal to provide end-user certificate Exporting Process Contracting & Sales Phase Red Flags

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Hand-carry of data or equipment Drop shipment to holding company or third country freight forwarder Inconsistencies across various documents Suspect end-user: transshipment location Inconsistent packaging or marking request Incorrect license designation Product does not match SED or license Manuals & documentation in wrong language Multiple shipments using single license number Exporting Process Shipping Phase Red Flags

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Merchandise returns or repair requests from wrong customer location Request for replacement parts to wrong customer location Troubleshooting inquiries by from different end-user or in the wrong language Refusal to cooperate with post-shipment verification Discovery of item in unauthorized location Exporting Process Warranty & Maintenance Phase Red Flags

ICE Office of Investigations Counter – Proliferation Investigations March 2009 It is UNLAWFUL to: Export or attempt to export from the U.S., or to re-export any defense article or technical data, or to furnish any defense service without first obtaining the required licenses from the DOS Export or attempt to export from the U.S., or to re-export any dual-use item without first obtaining the required licenses from the DOC Exporting Violations Consequences of Non-Compliance

ICE Office of Investigations Counter – Proliferation Investigations March 2009 It is UNLAWFUL to: Sell or transfer any export controlled commodity to a person or business within the U.S., knowing it will be illegally exported by that person or business Without a license, provide a foreign national access to information or data within the U.S. if the transfer of the same technology to the foreign national’s home country would require an export license Violate any of the terms or conditions of licenses or authorization granted by the DOS, DOC or OFAC Exporting Violations Consequences of Non-Compliance

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Exporting Violations Consequences of Non-Compliance Seizure and/or forfeiture of goods Imprisonment up to ten years for individuals responsible for criminal violations Loss of export and import privileges Administrative penalties Debarment from government contracting Placement of company on “denied parties list” Fines up to $1 million per violation or five times the value of the product, whichever is greater

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Export Compliance Your Role in Compliance Know your customer Be alert Recognize potential illegal exports and diversion See that transactions/orders for production parts or technology are handled by export specialists Ensure that your export compliance specialists are knowledgeable about current export controls and licensing procedures

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Export Compliance Due Diligence/Screening Businesses should screen prospective customers, vendors, suppliers, sub-contractors, sales representatives, consultants, or any party to a proposed export/import transaction against the following lists: Specially Designated Nationals Denied Persons List Debarred Parties List

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Export Compliance Due Diligence/Screening Be prepared to answer these questions about your products or services: What is the commodity? Is the item listed on the USML or the CCL? Does the item contain encryption? Where is it going, what is the country of ultimate destination? Who will receive it, who is the ultimate end- user?

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Be prepared to answer these questions about your products or services: Does the end-use involve military applications? What, if any, are the civil/commercial applications for the product? Is the item specifically configured, adapted, modified, designed, and/or developed for military application? If in doubt, submit a “Commodity Jurisdiction Request” to the Department of State at Export Compliance Due Diligence/Screening

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Export Compliance Known Proliferation Countries Iran North Korea China Syria

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Proliferation Security Initiative Announced by President Bush in 2003, PSI was formed to create a multi-national effort to interdict illegal shipments of WMD, their delivery systems and related materials ICE is the primary U.S. law enforcement agency involved in the interdiction and investigation of “high interest” illegal exports of U.S. origin technology destined to countries of concern

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Export Compliance Potential Transshipment Countries U.A.E Cyprus Jordan Malta Thailand Yemen Sudan Singapore Malaysia

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Project Shield America Desired Chemical & Biological Technology Fermenters Centrifugal separators Safety hoods - Class II or III Reactor vessels Hastelloy-high nickel alloys Double-seal pumps

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Project Shield America Desired Nuclear Technology Maraging steel Spin-forming machinery Beryllium Graphite components Radiation shielding Electron beam welders

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Project Shield America Desired Missile Technology Guidance systems  GPS/INS  3-axis gyro  3-axis accelerator Motors  Kevlar  Maraging steel  Carbon/carbon  Carbon/phenolic

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Project Shield America Desired Missile Technology Nose cone/re-entry vehicle  Carbon/carbon Skin  Maraging steel Solid fuel motor  Propellants Fins  Carbon/carbon

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Project Shield America How to respond to a suspicious contact Keep it neutral Quickly contact ICE Special Agents for a controlled and monitored response Don’t slam the door Save all correspondence and make note of phone calls Obtain contact numbers and with full headers

ICE Office of Investigations Counter – Proliferation Investigations March 2009 Project Shield America Contact Information Immediately report all suspicious export inquiries to ICE officials at: DHS-2ICE

ICE Jacqueline Cannon Senior Special Agent (619)