Monthly Archives: October 2017

October 18, 2017

Why Is Sudan Not Subject to the Same ITAR Prohibitions as Other State Sponsors of Terrorism?

by Steven Pelak,  Jason Prince and Gwen Green

Reflecting the thaw in United States–Sudan diplomatic relations, the U.S. Government announced on October 6, 2017 that it would permanently revoke certain economic sanctions against Sudan, effective October 12, 2017.  Following the lifting of those sanctions imposed by the Office of Foreign Assets Control (“OFAC”) which were imposed by the President’s November 1997 Executive Order 13067, U.S. persons are no longer prohibited generally from engaging in transactions that were previously prohibited without an OFAC license under the Sudanese Sanctions Regulations (“SSR”).  Sudan remains, however, designated on the U.S. Department of State’s State Sponsors of Terrorism List, along with Iran and Syria.  The Trump Administration has not indicated whether the terrorism designation of Sudan will change in the near future.

That being the case, now is a good time to ask:  How and why does the Department of State/Directorate of Defense Trade Controls (“DDTC”) (a) treat Sudan differently under the International Traffic in Arms Regulations (“ITAR”) than the other designated state sponsors of international terrorism, and (b) apparently ignore the statutory prohibition on the export of defense articles and defense services to state sponsors of international terrorism as required by Congress under the Arms Export Control Act (“AECA”)?

Unlike the treatment of Iran and Syria for which the ITAR notes a blanket policy of denial (22 C.F.R. 126.1(d)(1)), the ITAR specifies with regard to Sudan that “[i]t is the policy of the United States to deny licenses or other approvals for exports or imports of defense articles and defense services . . . except a license or other approval may be issued, on a case-by-case basis, for” certain broadly defined categories of defense articles and defense services.  22 C.F.R. § 126.1(v).  On what authority has DDTC allowed for a case-by-case evaluation of license applications for the export of defense articles and defense services destined for Sudan, given that Congress has expressly prohibited such exports under the AECA, 22 U.S.C. § 2780?  The answer to this question is unclear, and it appears that DDTC may have overstepped its statutory and constitutional authority in suggesting that it maintains the authority on a case-by-case basis to license the export of arms and defense services to Sudan. Continue reading

October 9, 2017

Second Circuit Upholds Sentence for Attempt to Export F-35 Technology to Iran

by Steven Pelak,  Jason Prince and Gwen Green

On October 5, 2017, the Second Circuit upheld the over 8 years sentence of Mozaffar Khazaee who pleaded guilty in February 2015 to violating the Arms Export Control Act, 22 U.S.C. § 2778 (the “AECA”) by attempting to transfer to Iran proprietary, trade secret and export controlled material relating to the U.S. Air Force’s F-35 Joint Strike Fighter (JSF) Program.  Mr. Khazaee allegedly stole the materials from U.S. defense contractors where he had formerly worked, and many of the documents were prominently labeled as “Export-Controlled” and stamped with “ITAR-controlled” warnings.

In November 2015, we published a blog post noting the surprise of many that the U.S. Government originally charged and indicted Mr. Khazaee solely with the federal offense of Interstate Transportation of Stolen Property (“ITSP”) rather than a violation of the AECA and the International Traffic in Arms Regulations (“ITAR”).   Mr. Khazaee pleaded guilty on February 25, 2015 via a “Substitute Information” to one count of the unlawful export of technical data from the United States in violation of the AECA.  On October 23, 2015, Mr. Khazaee was sentenced to 97 months in prison and ordered to pay $50,000 in fines for violating the AECA. Continue reading