Rogue Planet

Russian Arms Exporter Sanctioned Over Iran

By Glenn Kessler
Washington Post Staff Writer
Saturday, October 25, 2008; A12

The State Department has slapped financial sanctions on Russia's state arms exporter for its dealings with Iran, but in an unusual move, it granted the company a partial waiver to permit the sale of nearly two dozen Russian helicopters to Iraq, U.S. officials said yesterday.

The new sanctions -- required by U.S. law to thwart the sale of sensitive technology that could help Iran, North Korea and Syria develop weapons of mass destruction or missile systems -- were also imposed on 12 other companies or organizations based in China, Iran, North Korea, South Korea, Sudan, Syria, the United Arab Emirates and Venezuela.

Russian Foreign Minister Sergei Lavrov denounced the sanctions on Russia's Rosoboronexport, and its subsidiaries, as illegal and unjust. The company had been sanctioned by the United States in 2006 but would have come off the list had the State Department determined that it had not made any suspect sales in the past two years.

"These new sanctions were introduced without any international legal foundation whatsoever," Lavrov said in Moscow. "Russia will of course take this into account in practical affairs and relations with the United States, such as in trade and economic and other spheres."

He added that Russia would not change its policies on Iran because of the sanctions. "All our trade and all of our military-technical cooperation with Iran is carried out in strict accordance with current international legal norms," he said. "There can be no other explanation here than the rather arrogant extra-territorial implementation of American laws."

Improvements to the Defense Trade Export Control System

John C. Rood, Acting Under Secretary for Arms Control and International Security 

Remarks at the Center for Strategic and International Studies 
Washington, DC 
February 26, 2008

Good afternoon and thank you Arnold [Arnold Kanter-The Scowcroft Group] for that kind introduction. It is my pleasure to be here, and I would like to thank CSIS, the Aerospace Industries Association, the National Association of Manufacturers, and the U.S. Chamber of Commerce for helping to organize this opportunity for me to speak with you today.

I am excited to discuss with you the significant changes that this Administration has undertaken which we believe will maintain the United States’ ability to control sensitive military technology and at the same time, permit U.S. companies to export their products in a more timely and predictable manner and collaborate more effectively with foreign companies.

If I may first tell you a bit about my background. My government service began as an analyst in the U.S. intelligence community, and has included work as a staff person to Senator John Kyl, service on the National Security Council, and as the Assistant Secretary of State for International Security and Nonproliferation. Last fall, I was named Acting Under Secretary of State for Arms Control and International Security. My current portfolio is quite wide-ranging, and includes the responsibility for administering the Department of State’s defense export licensing program, and providing foreign policy input to the dual-use export licensing program administered by the Department of Commerce.

Today, I want to discuss three areas related to defense trade reform that have been a primary focus for me since last May: changes related to the way the State Department’s Directorate of Defense Trade Controls does business, the recent Presidential Directive on defense trade reform, and the treaties on defense trade cooperation that President Bush signed with the United Kingdom and Australia. I would like to first give you some context about the effort to create these treaties and several related Administration initiatives in export controls.

DDTC Notice Regarding Applications Submitted for Firearms

I'd love to see the list of 'commonly asked questions from Congressional staffers':

25 February 2008

Under 123.15(a)(3) of the ITAR, a license application for the export of firearms with a total value of $1 million or higher will require Congressional notification. To assist in expediting the certification process, and to respond to commonly asked questions from Congressional staffers, additional information is required to be submitted with your application for firearms exports totaling $1 million or higher:

* If the end-user is a defense ministry or a law enforcement agency:
What will happen to the weapons in their inventory? (E.g., current inventory will be sold, reassigned to another service branch, destroyed)
* Provide information on the ultimate end-user (i.e., branch of military, unit designation) and location (if known).
* If the end-user is a firearms dealer importing the firearms for commercial resale:
Provide as much information as you have regarding the ultimate end-use/end-user

[state.gov]

Another US Administration Says ITAR License Review Will Get Better

By: Danielle McClellan and John Black

President Bush issued an Export Control Directive on January 22, 2008, the directive is presumed to improve the way in which the Department of State responds to the many licenses it receives for the export of defense equipment, services, and technical data. Bush promised, 'a more efficient and transparent export license process" and better "dispute resolution mechanisms" but was sure to include that there will remain a strong monitor on protecting national security.

The specific changes include:
1. Additional financial resources and intelligence support to provide timely adjudication of defense trade licenses
2. New guidelines requiring decisions by the U.S. Government on defense trade export license applications within 60 days unless there is strong reason for additional time which must be approved
3. The electronic licensing system will be upgraded to allow all types of defense trade licenses and their submission
4. An interagency will be created to allow for timely resolution of licensing jurisdiction issues under the Commodity Jurisdiction process
5. A multi-agency working group will be created to improve procedures for export enforcement investigations

GAO Slams DDTC Licensing Process

No surprises here - in November the General Accounting Office released a report entitled "State Department Needs to Conduct Assessment to Identify Inefficiencies and Challenges in the Arms Export Process", also known as the "SDNTCATIAICITAEP" or "The Current System Blows" report.

In summary, the GAO identified that while the caseload of export licenses increased 20 percent between FY2003 and 2006, the median processing time doubled and number of open cases increased by 50 percent. To address the growing caseload, DDTC managed to reduce the number of open cases, but at the expense of longer staff hours and cancellation of unrelated training, meetings, etc.

The DDTC responded last week with the statement: "The Department largely concurs with the overall GAO recommendations, but notes that because the GAO study used data available through April 2007, it does not reflect the many steps that have been taken to improve processes since that time."

DDTC also cited new controls meant to reduce the number of open cases and processing times, to include a Deputy Assistant Secretary review for cases over 60 days old.

GAO Report [.pdf]

DDTC Response

Legislation Introduced To Improve DDTC Processing Times

Representative Brad Sherman (D-CA) recently introduced, with one other Democrat and two Republicans, a bill to “improve the performance of the defense trade controls functions of the Department of State.” The proposed legislation is a clear response to mounting exporter frustration over increasing delays by the Directorate of Defense Trade Controls (”DDTC”) in processing licenses and other export-related requests.

The centerpiece of the proposed legislation is the imposition of mandatory average processing times. For transactions not subject to Congressional notification requirements, for example, licenses to NATO members, Australia, Japan, New Zealand, and Israel must be processed, on average, within 20 days; 30 days for exports to major non-NATO allies; and 60 days to everyone else. Commodity jurisdiction requests would be required to be acted upon by DDCTwithin 60 days on average.

DDTC’s average processing times for Technical Assistance Agreements (”TAAs”) would need to be 120 days. It’s not clear why the proposed legislation would permit a significant delay in processing TAAs when license requests are put on such a short string. Further, the time limit doesn’t cover approving amendments to TAAs, even though the most significant delays currently being experienced are with respect to such amendments.

The proposed legislation would also significantly change the current provisions of the International Traffic in Arms Regulations (”ITAR”) relating to exports of spare parts. Under the proposed changes, a DDTC license would not be required for exports of spare and replacement parts to NATO members, Australia, New Zealand and Japan in specified circumstances, including that the parts and components are one-for-one replacements for parts and components for an item previously exported pursuant to a DDTC license. Under section 123.16(b)(2) of the ITAR, components or spare parts can be exported without a license in support of a defense article previously authorized for export as long as the value is under $500, the parts are going to the end user and not a distributor, and no more than 24 shipments are made per year to the end user. If this proposal is adopted, spare parts can be exported even if their value exceeds $500 and more than 24 shipments are made per year.

[exportlawblog.com]

DDTC Congressional Notifications

If reading the Federal Register is your idea of a good time, feel free to swim in the latest sea of proposed sales. Among the highlights:

* 25mm Piranha turrets for Kuwait
* Firearms for Malaysia
* Gun propellant technology for Australia
* M2HB and MK19 component manufacturing for Spain

Federal Register Notifications