As we continue with our export enforcement
program, one problem continues to surface.
That is the Customs and Department of
Commerce Office of Export Enforcement
(OEE) dual role with enforcing the Export
Administration Act.

According to legislative history, the intent of
the shared EAA enforcement roles was clearly
to combine the resources and skills of the U.S.
Customs Service's traditional law enforce-
ment organization with the DOC’s export
licensing expertise. This shared enforcement
responsibility has caused jurisdictional
disputes and fragmented enforcement of the
EAA. While both agencies are continuing to
cooperate, operational disagreements that
exist between the DOC/OEE and the U.S.
Customs Service hinder effective export
enforcement. Additionally, the DOC limits
Customs access to some of its licensing
information.

In addition to its authority to enforce both the
Export Administration Act and the Arms
Export Control Act, the Customs Service also
enforces the outbound provisions of the Bank
Secrecy Act, the Chemical Diversion and
Trafficking Act, and other statutes. This
enforcement authority coupled with Customs
border search authority makes the Customs
Service the only U.S. agency capable of
responding to all outbound enforcement
problems at our ports and borders.

Since 1981, export enforcement actions initi-
ated under “Operation Exodus” have resulted
in the arrest of more that 1,600 violators and
the seizure of more than 10,000 shipments of
arms, technology, and embargoed goods
valued at more than $786 million. From
October 1985, to January 1991, “Operation
Buckstop” has been responsible for currency
and monetary instrument outbound seizures
valued at approximately $351.4 million. From
FY85 to FY90, outbound arrests for currency
violations totaled 592. In addition, Customs
has made 61 seizures of drug precursor
chemicals destined for shipment from the U.S.
along with 15 arrests. Another Customs
outbound enforcement initiative aimed at the

illegal shipment of stolen vehicles from the
US. has resulted in the recovery of 1,864
stolen vehicles valued at about $12.3 million
for FY89 and FY90. Customs outbound
enforcement actions against hazardous waste
violators has resulted in EPA penalties in
FY89 and FY90 of about $665,000.

Our export enforcement strategy has been
developed upon a three-pronged approach of
interdiction, investigation, and international
cooperation. This strategy has been imple-
mented by a force of 300 Customs Special
Agents and 135 Customs Inspectors that are
dedicated exclusively to export enforcement.
Their efforts may be augmented on a case-by-
case basis through the use of an additional
2,500 Special Agents and 5,000 Customs
Inspectors located at our 300 domestic and 20
foreign posts of duty.

The expertise developed by these Customs
officers has resulted in an increase of our
seizure-to-detention ratio from 31 percent in
1982 to 94 percent in 1990. This ratio tells us
that 94 percent of the detentions made by
Customs officers will result in seizures for
violations of U.S. export laws and regulations.
Our increased efficiency in targeting and
interdicting illegal exports has been of benefit
both to the Customs Service and the export-
ing public.

The investigative focus of the Customs Ser-
vice ranges from the referral of civil violations
to the Departments of State and Commerce to
the conduct of complex investigations which
may require undercover operations, electronic
surveillance, or source development. Many
of these investigations result in “Global
Settlements” with assessment of both civil
and criminal penalties. The Customs Service
has made a conscious effort to refer potential
civil violations to Commerce.

One of our most important initiatives in the
area of source development has been an
industry awareness program known as
“Project Gemini.” To date, Customs officers
have made public awareness presentations to
over 5,000 companies in the defense and high

Page 20

Defense Trade News, Volume 2, Number 4, October 1991



Defense Investigative Service
Industrial Security FO (S$41ME)
1333 Gateway Drive, Suite 1009
Melbourne, FL 32901-2629
Attn: Mr. Charles R. Doria
Tel: (407) 951-4412

Defense Investigative Service
Industrial Security FO (S41RL)

3659 Maguire Boulevard, Suite 100-B
Orlando, FL 32803-3726

Attn: Mr. Robert Kelly

Tel: (407) 648-6843

Defense Investigative Service
Industrial Security RA (S41FL)
One 11th Avenue, Suite E-3
Shalimar, FL 32579-1305

Attn: Mr. Charles T. Williams
Tel: (904) 651-3101

Defense Investigative Service
Industrial Security FO (S41AT)
2300 Lake Park Drive, Suite 240
Smyrna, GA 30080-7606

Attn: Mr. Ronald C. Munday
Tel: (404) 319-5924

Defense Investigative Service
Industrial Security FO (S41BX)
77) Beach Boulevard, Suite 101
Biloxi, MS 39530-4237

Attn: Mr. Darrell Crawford
Tel: (601) 435-9904

Defense Investigative Service
Industrial Security RA (S41CT)

800 Briar Creek Road, Suite EE-403
Charlotte, NC 28205-6993

Attn: Mr. William Frazier

Tel: (704) 371-6262

Defense Investigative Service
Industrial Security RA (S4ICS)
334 Meeting Street, Suite 229
Charleston, SC 29403-6417
Attn: Mr. Bobby Thomas

Tel: (803) 724-4412

DIS INVESTIGATIVE FIELD OFFICES IN THE
SOUTHEASTERN REGION HANDLING
GOVERNMENT-TO-GOVERNMENT SHIP-
MENTS

Defense Investigative Service
Investigative FO (D41NR)

P.O. Box 52289

New Orleans, LA 70152-1530

Attn: Mr. Patrick L. Dempsey (SAC)
Tel: (504) 589-6716

Defense Investigative Service
Ginvestigative FO (D41SH)
Federal Building

500 Fannin Street, Room 8B18
Shreveport, LA 71101-3084
Attn: Mr. Neville P. Darcy (SAC)
Tel: (318) 226-5563

Defense Investigative Service
Investigative RA (D41LE)

P.O. Box 609

Jacksonville, NC 28505-0609

Attn: Mr. Charles H. Jones

Tel: (919) 347-4460, (AV) 484-0550

Defense Investigative Service
Investigative RA (D41PR)

P.O. Box 34167

Fort Buchanan, PR 00934-0167
Attn: Mr. Vargas A. Arroyo
Tel: (809) 749-4439

Defense Investigative Service
Investigative RA (D41KT)
710 Locust Street, Box 111
Knoxville, TN 37902-2540
Attn: Mr. Don Garrison

Tel: (615) 549-9313

Page 14

Defense Trade News, Volume 2, Number 4, October 1991



a

Police body armor CCL 6999G
Portable moving targets systems CCL 6999G
Radiation hardened

semiconductor transistors USML XI(e)
Rifle accessories: bipods and adapters CCL 6999G
Satellite ground system tuners,

transcoders and control system ccL*

Uplink facility USML Xi)

Software data security system using DESUSML XIII(b)

Surface conditioning and scuffing disks ccLTM
Technical data (non-defense) ccL**
Telemetry analysis system CCL 4518B
Thermal imagery equipment USML Xilta)

Polyphosphazene compounds in gum form. CCLTM

Public domain software CCL 4363B.
Relay coil switch CCL 65996
Satellite insulating material USML VIG)
Software specifically designed
for military application using
government. mapping data: USML.IX(a)
Space tape recorders. USML VIIG).
Tape recordet-carrying case ccL
Telecommunication switches with AUTOVON
software USML XI(ay()
Teletype equipment specifically :
designed for military applications USML XXI(a)(1)
Undersea mapping system CCL 1510A
When exceeds following capabilities.
a) Takes measurements at an angle exceeding 10
degrees from the vertical;

'b) Measures depths exceeding 600 meters below
the water surface; and

©) Incorporates multiple beams, any of

which is.less than 2 degrees, or provide

data accuracies better than 0.5% of water

depth across swath averaged over

the individual measurements USME Xia)
within the swath. 1&2

“* A specific Export Commodity Classification Number (ECCN) was not provided by the Department of Commerce:
For the ECCN number, please file a commodity classification request with the Bureau of Export Administration (BXA),

Department of Commerce, P.O. Box 273, Washington, DC 20044.

Page 24

Defense Trade News, Volume 2, Number 4, October 1991



CDT will continue to encourage defense firms
to pursue this option, since the benefit would
appear to be significant. However, U.S. and
foreign defense firms considering this option

should recognize that the Department of State
must reserve the right to reevaluate these
approvals if the situation within a destination
country is significantly altered. #

Chile

U.S. Commercial Defense Trade

Chile Arms Embargo Lifted. On behalf of the
President, Secretary of State Baker certified on
December 1, 1990, that the conditions set forth
in section 726(b) of the International Security
and Development Cooperation Act of 1981, as
amended, had been met. This action lifted the
Kennedy-Harkin prohibitions on security
assistance and arms sales to Chile which had
been in effect since 1976.

Asa result, Chile is no longer subject toa
statutory arms embargo and has been ap-
proved for removal from the list of prohibited
destinations in section 126.1 of the Interna-
tional Traffic in Arms Regulations (ITAR).
Since this policy went into effect on July 12,
1991, the Office of Defense Trade Controls
(DTC) has accepted license applications for
U.S. Munitions List (USML) exports to the
Government of Chile on a case-by-case basis.

The lifting of the U.S. ban on security assis-
tance and arms transfers to Chile was made
possible by Chile’s successful transition to
civilian democracy after 16 years of military
tule. This long-awaited change permits Chile
to enter into defense cooperation arrange-
ments on a case-by-case basis.

With the resumption of security assistance, a
Security Assistance Office has been estab-
lished at the U.S. Embassy in Santiago. The
Administration has requested $1 million in
Foreign Military Financing (FMF) for FY 1992.
FMF would sustain existing equipment and
would provide an opportunity to strengthen
defense ties between the United States and
Chile.

Through June 1991, commercial deliveries
reached over $52 thousand compared to
government-to-government deliveries of over
$87 thousand.

Future Trade. Chile will be looking to up-
grade its aging defense systems, focusing on
modernization and technological advances.
The Chileans will probably seek to improve
their existing aircraft, electronics, and helicop-
ters.

A stable increase in U.S. commercial sales is
expected due to Chile’s strong economy and
its open market system. Licenses to Chilé will
continue to be reviewed to avoid any destabi-
lizing transfers to the region.

Defense Trade News, Volume 2, Number 4, October 1991

Page 5



technology industries. The investigative
leads provided by “Gemini Contacts” have
resulted in a number of significant seizures
and arrests. The Customs Service works hard
at developing tips.

As part of the U.S. export control community,
the Customs Service maintains strong links
with the licensing agencies, the Department
of Defense, other federal enforcement agen-
cies, and the intelligence community. Our
“Exodus Command Center” has direct links
to both State and Commerce and is able to
supply our field officers with both licensing
and lookout information.

The Customs Service maintains intelligence
units both at headquarters and in field offices
for the purpose of receiving, analyzing, and
disseminating information obtained from the
intelligence community. Intelligence informa-
tion, information received from other law
enforcement agencies, and Department of
Defense technical assessments provide part of
the basis for our interdiction profiles. Suc-
cessful interdiction techniques depend upon
both strategic and tactical information.

Recently, we have expanded our cooperation
with the Department of State to include the
posting of a full-time Customs Agent at the
Office of Defense Trade Controls to act as a
Special Coordinator for Law Enforcement. It
is the intent of the Customs Service to assist
the Department of State in screening export
license applications for law enforcement
concerns. Our cooperative efforts have also
included a monthly exchange of case informa-
tion with the Department of Commerce.

Ever mindful of the fact that successful export
enforcement requires foreign cooperation, the
Customs Service has made export enforce-
ment a priority for its foreign offices. The
spirit of cooperation engendered by these
foreign offices and our participation in
COCOM has made the difference in a number
of successful investigations.

As acknowledged experts in the field of
export enforcement, Customs officers are
often requested to provide training to foreign

governments. Of particular note in this area
has been our participation in recent export
training programs in Eastern Europe. Hope-
fully, these training programs will enable
these newly risen democracies to develop
their own export control regimes.

On 4/18/91, the Customs Service offered
testimony on two investigations relating to
the illegal export of U.S.-sourced items to
countries in the Middle East. I believe that
this testimony has provided the committee
with excellent examples of investigations that
mirror our current enforcement efforts involv-
ing the Middle East.

Our experience indicates that, although the
commodities, countries, and routes of diver-
sion may change, the basic methods of opera-
tion used by violators have not. In the
ALCOLAC International and Abdelkar
Helmy Investigations, we have provided
examples of violators attempting to acquire
controlled chemicals and missile technology
for illegal export to destinations in the Middle
East.

Ican assure you that investigations relating to
the illegal export of chemical/biological
warfare agents and missile technology to the
Middle East continue to be a matter of top
priority for the Customs Service.

As part of my testimony today, I would also
like to provide the Committee with short
profiles of two additional investigations.
These profiles provide examples of investiga-
tive activity from case initiation to conclusion
and are representative examples of the type of
investigations currently being conducted by
the Customs Service.

The first case involves the Provisional Irish
Republican Army (PIRA) attempts to procure
a Stinger missile, C-4 plastic explosives, and a
number of .50 caliber sniper rifles that would
be smuggled from the U.S. into Northern
Ireland for use by the PIRA against British
forces there. The chart provided to you
graphically [not available} depicts this case
from start to finish. As you can see from the

Defense Trade News, Volume 2, Number 4, October 1991

Page 21



BLOCK 19 OF FORM DSP-85

What is a “cognizant DIS security office” as
required in Block 19 of the Form DSP-85,
Application/License for Permanent/Tempo-
rary Export or Temporary Import of Classi-
fied Defense Articles and Related Classified
Technical Data? The cognizant Defense
Investigative Service (DIS) security office is
the DIS element which has oversight of the
security program of a cleared facility (one
which has met all requirements to perform
classified work on government contracts).
Generally, the cognizant DIS security office is
the DIS element geographically located
nearest the facility producing the classified
article or classified technical data. (See the
article “Industrial Security” on page 8 for a
complete overview of DIS.)

What is the easiest way to find out which
office to list on the Form DSP-85? There are
two possible methods. The most direct
channel is to go through your company
personnel. Talk to your company security
manager or industrial security manager and
ask which DIS element oversees the DIS
clearance program at that facility. Also, ask
your security personnel to provide you with
the current name and address as required in
Block 19.

Another method is to check the DIS listings
found on pages 10 through 17 and to locate
the Industrial Security Field Office (FO)
closest to the facility producing the classified
article or classified technical data. Contact
that office and ask if it is the DIS office with
oversight of the facility. Confirm the correct
name and address as required in Block 19.

FORM DSP-83, NONTRANSFER AND
USE CERTIFICATE

When is a DSP-83 required? The Interna-
tional Traffic in Arms Regulations (ITAR)
require that a Form DSP-83 accompany
license applications in three specific instances:

© § 123.10 and § 123.22(e)(4) require that a
Form DSP-83 accompany any license applica-
tion for significant military equipment (SME)
as defined in § 120.19.

© § 124.11 requires that a Form DSP-83
accompany agreements involving the manu-
facture or transfer of significant military
equipment (SME) or transfer of classified
articles or technical data.

* § 125.8 requires that the Form DSP-83
accompany any Form DSP-85 application to
export classified technical data or classified
defense articles.

The Office of Defense Trade Controls (DTC)
may also require that the appropriate author-
ity of the government of a country execute a
Form DSP-83 to export a defense article or
defense service to a non-governmental for-
eign end-user [§123.10 (d)].

For a Form DSP-5 application, the Form DSP-
83 must be duly executed by the foreign
consignee and foreign end-user {123.10(a)].
For an agreement, the Form DSP-83 must be
duly executed by the foreign party to the
agreement or foreign end-user who is the
recipient of the articles being produced or
warehoused. For a Form DSP-85 application,
the Form DSP-83 must be duly executed by
the foreign consignee, end-user, and an
authorized representative of the foreign
government [§ 125.3(a)]. DTC may also
require that the appropriate authority of the
government of a country execute a Form DSP-
83 to export a defense article or defense
service to a non-governmental foreign end-
user [§123.10 (d)].

Defense Trade News, Volume 2, Number 4, October 1991

Page 27



Commodity Jurisdiction
Determinations

The following chart provides selected Commodity
Jurisdiction (CJ) determinations. The commodity de-
scriptions are intentionally general to ensure the confi-
dentiality of all proprietary information related to indi-
vidual cases. These determinations apply only to the

specific commodity reviewed in the CJ process. If you believe one of your products is similar to

one of those listed as having been placed on the Department of Commerce’s Commodity Control
List (CCL), please submit a CJ request letter (ITAR 120.5). Please refer to the article “A Checklist
for Preparing CJ Requests” published in the September 1990 edition of Defense Trade News for

assistance in submitting your request.

COMMODITY JURISDICTION

Accelerometers for safe-and-arm devices USML IV/TI

Automatic telephone exchange system ccL**

With special features USML XIta)(1)
Automotive air bag ignitors CCL 6499G
Cable TV converter CCL 15274

Ceramic abrasive grains for grinding machines CCL **

Commercial Global
Positioning System
Components for an observation system

used in a remotely piloted vehicle | USML VIIIG)
Desktop software security program

[non-DES file encryption capability} CCL **

CCL 1501A

Emergency air cylinder CCL 6499G
Fire Fighter Trainer ccL**
Global Positioning System receivers ccL*
Software codes for the GPS USML XI(e)
Local Area Network
computer encryption software CCL GTDR
Modified RADAR system CCL 1501A

Network application interface softwareCCL Sup 3, 779
Old Navy utility boat CCL 6499

COMMODITY JURISDICTION
Access/authentication software CCLGTDR
Automatic Test System USML XI(e)

Avionics Vertical Speed Indicators (VSI), power
analyzers and recorders,and airstream direction
sensing units ccL**

Cathode Ray Tubes ccL

Ceramic inserts for protection
against armor piercing ammunition | USML X(a)

Commercial light aircraft Kit ccL**
CREME computer code CCLGTDR
Electric initiating pyrotechnic device CCL 6499G
Explosive initiating device USML IV(h)
Fuel additives ccL**
Laser aiming device CCL 6599G
Metal matrix composites CCL 6699G
When designed for military USML XIII(d)
applications
Motorized river assault barge
and pontoon bridge USML Vita)
Night Vision thermal sight USML XII)
Parts designed for Navy ships USML VI(b)

Defense Trade News, Volume 2, Number 4, October 1991

Page 23



a

COCOM Update

Revision of the International Munitions List

The last comprehensive revision in the Coor-
dinating Committee on Multilateral Export
Controls (COCOM) of the International
Munitions List (IML) took place in May 1989
and was implemented in October 1989.
COCOM is once again scheduled to review
the IML beginning in 1992. The current
COCOM calendar calls for member govern-
ments to submit IML proposals by October
14, 1991, and counterproposals by December
16, 1991,

Although the dual-use list has been revised
extensively due to the dramatic political
transformations that have taken place in
Central and Eastern Europe since 1989, major
liberalization of the items and technologies
controlled on the IML is not likely.

Industry, through its experts on industry-
government Technical Advisory Committees
(TACs), which are authorized by the Export
Administration Act (EAA), has been invited
for the first time to participate in the technical
review of the IML. #

Page 18

Defense Trade News, Volume 2, Number 4, October 1991



DIS FIELD OFFICE LISTING Defense Investigative Service

Industrial Si ity FO (S11MU)
Since this information is subject to change, it industrial Security

is advisable to call the office and verify the Valley Office Park
information prior to submitting the Form 13 Branch Street

DSP-85. The listing presents offices alphabeti- Methuen, MA 01844-1947
cally by city and state within each region. Attn: Mr. Steve Harris

NEW ENGLAND REGION

Defense Investigative Service
Industrial Security FO ($11HF)
130 Darlin Street

East Hartford, CT 06108-3234
Attn: Mr. Joseph Salisbury
Tel: (203) 291-7995

Defense Investigative Service
Industrial Security RA (S11GT)
P.O. Box 908

Groton, CT 06349-0908

Attn: Mr. Stephen Joyce

Tel: (203) 445-2403

Defense Investigative Service
Industrial Security RA (S$11NH)
P.O. Box 401

New Haven, CT 06502-0401
Attn: Mr. George B. Randall
Tel: (203) 773-2383

Defense Investigative Service
Industrial Security FO (S11BN)
495 Summer Street

Boston, MA 02210-2192

Attn: Mr. Bart Cawley

Tel: (617) 451-4927

Defense Investigative Service
Industrial Security FO (S11NM)
495 Summer Street

Boston, MA 02210-2192

Attn: Mr. Michael Boccuzzi
Tel: (617) 451-4920

Tel: (508) 686-2202 04/15/1991

Defense Investigative Service
Industrial Carried FO (S11WL)
424 Trapelo Road, Building 128N
Waltham, MA 02154-6399

Attn: Mr. Gerry Zarrow

Tel: (617) 647-8431

Defense Investigative Service
Industrial Security RA (S11BH)
U.S. Federal Building

15 Henry Street, Room M-102
Binghamton, NY 13901-2723
Attn: Ms. Linda Mueller

Tel: (607) 773-2775

Defense Investigative Service
Industrial Security RA (S11BF)
Williamsville Branch

P.O. Box 428

Buffalo, NY 14231-0428

Attn: Mr. Robert P. Simpson
Tel: (716) 846-5376

Defense Investigative Service
Industrial Security FO (S11SY)
Hancock Complex

510 Stewart Drive, West

North Syracuse, NY 13212-3414
Attn: Mr. John Dennehy

Tel: (315) 458-9554

Defense Investigative Service
Industrial Security RA (S11RH)
P.O. Box 14120, Federal Station
Rochester, NY 14614-0120
Attn: Mr. Jack Howe

Tel: (716) 263-6423

Page 10

Defense Trade News, Volume 2, Number 4, October 1991





as

Commodity Jurisdiction Procedures

How to Prepare Requests on Specialized Items

The Center for Defense Trade’s (CDT's)
Commodity Jurisdiction (CJ) Team maintains
daily contact with industry, responding to
specific issues and situations. For this article,
the Team has compiled some useful instruc-
tions for preparing CJ requests for several
specialized items. For more general informa-
tion, read the series of CJ articles featured in
the March, June, and September 1990 issues of
Defense Trade News.

We will provide additional item-specific
material as necessary to keep the CJ process a
smooth and rapid one. Please incorporate
these procedures in your company’s CJ
reference library. Providing the information
requested below will ensure the most timely
processing of cases possible.

CJs for Thermal, Night Vision, or Multi-
Spectral Imaging Devices. When submitting
a CJ request for these devices, please answer
these questions in the body of your letter.

1. Does the device use image intensifiers? If
so, what generation (1, II, or III)?

2. Is the detector a single element?

3. Is ita Charged Coupler Device (CCD) or
an integrated-while-scan device?

4. Is the detector cooled? If so, what method
(i.e., Jules Thompson, Dewar Vessel, etc.)?

5. Is the equipment ruggedized? If so, how?

6. What is the resolution in terms of resolv-
able elements?

7, What is the temperature sensitivity or
Noise Equivalent Temperature Difference
(NETD)?

Encryption Software and the CJ Process. CDT
invites manufacturers of encryption software
to contact the CJ Team early in a product’s
development, even in the design stage. Early
contact may allow exporters to develop a
product with fewer export restrictions. The

following information describes the existing
procedures and offers additional avenues for
both software developers and software
exporters.

In the interagency review process, the techni-
cal agencies routinely evaluate all software
codes when rendering their recommendation
to the Department of State. You can assist the
technical personnel in quickly identifying
areas of concern.

CJs for Encryption Software. When submit-
ting a C] request for these devices, please
include the following in the body of your
letter.

1, State whether or not your product uses the
Data Encryption Standard (DES) in either the
software source or object codes.

2. If desired, request that we provide the
jurisdiction of each code individually.

3. Describe what function the software
performs.

4. Describe the expected end-user.
5. Describe how the software works.

6. Clearly identify the systems in which the
software will be used.

7. Request clarification concerning any
unclear issue.

8. Provide copies of all CJ correspondence to
any company which may export your prod-
uct.

Procedures for Software Exporters. Before
exporting any encryption software, determine
if the product uses DES. Also ask the devel-
opment company if it has already obtained a
CJ determination from the Department of
State. If so, ask the developer to provide you
with either a copy of the CJ or the CJ case
number. Using the CJ case number, you can
verify the CJ ruling with a simple phone call.
If the developer has not obtained such a
ruling, obtain one before export. Follow the

Defense Trade News, Volume 2, Number 4, October 1991

Page 7



Enforcement

Sanctions Imposed for Illegal Transfers to Iran

On September 4, 1991, a 22-count indictment
was returned by a grand jury in the U.S.
District Court, District of Columbia, charging
Japan Aviation Electronics Industry, Inc.
(AE), Aero Systems, Inc., of Miami, and its
subsidiaries, Aero Systems Aviation Corp.,
Hierax Company, Ltd., and Aero Systems
PTE, Ltd., and five employees of the firms,
with conspiracy and the illegal transfer of
US.- designed navigation components to Iran
in violation of the Arms Export Control Act
(AECA) (22 U.S.C. 2778) and the implement-
ing International Traffic in Arms Regulations
(ITAR) (22 CFR parts 120-130).

The indictment alleges that the defendants
conspired to violate the retransfer provisions
of the ITAR, and violated such provisions, by
transferring, or causing to be transferred, to
Iran from 1984-1987 parts for the LN-12D
inertial navigation systems installed in Ira-
nian F-4 aircraft, without the prior written
approval of the Department of State.

Pursuant to its authority under the AECA and
the ITAR, on September 10, 1991, the Depart-
ment of State imposed administrative sanc-

tions by suspending all existing licenses and
other approvals that authorize the export or
transfer by, for, or to JAE and Aero Systems,
Inc., and their subsidiaries and associated
companies, of defense articles and services.
In addition, the Department stated that its
policy shall be to deny all export license
applications and other requests for approval
directly or indirectly involving the above
cited entities.

Exceptions may be made to this policy ona
case-by-case basis at the discretion of the
Office of Defense Trade Controls (DTC).

This action was taken pursuant to sections 38
and 42 of the AECA (22 U.S.C. 2778 and 2791)
and sections 126.7 (a) (1) and (2) of the ITAR
(22 CER. 126.7 (a) (1) and (2)). The suspen-
sion will remain in force until further notice.

The suspension was published in the Federal
Register (Volume 56, Number 179, Monday,
September 16, 1991, page 46818) under Public
Notice 1482. #

Page 6

Defense Trade News, Volume 2, Number 4, October 1991



DEPARTMENTS

Statement by Commissioner of
Customs

The following is testimony by Carol Hallett,
Commissioner of Customs, before the House
Ways and Means Subcommittee on Oversight,
May 1, 1991.

Mr. Chairman, I am pleased to appear before
you and your subcommittee today to discuss
the roles and goals of the U.S. Customs
Service in enforcing U.S. export control laws.
The Customs Service has worked long and
hard to develop an export enforcement
program that is capable of responding to the
law enforcement, foreign policy and national
security interests of the United States.

Under the project name, “Operation Exodus,”
the Customs Service has developed this
program to the point where it has become a
world model in the field of export enforce-
ment. Today, I would like to share some
insights gained from our experience in export
enforcement that may serve as reference
points for your analysis of the U.S. export
control system, particularly as it applies to the
Middle East.

The Customs Service has been in the business
of export enforcement since 1789. As the
principal U.S. border enforcement agency, the
Customs Service has long faced the daunting
challenge of enforcing both the import and
export control laws of the United States while
at the same time serving to facilitate the
movement of goods and people. In meeting
this challenge, Customs officers have well
earned the title “Protectors of Independence,”

The Operation Exodus Program was devel-
oped in 1981 as a response to the national
security challenge of stemming the flow of the
illegal export of U.S.-sourced arms and tech-
nology to the Soviet bloc and other prohibited
destinations. The fall of the Berlin wall
caused many foreign policy, national security,
and law enforcement analysts to call for both
relaxation of U.S. export restrictions and a
reduction in U.S. export enforcement efforts.

The Customs Service weighed these calls for
reduced export enforcement against the law
enforcement concerns dictated by ever chang-
ing U.S. foreign policy and national security
interests and chose to maintain an aggressive
enforcement posture. For our experience told
us that the next Iran, Nicaragua, or Panama
may not be far off.

This decision has proven wise in light of the
events of August 2, 1990. The countries and
commodities may change; but as long as the
USS. Government maintains the goals of
promoting world peace, protecting national
security, and promulgating foreign policy,
there will be a continued need for aggressive
export enforcement.

In discussing the role of the Customs Service
in the U.S. export control system, I first want
to make it clear that we do not serve as an
export licensing agency. This role is reserved
for the Department of Commerce, the Depart-
ment of State, the Department of the
Treasury's Office of Foreign Assets Control, .
and other U.S. export licensing agencies.

The role of the Customs Service is to enforce
the regulations set forth by these agencies
under statutes such as the Export Administra-
tion Act, the Arms Export Control Act, and
the International Emergency Economic
Powers Act. Within the Customs Service, we
fee} that the separation between our enforce-
ment function and the licensing functions of
State and Commerce creates a healthy system
of checks and balances.

Defense Trade News, Volume 2, Number 4, October 1991

Page 19



el

OISI also conducts inspections of cleared
contractor operations on U.S. installations
outside the United States when authorized by
the Deputy Director, Industrial Security,
Headquarters DIS. OISI also assists U.S.
industry by:

« Arranging classified visits for U.S.
contractor employees;

Providing storage for classified material;

* Providing mail channels for transmis-
sion of classified material between a contrac-
tor in the United States and an approved
destination outside the United States;

Providing security briefings and secu-
rity certificates, as appropriate; and

¢ Assisting with security matters, such as
visits to military activities or contractors
outside the United States.

With offices in Brussels, Belgium, and
Mannheim, Germany, OISI-Europe provides
assistance to both DOD and U.S. industry in
Europe and adjacent areas. OISI-Far East, in
Yokohama, Japan, performs the same func-
tions for the Western Pacific region.

DIS’s International Programs Branch (located
at DIS Headquarters, 1900 Half Street, Wash-
ington, D.C.) works in conjunction with OISI
in many respects. The International Programs
Branch administers all policies formulated by
the Secretary of Defense on international
aspects of the Defense Industrial Security
Program. Responsibilities handled by the
International Security Programs Branch are:

* Liaison with officials of foreign embas-
sies regarding mutual security issues;

* Verification of the facility security
clearances of U.S. firms for foreign govern-
ments;

* Corresponding verification of foreign
firms’ security clearance status for U.S. inter-
ests;

* Monitoring of classified contracts/
subcontracts awarded to foreign corporations,
and foreign classified contracts awarded to

USS. corporations to ensure that proper
safeguarding procedures are instituted in
accordance with bilateral agreements; and

Direct commercial arrangements for the
export of classified defense articles or infor-
mation require U.S. Government approval
before a contractor commits to such arrange-
ments with a foreign interest. The U.S.
Government's decision on the application will
be contingent, in part, upon the foreign
government's having entered into a General
Security Agreement, an equivalent legally
binding security agreement with the U.S.
Government, or a “program specific” govern-
ment-to-government arrangement. Once the
contractor has gone through the export
licensing process, the U.S. portion of the
government-to-government shipment is
fulfilled by an Industrial Security Representa-
tive from the cognizant DIS Field Office (FO),
unless performed by an “in-house” govern-
ment representative.

DIS and the Form DSP-85. A number of
Office of Defense Trade Controls (DTC)
registrants submit Form DSP-85, Applica-
tion/ License for Permanent/Temporary
Export or Temporary Import of Classified
Defense Articles and Related Technical Data.
To complete the Form DSP-85, Block 19 (name
and address of cognizant DIS security office),
registrants need to know current information
about the cognizant DIS security office. Since
the DIS Field Offices (FOs) are now the
cognizant DIS security offices for cleared
contracting facilities, DIS has composed a list
which includes the current address, telephone
number, and point of contact of each indus-
trial security FO for reference. Please note
that Field Offices are abbreviated “FO” in
these listings. In addition, the reference list
contains information on the DIS investigative
FO/resident agents (RAs) performing govern-
ment-to-government functions and the Of-
fices of Industrial Security International in
Europe and the Far East.

Defense Trade News, Volume 2, Number 4, October 1991

Page 9



eT

Personne! Updates

Focus on the Office of Defense Trade
Policy

The Center for Defense Trade (CDT) has
undergone dramatic changes since its incep-
tion in January 1990. During the first year,
the major changes took place in the Office of
Defense Trade Controls (DTC). DTC com-
pleted its expansion in both personnel and
floor space in early 1991.

More recently, the major changes have taken
place in the Office of Defense Trade Policy
(DTP). Since June, five people have arrived as
the office mission has expanded. Below are
profiles of all recent DTP personnel.

Pamela L. Frazier began her new assignment
as Director in September. Since she joined the
Department of State in 1974, Ms. Frazier has
held a variety of positions, primarily in
technology transfer and international scien-
tific affairs. In 1986, she was Deputy Director
of the National Security Council Staff han-
dling technology transfer. In January 1990,
Ms. Frazier joined the newly formed Center
for Defense Trade as Deputy Director. In her
position as Director of DTP, Ms. Frazier is
responsible for setting overall policy guide-
lines for commercial defense trade.

W. Scott Miller, Deputy Director, served as
Acting Director from March through Septem-
ber. He has served as Deputy since his arrival
in the Center for Defense Trade in January
1990. He has recently departed for the Special
Operations Command in Tampa, Florida,
where he will be Political Adviser. Mr. Miller
has several years’ experience in strategic and
political-military affairs, national security,
foreign policy, and arms control issues,
having served in both the private sector and
in the Federal Government working with the
national security community.

Brian I. McCleary, Acting Deputy Director,
joined DTP in June as Trade Adviser. He
previously served as Executive Assistant to

the Under Secretary of Commerce for Export
Administration; as Policy Coordination
Officer in the Department of State’s Office of
Security Assistance and Sales, Bureau of
Politico-Military Affairs; and Foreign Affairs
Officer in the U.S. Arms Control and Disar-
mament Agency’s Arms Transfer Division,
Nuclear and Weapons Control Bureau. Mr.
McCleary holds a B.A. in international affairs
and economics from George Washington
University and an M.A. in national security
studies from Georgetown University.

Robert A. Mosher arrived in July as the
analyst for Eastern Europe and the Soviet
Union. A career Foreign Service Officer, he
has served in Vietnam, Northern Ireland, and
Zaire. Other Washington assignments in-
clude the Office of Regional Political-Military
Affairs, and Country Officer for Albania,
Bulgaria, and Yugoslavia in the Bureau of
European Affairs; the Office of Soviet and
East European Analysis in the Bureau of
Intelligence and Research; and Country
Director for the United Kingdom, Ireland and
Portugal in the Office of the Secretary of
Defense. Mr. Mosher is a graduate of the
Naval War College’s Naval Command and
Staff College.

Roger Swenson joined DTP as a Politico-
Military Affairs Officer in July. A Foreign
Service Officer with experience in China,
Taiwan, Hong Kong, and Latin America, he
has served in Washington as China Desk
Politico-Military Officer, as Strategic Trade
Control Analyst in the Bureau of Intelligence
and Research, and as Trade Analyst in the
Defense Department's Office of International
Economic and Energy Affairs.

Arnold Horowitz came to DTP in March
1990. A career Foreign Service Officer, he
handles matters pertaining to supercomputer
licensing, foreign investments in the United
States, and East Asian defense markets. In his
Foreign Service career, he has specialized in

Defense Trade News, Volume 2, Number 4, October 1991

Page 25



United States Department of State ° Bureau of Politico-Military Affairs

Defense Trade News

The Bulletin of the Center for Defense Trade

Volume 2, Number 4 a October

Features

Estonia, Latvia, and Lithuania
Diplomatic Relations

Enhancing U.S. Trade Competitiveness
CDT Will Review Lists of Prospective Reexports

Chile
U.S. Commercial Defense Trade

Enforcement
Sanctions Imposed for Illegal Tranfers to Iran

Commodity Jurisdiction Procedures
How to Prepare Requests on Specialized ltems

Industrial Security
Role of the Defense Investigative Service in Exporting

O'O IN O11 | lo

COCOM Update 1

Revision of the International Munitions List

Departments

U.S. Customs at DTC 19
Statement by Commissioner of Customs

Commodity Jurisdiction Determinations 23
Personnel Updates 25
Tips and Tidbits 27

Written and Edited by the Center for Defense Trade


CAPITOL REGION

Defense Investigative Service
Industrial Security FO (S15BV)
1000 Aerospace Road.

Lanham, MD 20706-2217

Attn: Mr. Kent Davis

Tel: (301) 436-1002, (AV) 296-1002

Defense Investigative Service
Industrial Security FO (SISBA)
Arundel Corporate Center, Suite 440
110 West Road

Towson, MD 21204-2316

Attn: Mr. Philip L. Lamphear

Tel: (301) 296-6344

Defense Investigative Service
Industrial Security FO (SISWP)
11160 Veirs Mill Road, Suite 515
Wheaton, MD 20902-2538

Attn: Ms. Dorothy Borsi

Tel: (301) 427-5587, (AV) 291-5587

Defense Investigative Service
Industrial Security FO (SISDC)
Hoffman Building II

200 Stovall Street, Room 7N65
Alexandria, VA 22332-1700

Attn: Mr. Thomas Raver

Tel: (703) 325-6765, (AV) 221-6765

Defense Investigative Service
Industrial Security FO (SISKS)

290 Stovall Street, Room 7N65
Hoffman Building II

Alexandria, VA 22332-1700

Attn: Ms. Martha F. Hampton
Tel: (703) 325-9295, (AV) 221-9295

Defense Investigative Service
Industrial Security FO (SISAD)

7010 Little River Turnpike, Suite 310
Annandale, VA 22003-0308

Attn: Mr. Alford E. Eslinger

Tel: (703) 756-2518, (AV) 289-2518

Defense Investigative Service
Industrial Security FO (S15AR)

1815 North Fort Myer Drive, Suite 510
Arlington, VA 22209-1805

Attn: Mr. Joseph Evancho

Tel: (703) 696-5308, (AV) 226-5308

Defense Investigative Service

Industrial Security FO (SI5HP)

1055 West Mercury Boulevard, Suite 410
Hampton, VA 23666-3308

Attn: Mr. Tim R. Sartin

Tel: (804) 827-9298

Defense Investigative Service
Industrial Security FO (SISDS)
12355 Sunrise Valley, Suite 170
Reston, VA 22091-3415

Attn: Mr. Stephen Hampton

Tel: (703) 487-8096, (AV) 221-8096

MID-WESTERN REGION

Defense Investigative Service
Industrial Security FO (S32CH)
10700 West Higgins Road, Suite 104
Rosemont, IL 60018-3707

Attn: Mr. James A. Brandt

Tel: (708) 299-2500

Defense Investigative Service
Industrial Security RA (S32IN)

P.O. Box 16009

Ft. Benjamin Harrison, IN 46216-0009
Attn: Mr. Michael Dockery

Tel: (317) 542-208, (AV) 699-2008

Page 12

Defense Trade News, Volume 2, Number 4, October 1997



el

Defense Investigative Service
Industrial Security RA (S11AY)
P.O. Box 2124

Scotia, NY 12302-0124

Attn: Mt. Arthur W. Spencer
Tel: (518) 377-8817

Defense Investigative Service
Industrial Security RA (S11NP)
Naval Education & Training Center
Building 1121

Newport, RI 02841-5019

Attn: Mr. Edward Houle

Tel: (401) 841-3146

MID-ATLANTIC REGION

Defense Investigative Service
Industrial Security FO (SI4WN)
P.O. Box 730

Cookstown, NJ 08511-0279

Attn: Mr. James J. McGinty

Tel: (609) 723-2103, (AV) 440-3640

Defense Investigative Service
Industrial Security FO (SI4NK)
Military Park Building, Rm 803

60 Park Place

Newark, NJ 07102-5504

Attn: Ms. Mary Lou Van Winegarden
Tel: (201) 645-6123

Defense Investigative Service
Industrial Security RA (SI4PY)
P.O. Box 563

Wharton, NJ 07885-9998

Attn: Mr. Louis Kiss

Tel: (201) 724-7189, (AV) 880-7189

Defense Investigative Service
Industrial Security FO ($14L1)
120 Mineola Boulevard, Suite 430
Mineola, NY 11501-4077

Attn: Mr. Donald E. Dwyer

Tel: (516) 747-1427

Defense Investigative Service
Industrial Security FO (SINY)

6 World Trade Center, Room 439
New York, NY 10048-0946

Attn: Mr. John J. Carey

Tel: (212) 466-3965

Defense Investigative Service
Industrial Security FO (S14HR)
P.O. Box 11788

Harrisburg, PA 17108-1788
Attn: Mr. Michael J. Leonard
Tel: (717) 782-2295

Defense Investigative Service
Industrial Security RA (SI4NS)
P.O. Box 206

Norristown, PA 19404-0857
Attn: Mr. Michael J. Pilla

Tel: (215) 279-4982

Defense Investigative Service
Industrial Security FO (Sl4PP)
Scott Plaza II

Route 291, Room 445
Philadelphia, PA 19113-1504
Attn: David G. Joseph

Tel: (215) 521-3726

Defense Investigative Service
Industrial Security RA (SI4PT)
Federal Building, Room 726

1000 Liberty Avenue

Pittsburgh, PA 15222-4004

Attn: Mr. Richard C. Noe

Tel: (412) 644-5960, (AV) 242-5960

Defense Investigative Service
Industrial Security RA (SI4ST)
P.O. Box 646

State College, PA 16804-0646
Attn: Mr. Harold R. Kurtz
Tel: (814) 237-5234

Defense Trade News, Volume 2, Number 4, October 1991

Page 11



DEFENSE TRADE NEWS
United States Department of State
Washington, D.C. 20522-0602

OFFICIAL BUSINESS.
PENALTY FOR PRIVATE USE $300

Address Correction Requested

BULK RATE
POSTAGE & FEES PAID
U.S, Department of State
Permit No, G-130

SMON SPRL BSUajaq d}e1S Jo UswJedag “S'N

L66L 42q0190

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A ae

CONTACTING THE CENTER FOR DEFENSE TRADE (CDT)

Director, Center for Defense Trade
PM, Room 7321

Bureau of Politico-Military Affairs
USS. Department of State
Washington, D.C. 20520-7321

(202) 647-6977
Office of Defense Trade Controls (DTC) Office of Defense Trade Policy (DTP)
Postal Mailing Address
PM/DTC, SA-6, Room 200 PM/DTP, Room 7815
Office of Defense Trade Controls Office of Defense Trade Policy
Bureau of Politico-Military Affairs Bureau of Politico-Military Affairs
US. Department of State U.S. Department of State
Washington, D.C. 20522-0602 Washington, D.C. 20520-7815

Express Mail and Courier Delivery Address

PM/DTC, Room 200 PM/DITP, Room 7815

Office of Defense Trade Controls Office of Defense Trade Policy
Bureau of Politico-Military Affairs Bureau of Politico-Military Affairs
USS. Department of State U.S. Department of State

1701 N. Fort Myer Drive Washington, D.C. 20520-7815

Arlington, VA 22209-3113
Telephone Numbers

General Information: (703) 875-6644 General Information: (202) 647-4231
Licensing: (703) 875-6644 #3
Registration /Compliance: (703) 875-6650
Office Director and Deputies: (703) 875-7050
Defense Trade News: (703) 875-5660
Congressional Cases: (703) 875-6641
Commodity Jurisdictions: (703) 875-7041/5655
License Status Staff: (703) 875-6652
Automated License Status Systems:

ALISS (Telephonic): (703) 875-7374

ROBB (Electronic): (703) 875-6650

Facsimile Numbers

Licensing / Management/ Forms: (703) 875-6647 PM/DITP: (202) 647-1346
Registration/Compliance/ROBB: (703) 875-5663

Department of State Publication 9783
Bureau of Politico-Military Affairs
Revised October 1991


general outline in the September 1990 Defense
Trade News article, “A Checklist for Preparing
C] Requests.” Include the additional infor-
mation listed in the above paragraph, “CJs for
Encryption Software.”

Call the CJ Team Before Preparing a Re-
quest. DTC encourages all individuals or
companies to contact the CJ Team before
preparing a CJ request. Such consultation can
greatly speed the process. Call Majors Mike
Van Atta and Gary Oncale at (703) 875-7041/
5655, respectively. #

Industrial Security

Role of the Defense Investigative Service in Exporting

On January 1, 1971, the Secretary of Defense
established the Defense Investigative Service
(DIS) by merging the personnel security
investigative elements of the Army, Navy and
Air Force. His memorandum assigned DIS
the responsibility for the Department of
Defense (DOD) Personnel Security Investiga-
tive Program within the United States. On
October 1, 1980, the Deputy Secretary of
Defense instructed DIS to administer three
additional security programs. The new
programs, shifted from the Defense Logistics
Agency (DLA) to DIS, were the Defense
Industrial Security Program (DISP), the Key
Asset Protection Program (KAPP), and the
DOD Sensitive Arms, Ammunition, and
Explosives Security Program (AA&E).

Today, DIS is a separate DOD agency under
the direction, authority, and control of the
Assistant Secretary of Defense for Command,
Control, Communications, and Intelligence.
DIS is chartered as a national security, per-
sonnel security, investigative security, and
industrial security agency.

In its industrial security role, DIS administers
three industrial security programs on behalf
of DOD and 21 other non-DOD Federal
executive agencies. The purpose of the DOD
Key Asset Protection Program (KAPP) is to
ensure that, in the event of a national emer-
gency, the United States would have emer-
gency mobilization preparedness capability.
The objective of the Arms, Ammunition, and

Explosive Program (AA&E) is to ensure the
protection of sensitive (attractive to terrorist
or criminal elements), conventional (non-
nuclear) arms, ammunition, and explosives in
the custody of or being produced by defense
contractors.

The Defense Industrial Security Program
(DISP) is the most comprehensive of the three
industrial programs administered by the
agency. The primary objective of the DISP is
to ensure that industry properly safeguards
classified information in its possession while
performing on government contracts or
engaging in research and development.
Nearly 90 percent of all classified information
originates within the industrial environment.
The U.S. Government sets requirements for
the protection of classified information, and
industry implements these requirements
through the advice, assistance and monitor-
ship of eight regional offices, 88 industrial
field elements, and the Defense Industrial
Security Clearance Office.

DIS also has established two Offices of Indus-
trial Security International (OISI) to provide
administrative assistance to U.S. industry in
its activities outside the United States. OISI
acts as a resource for information pertaining
to security clearances and security assurances
for cleared U.S. contractor employees located
outside the United States. Such information is
available for official use by agencies and
activities of the U.S. Government, foreign
governments, NATO, and U.S. contractors.

Page 8

Defense Trade News, Volume 2, Number 4, October 1991



chart, Customs and ATF [Alcohol, Tobacco, and
Firearms] Special Agents acted in an under-
cover capacity to monitor the acquisition
efforts of three Irish Nationals and one Cana-
dian National in violation of several US.
export and money laundering statutes. This
case was the result of a joint investigation by
the FBI, Bureau of Alcohol, Tobacco, and
Firearms and Customs and serves as an
illustration of interagency cooperation.

The second case I would like to discuss
involves the attempts by three violators to
acquire Cobra helicopters and other military
aircraft, aircraft parts, and other military use
items for the country of Iran. The chart on
this investigation [not available] depicts some
of the interesting aspects of this case. This
case was developed through a Customs
undercover storefront set up to target the
drug smuggling community. Yet, ironically,
the storefront caught the interest of violators
conspiring to acquire military hardware for
Iran. This investigation illustrates the ability
of the Customs Service to respond to the full
scope of enforcement problems at our bor-
ders. Items seized by Customs officers during
outbound enforcement operations also in-
clude guns and currency intended for foreign
drug traffickers, precursor chemicals, and
stolen vehicles.

In response to the Iraqi invasion of Kuwait,
the Customs Service activated a National
Crisis Center as a clearinghouse for law
enforcement and intelligence information
relating to Iraq. The national crisis center
acted as a liaison with other U.S. agencies for
channeling and substantiating information
and intelligence relating to the conflict in the
Persian Gulf. The National Crisis Center was
supplemented by an Iraqi Task Force which
tracked and analyzed all U.S. Customs inves-
tigations relating to Iraq.

Since the imposition of the Iraqi embargo, the
Customs Service has made more than 70
seizures of goods destined for Iraq or Kuwait.
These seizures are valued at more that $10
million. Many of these seizures were made in
the early stages of the embargo, and were in

transit prior to the implementation of the
embargo. The Customs Service has also
provided continuing cooperation to the Office
of Foreign Assets Control in the effort to
identify specially designated nationals of Iraq
and block Iraqi assets in the U.S.

To date, both the U.N. and presidential
embargoes remain in effect. Additional export
restrictions resulting from the Secretary of
State’s designation of Iraq as a country that
has repeatedly provided support for acts of
international terrorism also remain in place.
The Customs Service will continue to closely
monitor exports to Iraq as long as these
restrictions continue.

The Customs Service is constantly looking for
ways to improve its ability to enforce U.S.
export controls. One of our forward-looking
initiatives is the development of the Auto-
mated Cargo Export System (ACES). This
system would allow for the automation of the
Customs outbound manifest, the Shipper’s
Export Declaration and other related export
documentation. This automation would
permit the Customs Service to more effec-
tively and efficiently target suspect export
shipments for intensive examinations. The
estimated cost of the system is approximately
$40 million over a 5-year period. The Cus-
toms Service is currently exploring a mecha-
nism to develop and fund this system.

In the area of legislation, the Customs Service
recommends that the Congress explore the
passage of a new export enforcement statute
that would provide Customs with specific
and uniform forfeiture and investigative
authority relating to exports. Currently, the
Customs Service operates under a myriad of
statutes and regulatory and executive authori-
ties that have often been subject to conflicting
interpretation by the courts and other federal
agencies. The statutes would correspond to
Customs authority to enforce import smug-
gling laws and will not affect the enforcement
jurisdiction of any other agency.

This concludes my comments and Iam
willing to answer your subcommittee ques-
tions at this time. #

Page 22

Defense Trade News, Volume 2, Number 4, October 1991



el

Can something else be substituted? Gener-
ally, no other document (such as an import
certificate) is accepted as a substitute for a
Form DSP-83 with the license application,
unless the document is addressed to the U.S.
Department of State and specifically ad-
dresses all concerns stated in ITAR § 123.10(a)
and (a).

Does the Office of Defense Trade Controls
(DTC) always require a Form DSP-83 to
accompany a Form DSP-85 for a classified
application? If the article, service, or techni-
cal data is classified by a U.S. agency, a Form
DSP-83 must accompany the Form DSP-85 for
a classified application. When the classifica-
tion originates from a foreign government, §
123.10 does not apply, and a Form DSP-83 is)
not required.

However, there are occasions when U.S.
agencies review items and data which were
classified by a foreign government. If the U.S.
agency institutes a U.S. Government classifi-
cation on the item or data which was origi-
nally classified by a foreign government, then
the provisions of the ITAR apply, and a Form
DSP-83 is required.

Occasionally, a foreign government will insist
that a U.S, agency classify the foreign-origin
material even when the U.S. Government
regards the information as unclassified. Since
the item or data emerges with a classification
established by a U.S. agency, the U.S. Muni-
tions List (USML) applies, and a Form DSP-83
must accompany the Form DSP-85 applica-
tion to DTC. @

Page 28

Defense Trade News, Volume 2, Number 4, October 1991



Enhancing U.S. Trade Competitiveness

CDT Will Review Lists of Prospective Reexports

US. defense trade control policies are prima-
rily based on foreign policy and national
security considerations, rather than economic
ones. This leads some defense firms and
foreign countries to view US. controls as
excessively strict and burdensome, especially
with regard to third country transfers. For-
eign defense firms claim to be hesitant to
pursue joint venture and subcontracting
agreements with US. defense firms, fearing
limitations on their freedom to export prod-
ucts incorporating U.S. components.

Realizing the importance of a strong defense
industrial base, the Department of State is
endeavoring to improve the competitiveness
of U.S. defense manufacturers, consistent
with its regulatory obligations. Pursuant to
this goal, the Center for Defense Trade (CDT)
wants to encourage foreign firms desiring
joint ventures with U.S. defense firms or U.S.
subsidiaries, or American companies seeking
such arrangements, to submit a list of pro-
spective export destinations along with any
initial licensing submission. This list of sales
territories will be reviewed by the Depart-
ment of State, the Department of Defense,
and other concerned agencies. Preliminary
approvals of the countries listed in the sales
territories will be granted on an individual
basis. Foreign defense firms, possessing
preliminary approval for third country
transfer destinations, can thus avoid much of
the uncertainty sometimes associated with
third country transfer requests.

This is not a policy change. Foreign firms
desiring to export a defense article which
incorporates U.S. components or technology
will still be required to obtain a third country
transfer approval prior to reexport. But the
USS. defense firm, having received prelimi-
nary approval for its desired reexport desti-
nations, can be reasonably certain that the
third country transfer request will be ap-
proved.

CDT hopes that U.S. defense firms’ perceived
disadvantages resulting from U.S. defense
export regulations can be corrected by remov-
ing the uncertainty from the third country
transfer request process. Foreign defense
firms may be more willing to utilize Ameri-
can defense components and subsystems if
they can obtain approval for their desired
distribution destinations prior to production.

Current System of Retransfer Authority.
The current system provides for preliminary
approval of potential exports as well as actual
approval of exports where a larger sales
territory is desired. An advisory opinion
request can elicit information for U.S. compa-
nies on the U.S. Government position on
exporting particular products or services to
specific foreign destinations and end-users.
This information can assist U.S. industry in its
long-term marketing plans, since the U.S.
companies will know in advance the U.S.
Government position, including any restric-
tions on the transaction. A letter inquiry
specifying the commodity, services (if any),
end-user, and end use may be submitted. See
International Traffic in Arms Regulations
(ITAR), section 126.9, for further information
on preparing an advisory opinion request.

Distribution Agreements. Section 124.14 of
the ITAR is designed to facilitate reexports of
defense articles being warehoused in a for-
eign country for distribution or for integration
into an end item which will be sold to other
foreign destinations.

Manufacturing License and Technical
Assistance Agreements. Section 124.10
provides for transfers of defense articles
produced in a foreign country. The sales
territory may consist of countries which the
foreign licensee intends to sell the product to
within the next 5 years.

Page 4

Defense Trade News, Volume 2, Number 4, October 1991



aS

SOUTHWESTERN REGION

Defense Investigative Service
Industrial Security RA (S42PX)

201 East Indianola Street, Suite 360
Phoenix, AZ 85012-2055

Attn: Mr. Edward Hyland

Tel: (602) 640-2448, (AV) 261-2448

Defense Investigative Service
Industria! Security RA (S42CG)
P.O. Box 62157

Colorado Springs, CO 80962-2157
Attn: Mr. James Shrigley

Tel: (719) 260-1655

Defense Investigative Service
Industrial Security FO (S42DR)
P.O. Box 2651

Denver, CO 80201-2651

Attn: Mr. Bert Staats

Tel: (303) 844-5233, (AV) 943-5233

Defense Investigative Service
Industrial Security RA (S42AS)
P.O. Box 141097

Austin, TX 78714-1097

Attn: Jean R. Sladek

Tel: (512) 834-9840

Defense Investigative Service

Industrial Security FO ($42DA)

7701 North Stemmons Freeway, Suite 310 LB8
Dallas, TX 75247-4206

Attn: Mr. Chester Thomas

Tel: (214) 767-5819

Defense Investigative Service
Industrial Security RA (S42EP)
P.O. Box 8066

El Paso, TX 79908-0066

Attn: Mr. James Foster

Tel: (915) 568-8321, (AV) 978-8321

Defense Investigative Service
Industrial Security RA (S42HS)
1415 North Loop, West, Suite 660
Houston, TX 77008-1653

Attn: Mr. Regina Johnson

Tel: (713) 880-0761, (AV) 526-4754

Defense Investigative Service
Industrial Security RA (S42FW)

860 Airport Freeway West, Suite 302
Hurst, TX 76054-3263

Attn: Mr. Michael Clifford

Tel: (817) 885-7137, (AV) 334-7131

Defense Investigative Service
Industrial Security FO (S42SA)
P.O. Box 8580

San Antonio, TX 78208-0580

Attn: Mr. Richard Stogsdill

Tel: (512) 229-5144, (AV) 471-6015

Defense Investigative Service
Industrial Security FO (642AQ)
P.O. Box 18028

Kirtland AFB, NM 87185-0028
Attn: Mr. Gerald E. Bammert

Tel: (505) 846-1814, (AV) 246-1787

NORTHWESTERN REGION

Defense Investigative Service
Industrial Security RA (S5S2AL)
620 Central Avenue

Building 2G, Room 113
Alameda, CA 94501-3801
Attn: Mr. Michael Daniels
Tel: (415) 522-2008

Defense Investigative Service
Industrial Security FO (S52SF)
Building 195, Room 202, The Presidio
San Francisco, CA 94129-7700

Attn: Mr. Edward Gensel

Tel: (415) 561-5608, (AV) 586-5608

Defense Trade News, Volume 2, Number 4, October 1991



Ls

Defense Investigative Service
Industrial Security RA (S53TO)
P.O. Box 2045 - CVS

Thousand Oaks, CA 91358-0914
Attn: Ms. Brenda A. Diggs

Tel: (805) 945-8680

Defense Investigative Service
Industrial Security FO (S53VN)

6949 Van Nuys Boulevard, Room 223
Van Nuys, CA 91405-3935

Attn: Mr. Albert Ochs

Tel: (818) 904-6370/75

Defense Investigative Service
Industrial Security FO (S53HN)

300 Ala Moana Boulevard, Suite 4317
Honolulu, HI 96850-0001

Attn: Mr. Ernest Ikei

Tel: (808) 541-2809/19/11/12/13

OFFICE OF INDUSTRIAL SECURITY,
INTERNATIONAL (OISI)

OISI - EUROPE

BRUSSELS

Director, OJSI-E

APO New York 09667

Director: J. William Leonard Dial
Tel: 011/322/725-0884

Fax: Same as Above

MANNHEIM, WEST GERMANY

Chief, OISI Field Office

Hammmond Barracks

APO New York 09333

Chief: Mr. Joseph Ayres

Tel: 011/49621/472582 , (AV): 380-8363
Fax: Same as Above

OISI - FAR EAST

YOKOHAMA, JAPAN

Chief, OISI -FE/V0470

DIS, MTMCTY

FPO Seattle 98760-2980

Director: Mr. Ronald C. Monday

Tel: 011/81/045/441-0378
(AV): 235-6703

Fax: Same as Above

Defense Trade News, Volume 2, Number 4, October 1991

Page 17



Estonia, Latvia,
and Lithuania

Diplomatic Relations

President Bush announced on September 2
that the United States is prepared to assist
the Baltic states in their current progress
toward making independence a reality. U.S.
recognition of Estonia, Latvia, and Lithuania
as independent states has, in fact, never been
withdrawn during the 52 years of Soviet
occupation.

Although the United States did not accept
Estonia, Latvia, and Lithuania’s forcible
incorporation into the Soviet Union, it was
necessary to recognize the latter’s physical
control of the Baltic states. Thus, Estonia,
Latvia, and Lithuania are cited in section
126.1 of the International Traffic in Arms
Regulations (ITAR) as prohibited destina-
tions for the export of defense items from the
United States.

In light of the recent and still ongoing
changes, and as the Baltic states reassert
control over their territories and affairs, the
United States will initiate steps to remove
these three countries from the prohibited list.
Although this decision will end the previous
general policy of denial of defense exports,

The Baltic
States

International boundary
— SSR. Boundory
Notional copitol 4s

~Panevezys

LITHUANIA UNION

rt Byelorussian
SSR

Ty sKounos
ius® Sree sounderin ot exten, Lota
— RSFSR Vilnius® )0°9 uthuons nth the 0S ore
nS alytus, ” siveced fo be eonfmeé by agreement

Other boundary representation ts not
7. necessariy cuthortotve

we envision licensing, at first, only a limited
number of items for civilian end use, commer-
cial purposes, or public safety or public health
applications.

Once these countries have the necessary
organizational structures in place to run their
own affairs and control the export or reexport
of defense items from their respective territo-
ries, the United States will consider further
relaxing the policy regarding the export of U.S.
Munitions List (USML) items in accordance
with their security and other needs. #

Defense Trade News, Volume 2, Number 4, October 1991

Page 3



a

Asian affairs and has served in South Africa
and Indonesia. Mr. Horowitz received his
graduate degree from Yale University.

Marlene Urbina joined in September 1990.
She is responsible for COCOM issues, includ-
ing the Presidentially directed USML-
COCOM rationalization exercise. Ms. Urbina
has extensive background in export controls
and COCOM affairs. Prior to joining the PM
Bureau, she served in the Office of COCOM
Affairs of the Department's Bureau of Eco-
nomic and Business Affairs. Ms. Urbina’s
experience also includes 3 years as an Export
Licensing Specialist in the Department of
Commerce, and 3 years as a Staff Assistant
with the World Bank.

Linda L. Lum came to DTP in September
1990, assuming responsibility for the develop-
ment of defense marketing studies on the
Western European region. She also works on
various issues affecting Eastern Europe. Since
joining the Department in 1984, Ms. Lum has
served in the Bureau of International Organi-

zations Affairs and the Center for the Study of
Foreign Affairs, where she worked on human
rights diplomacy. She holds an M.A. from
the Department of Political Science, Univer-
sity of Chicago, and a B.A. from the Depart-
ments of History and Political Science, Yale
University.

Brenda K. Baker arrived in DTP in April 1990
to fill the newly created industry outreach
position. Her civil service career has centered
on antitrust, foreign policy and law enforce-
ment issues. Ms. Baker previously served asa
paralegal specialist in the Compliance Divi-
sion of the former Office of Munitions Con-
trol. Ms. Baker is currently responsible for
the development of defense marketing stud-
ies on the American Republics and Sub-
Saharan Africa.

Eva L. Chesteen came to DTP in September to
fill the position of secretary. She transferred
from the Department of State's Bureau of
European and Canadian Affairs, where she
worked with post management officers. #

Page 26

Defense Trade News, Volume 2, Number 4, October 1991



Secretary of State
James A. Baker Ill

Under Secretary
of State for
international Security
Affairs
Reginald Bartholomew

Assistant Secretary
of State for
Politico-Military
Affairs
Richard A. Clarke

Director of the Center
for Defense Trade
Charles A. Duelfer

Executive Editor
Brian |. McCleary

Managing Editor
Marsha F. Filtrante

Production Editor
Paula M. Lorfano

Design Consultant
Richard E. Florence

Contributing Editors

Major Mike Van Atta

U.S. Customs at DTC:
Thomas R. Smith

Commodity Jurisdictions:

Defense Trade News (ISSN 1051-2845) is a quarterly publication (January,
April, July, and October) of the Center for Defense Trade, Bureau of Politico-
Military Affairs, U.S. Department of State. Its purpose is to provide American
industry, the general public, Congress, and government agencies with informa-
tion on developments about defense trade policy, licensing practices, and
compliance issues. The newsletter contains official policy statements and other
official documents. Special features, articles, and other supportive materials
(such as maps, charts, graphs, tables, and photographs) provide additional
information on current issues, but should not necessarily be interpreted as
official U.S. policy statements. The Secretary of State has determined that the
publication of this periodical is necessary in the transaction of public business
required by law of the Department.

Subscription and Address Changes: Firms registered with the Office of
Defense Trade Controls automatically receive this publication at their registered
address in the name of the registrant in Block 14 of Form DSP-9. Registrants
must notify the Office of Defense Trade Controls by registered mail, citing the
applicant code, whenever their mailing address changes (ITAR 122.4). Distri-
bution is also made to all U.S. Customs Regional and District offices. The
editorial staff maintains a separate mailing list of other interested persons and
organizations. Contact the Managing Editor, via mail or datafax, to add or
change an address on the editorial mailing list.

Copyright: Most of this publication’s contents are in the public domain and are
not copyrighted. Such items may be reprinted; citation of their source as
Defense Trade News is appreciated, Permission to reproduce any copyrighted
material (including photographs) must be obtained from its original source.

Limited Reprint Authorization: All addressees who are registered with the
Office of Defense Trade Controls may reproduce this entire publication (exclud-
ing postal mailing label) for distribution within their respective organizations.
This permission is given to ensure proper distribution throughout companies
with multiple locations or offices and to reduce mailing costs.

Corrections, Contributions, and Correspondence: Address to Editor, Defense
Trade News, PM/DTC, SA-6, Room 200, U.S. Department of State, Washing-
ton, D.C. 20522-0602.

Postmaster: Send address changes to Defense Trade News, PM/DTC, SA-6,?
Room 200, U.S. Department of State, Washington, D.C. 20522-0602.

Postage: Third-class postage paid in Washington, D.C. 20522-0602.




TT

Defense Investigative Service
Industrial Security FO ($32DT)
25900 Greenfield Road, Suite 425
Oak Park, MI 48237-1267

Attn: Mr. Jonathan G. Cline

Tel: (313) 968-5207

Defense Investigative Service
Industrial Security FO (S32MN)
P.O. Box 17159

Minneapolis, MN 55417-7128
Attn: Mr. Robert J. Turay

Tel: (612) 725-8053, (AV) 825-8053

Defense Investigative Service
Industrial Security RA ($32KC)
911 Walnut Street, Room 2605
Kansas City, MO 64106-2097
Attn: Mr. David Lundy

Tel: (816) 426-3167

Defense Investigative Service
Industrial Security FO ($32SL)
8900 South Broadway

St. Louis, MO 63125-1513

Attn: Mr. John D. Townsend

Tel: (314) 263-8285, (AV) 693-8285

Defense Investigative Service
Industrial Security RO (S32MH)
4940 South 114th Street, Suite 2
Omaha, NE 68137-2324

Attn: Ms. Regina Eddie

Tel: (402) 593-9035

Defense Investigative Service
Industrial Security FO (S32CN)
525 Vine Street, Room 940
Cincinnati, OH 45202-3122
Attn: Mr. Robert R. Forbes
Tel: (513) 684-3923

Defense Investigative Service
Industrial Security FO (S32CL)
P.O. Box 99536

Cleveland, OH 44199-0536

Attn: Mr. James A. Cleland

Tel: (216) 522-5348, (AV) 580-S348

Defense Investigative Service
Industrial Security FO (S32DY)
P.O. Box 111

Fairborn, OH 45324-0111

Attn: Mr. John D. Davis

Tel: (513) 225-2702

SOUTHEASTERN REGION

Defense Investigative Service
Industrial Security RA (S41B1)

600 Beacon Parkway West, Suite 765
Birmingham, AL 35209-3120

Attn: Mr. James R. Duke

Tel: (205) 731-1458

Defense Investigative Service
Industrial Security FO (S41HV)
513 Sparkman Drive, Suite 105
Huntsville, AL 35816-3400

Attn: Mr. Jesse M. Davis

Tel: (205) 895-4324, (AV) 788-4324

Defense Investigative Service
Industrial Security RA (S41CR)
1100 Cleveland Street, Suite 1100
Clearwater, FL 34615-4805

Attn: Mr. James D. Evans

Tel: (813) 442-4604

Defense Investigative Service
Industrial Security RA ($41JX)
400 West Bay Street, Box 35025
Jacksonville, FL 32202-0025
Attn: Ms. Kay B. Harris

Tel: (904) 791-3224

Defense Trade News, Volume 2, Number 4, October 1991

Page 13



Defense Investigative Service
Industrial Security FO (S52PQ)

828 South Bascom Avenue, Suite 110
San Jose, CA 95128-2600

Attn: Mr. Gordon Matheson

Tel: (400) 298-9975

Defense Investigative Service
Industrial Security FO (S52SC)

3180 De La Cruz Boulevard, Suite 100
Santa Clara, CA 95054-4934

Attn: Mr. Roger Raasch

Tel: (408) 988-3444, (AV) 561-3446

Defense Investigative Service
Industrial Security RA (S52SK)
Building 105, Room 204

Fort Douglas, UT 84113-5017
Attn: Mr. John Burns

Tel: (801) 524-4235, (AV) 924-4235

Defense Investigative Service
Industrial Security FO (S52SE)
P.O. Box 15108

Seattle, WA 98115-0108

Attn: Mr. Jerry L. Pearson
Tel: (206) 526-6706

PACIFIC REGION

Defense Investigative Service

Industrial Security FO (S53WC)

6101 West Centinela Boulevard, Suite 349B
Culver City, CA 90230

Attn: Mr. Haruo N. Tazumi

Tel: (213) 215-1306

Defense Investigative Service

Industrial Security FO (S53ON)

3333 South Brea Canyon Road, Suite 106
Diamond Bar, CA 91765-3782

Attn: Ms. Mary Jo Hickey

Tel: (714) 598-9878

Defense Investigative Service
Industrial Security RA (S53ED)
44915 North Elm Avenue
Lancaster, CA 93534-2407
Attn: Mr. Michael Stell

Tel: (805) 945-7674/8831

Defense Investigative Service

Industrial Security FO (S53GG)

1100 West Town & Country Road, Suite 400
Orange, CA 92668-4600

Attn: Mr. William Devine

Tel: (714) 836-2791/92, (AV) 873-2791

Defense Investigative Service
Industrial Security FO (S53PA)

125 South Grand Avenue, Suite 518
Pasadena, CA 91105-1621

Attn: Ms. Suzanne Corona

Tel: (818) 449-0941

Defense Investigative Service
Industrial Security FO (SS3SD)

2221 Camino Del Rio South, Suite 312
San Diego, CA 92108-3698

Attn: Mr. Mark Smith

Tel: (619) 557-5914/15

Defense Investigative Service
Industrial Security FO ($53VS)
Naval Training Center, Building 304
San Diego, CA 92133-5000

Attn: James R. Isoda

Tel: (619) 224-1161

Defense Investigative Service

Industrial Security RA (S53XB)

115 South Lacumbre Lane

Santa Barbara, CA 93105-3136

Attn: Raymond Foster/James Provenza
Tel: (805) 569-5540

Page 16

Defense Trade News, Volume 2, Number 4, October 1991