New Crime Makes it Easier to Prosecute Illegal Exports

With March, 2006’s Patriot Act amendments, a new crime has been born that could have significant repercussions for exporters. The criminal export control statute has some new sharper teeth. With the revision of 18 USC, section 554, it is no long is necessary to determine whether an exported item actually required a license for export when prosecuting a case. The new regulation reads as follows:

“(a) In general. Whoever fraudulently or knowingly exports or sends from the United States, or attempts to export or send from the United States, any merchandise, article, or object contrary to any law or regulation of the United States, or receives, conceals, buys, sells, or in any manner facilitates the transportation, concealment, or sale of such merchandise, article or object, prior to exportation, knowing the same to be intended for exportation contrary to any law or regulation of the United States, shall be fined under this title, imprisoned not more than 10 years, or both.”

The words “contrary to any law or regulation” are very weighty. In the first use of this case earlier this summer, the exporter failed to file an SED for the exported item. Regardless of if the exported item would have required a license, the exporter acted contrary to a regulation and, thus, could be prosecuted for the crime.

During the ACI export controls enforcement conference in early December, 2006, Stephen Bogni (Acting Chief for Arms and Strategic Tech Investigations) said that the ICE (Immigration and Customs Enforcement) will be making aggressive use of this new provision to nail people for this new crime.