Indonesia

The first-ever National Export Control Coordinator for the Department of Justice was appointed last June 20, 2007. Steven W. Pelak, a veteran prosecutor for 18 years, has been an Assistant U.S. Attorney and Senior Litigation Counsel in the National Security Section of the U.S. Attorney’s Office for the District of Columbia and, since September 2001, has served as the Anti- Terrorism Coordinator for the U.S. Attorney’s Office. Mr. Pelak is detailed to the Counter-espionage Section of the Justice Department’s National Security Division, wherein he will have some of the following responsibilities:

• development of comprehensive training materials on export control investigations and prosecutions for federal prosecutors nationwide
• solicit and receive regular progress reports from U.S. Attorneys’ offices on the development of export control cases
• coordinate between the Justice Department and the many other U.S. law enforcement, licensing and intelligence agencies that play a role in export enforcement.

Attorney General Alberto Gonzales mentioned in his June 11 speech on nuclear terrorism that the Justice Department’s National Security Division where federal prosecutors were provided instruction and guidance on export control cases, with trainers from the Justice Department and the relevant investigative agents on hand providing comprehensive prosecutorial instruction.

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In the March 29, 2006 Federal Register the Directorate of Defense Trade Controls (DDTC) in the State Department officially announced its new policy for approving exports to Indonesia. DDTC now will consider requests to export lethal defense articles on a case-by-case basis, which is a return to a more or less regular licensing policy for Indonesia.

As early as 1999 the State Department implemented a policy to deny most exports of defense articles to Indonesia. Over the last seven years State has implemented incremental relaxations to its policy. The March 29 Federal Register notice gives a brief history of those changes (http://www.access.gpo.gov/su_docs/fedreg/a060329c.html).

DDTC announced that the US Government has decided to end its ban on the export of lethal defense articles and related services to Indonesia. Eventually, the government will announce this policy with a notice in the Federal Register.

What does the policy mean in terms of what licenses and agreements will be approved? DDTC says that applications for exports of lethal defense articles and services to the Indonesian armed forces “will be considered on a case-by-case basis, in accordance with standard practice,” which does not tell you a whole lot. Bottom line: It is worth considering new business in Indonesia , if you want to give it a try, before you get too involved you might want to contact DDTC and discuss what you are considering.

In the December 18, 2001 Federal Register the he Office of Defense Trade Controls (ODTC) in the State Department has announced a new license review policy for Indonesia. Under the new policy, ODTC will review license/agreement request for the following on a case-by-case basis.

• Non-lethal defense articles and spare parts
• Non-lethal, safety-of-use spare parts for lethal end items.

ODTC said that examples of safety-of-use spares for lethal end items would include cartridge actuated devices, propellant actuated devices, and technical manuals for military aircraft for purposes of enhancing the safety of the aircraft crew.

ODTC defines “non-lethal defense articles” as “an article that is not a weapon, ammunition or other equipment or material that is designed to inflict serious bodily harm of death.”

In October 1999, ODTC suspended all licenses and approvals for Indonesia except for certain commercial communication satellites and Y2K activities not destined for the military in response to the unrest in the country. ODTC relaxed this policy twice in 2001: In January it announced a policy of case-by-case review for spare parts for C-130 aircraft and in March it announced a case-by-case review policy for items exported to Indonesia for ultimate end-use in a third country.

By implementing a “case-by-case review” policy, ODTC is saying that it will not automatically deny licenses, but will review them on their merits.

ODTC gave no reason for relaxing its Indonesia policy, but we suspect the new policy is a reward for Indonesia’s cooperation in the aftermath of the September 11 attack-a reward we predicted in our newsletter in September.

In the March 22, 2001 Federal Register the Office of Defense Trade Controls (ODTC) in the State Department announced a slight change to its presumption of denial for export licenses for items on the United States Munitions List destined for Indonesia. Under the new policy, the State Department will consider applications for exports and reexports to Indonesia, when such shipments are ultimately destined for a third country. State announced that it will review such requests on a “case-by-case basis.”

In the January 25, 2001 Federal Register the Office of Defense Trade Controls issued a notice stating that it will consider approving license applications for C-130 spare parts destined for Indonesia, including in certain cases when destined for the Government of Indonesia.