Venezuela

The Department of State has issued to Congress that Cuba, Eritrea, Iran, North Korea, Syria, and Venezuela are not fully cooperating with the United States antiterrorism efforts. John D. Negroponte, Deputy Secretary of State has issued the decision to retain the certification of North Korea pursuant to Section 40A of the Arms Export Control Act.

There will be an ongoing review of the designation of North Korea and the outcome of the review may warrant a new assessment and possible change in certification.

More information:

• Federal Register Notice

In the February 7, 2007’s Federal Register, the State Department amended section 126.1 of the ITAR to include Venezuela in the list of countries not cooperating fully with anti-terrorism efforts. This just makes the policy announced last year officially a part of ITAR 126.1.

The Secretary of State determined that Venezuela, along with Cuba, Iran, North Korea and Syria, would be placed on the list beginning October 1, 2006. The AECA prohibits the sale or licensing of defense articles and services to those countries on the list for the term of one fiscal year beginning October 1, 2006. Additionally, the State Department issued a policy of denial of the export or transfer of defense articles to and revocation of existing authorizations for Venezuela on August 17, 2006.

Federal Register notice

Canadian Citizens May Seek Relief via Canadian Legal System

According to media reports, the fallout continues from conflict between tight United States ITAR requirements and Canadian defense manufacturers. US regulations prohibit Canadian citizens who have dual citizenship in a country listed in ITAR 126.1 from working on US defense projects. There are currently 19 countries whose citizens are banned from this type of work including China, Cuba, Lebanon, Syria, North Korea, Belarus, Afghanistan and Rwanda. Recently Venezuela was added to this list, which may have contributed to the termination of an employee at Montreal’s Bell Helicopter facility.

Bell Helicopter is currently working on an $849 million contract for the US Military and has had to reassign 24 employees to stay in compliance with the US regulations on who can work on their defense projects.

Jaime Vargas, a Canadian citizen with dual citizenship in Venezuela, had only worked at Bell Helicopter for several weeks when he was unexpectedly terminated. There are conflicting stories from Mr. Vargas and Bell representatives on the quality of work performed by the employee. Though Bell claims that he had performed poorly, Mr. Vargas states that he had had nothing but positive reviews and had recently been congratulated by his supervisor on the high quality of his work.

The Canadian Centre for Research-Action on Race Relations says that it will be filing a civil suit on Mr. Vargas’ behalf stating that they believe he was terminated solely based on his connection with Venezuela. They will ask for $110,000 in compensation for Mr. Vargas. The suit will be based on allegations that the termination violated Canadian Human Rights laws.

John Black’s Note: I hope Mr. Vargas wins the suit. I seriously doubt that DDTC will want to revise the ITAR if that happens, but I love it when DDTC digs in its heels and refuses to bend its policies to take into account issues outside of its own control. I look forward to the eloquent statement of the DDTC position, “We don’t care if you win a law suit, we don’t care if the ITAR causes good Canadian companies to violation Canadian laws, we aren’t changing the ITAR.”

Source: “Canoe Network Money” February 6, 2007

Full story on Canoe Network

Venezuela:

In the August 17, 2006 Federal Register the State Department announced it has imposed comprehensive ban on transfers of defense articles and services to on Venezuela. The US took first step toward imposing this ban when it named Venezuela as a country supporting international terrorism on May 15, 2006 . Technically, however, the new State Department ban is not directly tied in a legal sense to Venezuela being identified as a “Country Supporting International Terrorism.”

(Contrary to popular belief, these actions are not based on the State Department identifying Venezuela as a “Country Insulting George Bush.”

Specifically, State:

• Revoked all licenses and approvals (agreements) for exports or transfers to Venezuela
• Revoked the use of ITAR exemptions for Venezuela , except for the use of ITAR 123.17 for personal use firearms
• Imposed a policy to deny all new applications for Venezuela

Lebanon:

To implement the United Nations arms embargo (UNSCR-1701) on Lebanon , the US State Department announced its new policy for transfers of defense articles and services to Lebanon. The US sanctions are intended to allow transfers of defense articles and services to the Government of Lebanon and the United Nations International Force in Lebanon (UNIFIL).

Specifically, the sanctions say:

• Any existing license or authorization for the export to Lebanon of ITAR-controlled defense articles or services is hereby suspended unless the end-user is the Government of Lebanon or UNIFIL.
• Holders of other existing licenses or authorizations, including exemptions, must submit documentation for review by the Directorate of Defense Trade Controls (DDTC) supporting the authorization of the transaction by the Government of Lebanon or UNIFIL.
• For future authorizations, exceptions to this policy of denial will be made, in accordance with the ITAR, on a case-by-case basis to determine whether they conform to UNSCR 1701.

You may not use any license, authorization or exemption for transfers to parties other than the Government of Lebanon and UNIFIL.

This notice has not yet appeared in the Federal Register. You may read it at the DDTC web site: www.pmddtc.state.gov/defense_trade_lebanon_arms_embargo.htm

Libya:

No news, is, in this case, no news. The Commerce Department has written up the new rules to revise the EAR to remove “Anti-Terrorism”(AT) controls on items such as 9A991 commercial aircraft parts for Libya. This rule is still being reviewed by the government and select industry representatives. Sooner or later, (I’m giving 2 to 1 odds on later), there will be a notice in the Federal Register removing the AT controls. I am staking my reputation on my prediction that this change will happen in 2006.

On the Libya ITAR front, the State Department has to remove Libya from the ITAR 126.1 proscribed country list. Seeing as how it is taking State 2–3 months before it even looks at normal agreement application, I think it is safe to say that it will be a while before the ITAR is revised.

Last month I warned my readers that I would not be surprised if the US Government decided to impose anti-terrorism based licensing requirement on exports of commercial items in EAR classifications such as 9A991 and 4A994.

It does not look that is going to happen anytime soon.

On May 15 the State Department notified Congress that Venezuela is now on the list of terrorist countries (“countries not fully cooperating with the antiterrorism efforts of the United States”). DDTC announced that beginning on October 1, 2006, it will implement a policy of denying all applications for the commercial export of defense articles and services to Venezuela. DDTC also stated that between now and October 1, 2006, it “will continue to carefully scrutinize all proposed arms transfers and sales to Venezuela on a case-by-case basis.” OK, that means you probably won’t get anything approved before October either.

Read More