A few that stood out for me:

• Excellence Engineering Electronics – Restricted Technology to China
• ITT Corporation – $100 Million Penalty for Illegal Exports of Military Night Vision Technology to China, Singapore, U.K.
• United Calibration Corporation in California – Technology with Nuclear Applications to Iran
• Infocom Corporation – Terrorist Transactions, Computer Exports to Libya and Syria

Read through the list carefully – some of these guys knew what they were doing was wrong, but I bet more than one was just conducting day to day business.

I thought it might be time, to put the “legalities” of export controls aside, and instead, view these “controls”, whether they be BIS or OFAC’s, from the eye of the people that truly are affected-and I am not talking about American businesses, which though do have valid reasons to dispute unilateral embargoes placed by the U.S.

I am talking about Sudan-a topic that due to the Olympics in China, has finally, after years, taken the forefront of both the news and the people (although, history sadly shows, this is usually only temporary). My interest in Sudan began over a year ago, when I was requested to petition for a “humanitarian exemption” to OFAC and Department of State. As I often do, I threw myself into this project, though admittedly, from the eyes of an attorney. Yet, something occurred during this entire process-I guess it was after having read and poured through, literally, thousands of pages on Sudan, the atrocities being committed, and the unimaginable toll on the Sudanese people, especially in Darfur.

This “project” was based on granting relief to the region known as Southern Darfur, and in particular, the city of Nyala. After determining the number of refugees in the Internally Displaced Persons (IDPs) camps, the NGOs and U.N. efforts in addressing & servicing the needs of all these refugees, I became convinced that the world must be made aware of the situation in Sudan. Having had the ultimate privilege of personally working with the current U.S. Special Envoy and Ambassador to Sudan, Mr. Richard Williamson, and after meetings with the State Department and other government officials, I had “crossed the line”, and became emotionally involved in this case based solely on humanitarian needs.

Attorneys are taught not to get emotionally involved with a client and at times, with their case, but instead to work objectively for the best interests of the client. But who has been working for the “best interests” of the Sudanese? With current restrictions placed by the Department of Treasury and OFAC, it is nearly impossible to be granted an export license, even with the best intentions of a client wanting to assist and help the citizens of Sudan. The statistics speak for themselves: During the time period of October-December 2005, 233 licenses were issued by OFAC; during this same time period in 2007, only 100 were issued. A total of only 16 licenses were issued to Sudan-one of the largest humanitarian crises facing the world today.

Now, let us take a look at some other facts:

1. ABC, NBC, CBS devote roughly 25,000 minutes to news yearly.
2. During the entire year of 2004 (one of the heights in the crises in Sudan and the genocide that was unraveling before the world’s eyes), these 3 stations combined, dedicated a mere 26 minutes to Sudan-0.001 percent of their entire broadcasting combined!
3. In 2005, 2 years into the genocide, NBC aired only 5 segments, CBS none, yet during this same time period, NBC and CBS aired over 300 segments on Tom Cruise’s romantic relationship with Katie Holmes and over 500 stories on Michael Jackson’s trial-65 times more segments were aired on celebrity gossip than on the genocide in Darfur and Sudan-an incredible statistic!

Thus, began the journey of reading and studying on the humanitarian crises, while at the same time, serving the needs and best interest’s of my client. After reviewing studies and reports, from NGOs, the U.N., World Bank, Unicef, and many others, I thought it would possibly impact Illinois citizens, if they were to “truly see” the number of casualties and refugees impacted. Thus, to comprehend the destruction and size of this genocide, the killing fields of Sudan must be put into a perspective that Americans can and will comprehend. Thus, taking the State of Illinois, and the most recent census statistics, I came to the following:

1. At least, if not more, than ½ of Darfur’s population is now in refugee camps-roughly 3 million people. Realistic and conservative figures of the dead are 300,000. Many have met their demise at the hands of the Janjawid (“devil on horseback”), in such ways that are unimaginable, such as being thrown alive down water wells, burnt alive, and left for the vultures to feed upon their bodies.
2. Now, to put the above into perspective, imagine the following-the top 6 cities in the State of Illinois (Chicago, Aurora, Rockford, Naperville, Joliet, and Springfield) are living in the open or tents, with the bare necessities for living (i.e. water, extremely limited food; no medicine, no schools). Furthermore, if one were to take Naperville, Peoria, and Waukegan, Illinois and literally “wipe them from the face of the earth”, we will have slaughtered less human beings, than those killed in Darfur alone!

Several weeks ago, I had the privilege, and it is a privilege, to personally meet and speak with Mr. Paul Rusesabagina, over dinner. For those of us who have seen the film “Hotel Rwanda”, Mr. Rusesabagina was the real-life manager of the hotel depicted in that film. He personally saved over 1,200 people during the slaughter that engulfed Rwanda and its own genocide in 1994. I truly believe, I shall never meet a more humble and amazing man in this lifetime again! My wife and I spoke to him, about his family, kids, and two adopted nieces (orphaned due to the genocide), and of how some of his children are now studying in college here in America. I also spoke to him about his recent trip to Sudan, hearing a first-hand account of what is happening in Darfur-an amazing experience and conversation.

To say the least, my meeting with Mr. Rusesabagina motivated me even more, to try and raise awareness on this ongoing atrocity. If there is a difference we can make, by raising awareness as Mr. Rusesabagina has, than maybe, just maybe, this article will accomplish that. OFAC’s rules and regulations, including the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), has directly impacted the ability for U.S. companies to contribute, on a humanitarian level, to the current genocide. If we can strike a balance between such sanctions and the people it affects, we have a duty to do so, for the disenchanted people of Sudan will tomorrow be the very terrorists OFAC is attempting to stop, because with no where to go, and nothing to lose, anything and anyone is better than what the people of Sudan have today.

The opinions expressed in this article are those of the attorney and do not represent the Firm’s opinion or position on Sudan. Written by: Christos Linardakis, Of Counsel to Braumiller Schulz LLP.

In the world of export compliance, corporate practitioners are constantly faced with issues from deemed exports to foreign nationals, to export licenses for high technology items. But, bananas? You don’t need to be an expert to realize that under 15 CFR, you’re not going to find an ECCN classifying bananas (other than EAR99). So, who would ever think that growing and selling bananas could lead to a multi-million dollar penalty for violating the Export Administration Regulations and OFAC (Treasury Regulations)?

Well, that’s exactly what happened this past couple weeks, when the Department of Justice issued a $25 MUSD—yes, that’s a 25 million dollar penalty! – against Chiquita Brands International, for violating the above regulations. The case began back in 1997, when Chiquita began paying the United Self Defense Forces of Columbia (“AUC”) and Revolutionary Armed Forces of Columbia (“FARC”) payments for “protection” against attacks on its employees and fields where the bananas were grown. Although Chiquita may have had good reason to do so (motivated by their good faith for the safety of their employees), the payments continued for approximately another 7 years, totaling some $1.7MUSD in payments.

Both organizations that received these payments were listed on both U.S. and E.U. regulations as being terrorist organizations. The EAR and OFAC impose restrictions on exports (including financial assistance) to entities and individuals listed a s “Specially Designated Global Terrorists” (SDGTs), “Specially Designated Terrorists” (SDTs), or Foreign Terrorist Organizations (FTOs), under 15 CFT Part 744. Without a license, there are no exception that overcome these prohibitions. In addition to 15 CFR restrictions, there are additional regulations under both 31 CFR Parts 594 thru 597 that govern terrorist sanctions. Restrictions under 31 CFR 595 specifically prohibits “funding to or for the benefit of an SDT”.

To make this area of compliance even more confusing is the fact that an SDT or similar terrorist organization may request the assistance of a U.S. law firm for legal counsel, which court decisions have agreed, that OFAC may not require licenses for provision of legal services, but, may require a license for the law firm, before the law firm may accept payment for its services (31 CFR 595, 746 F.2d 865 (D.C.Cir.1984)).

In the case of Chiquita, one must be sympathetic with the reasons for making such payments—protection of its employees in an area within Colombia that has a strong presence of such terrorist organizations. Again, the decision ultimately is a business decision, on whether or not to continue operating a business or unit that may require violating the law (in this case, Chiquita has since sold that business unit). But, the case does raise another issue, which has been hotly debated for years—Chiquita voluntarily approached the Justice Department in 2003, which eventually led to a nearly 4 year civil and criminal investigation not only against the company, but also against some of its officers and directors within the scope of the investigation.

4 years is a long time for any compliance attorney or officer to undergo such an investigation, not to mention the internal costs to a company, attorney fees (which one can assume were in the millions), and eventually, a $25MUSD penalty—all of this after a voluntary disclosure and plea agreement. Oh yes, let’s not forget front page news coverage of “guilty for sponsoring terrorists”—I think Chiquita’s public relations department have their hands full today! So, where does that leave us as to the pro’s and con’s of voluntary disclosures? Well, you will have to just wait till next month’s newsletter, where this topic will be discussed. But, as of today (3/22/2007), the Chicago Tribune, printed an article on how, now, the Colombian Attorney General, Mr. Mario Iguaran, is not only asking for the information provided to the DOJ, but, Colombia is possibly looking at prosecuting, on a criminal level, the officials/directors in Chiquita, on this subject. Needless to say, extradition treaties exist between the USA and Colombia. In the interim, I’ll take hot fudge with my banana split!

By: Christos Linardakis, attorney
http://www.globaltradelaw.net

 The question is: just how far will the See Through Rule be applied?  If State decides that the See Through Rule applies to all things, then there are lots of export violations floating around this planet which will be a world of bureaucratic hurt for US exporters.   JR 

David Trimble, Director of Defense Trade Controls Compliance reports enforcement stats from February 2004 to February 2006:

• $60 million in fines
• 44 Debarments
• 12 Companies over direct oversight through ongoing consent agreements
• 459 Directed Disclosures

Keep up the good work. Here is a slide show you can use in putting your presentation programs together. Use it – you paid for it!

 - Zerbe

“Mak said he believed he was doing nothing wrong by giving the documents to his brother to take out of the country because they were papers that had been presented previously at international conferences. The government, however, alleged the documents were export-controlled and couldn’t fall into foreigners’ hands.”

This is the case that may redefine the meaning of “public domain” read the excellent ExportLawBlog coverage on this. The following is a AP report from the cox.net.