Homeland Security Investigations

February 24, 2015

Special Agent Chris Moore

Project Shield America Homeland Security Investigations - Washington DC

US Department of Homeland Security

Homeland Security Investigations

HSI Agency Facts

• Created March 1, 2003

• HSI has approximately 7000 Special Agents comprised of former United States Customs Service investigators and Immigration & Naturalization Service investigators

• HSI is the investigative arm within the Department of Homeland Security

• Over 200 domestic HSI offices

• Approximately 250 HSI Special Agents in 71 foreign offices in 47 countries

• Staff 7 Combatant Commands (Department of Defense)

Homeland Security Investigations

Homeland Security Investigations

HSI Role in Counter-Proliferation Investigations

Protect the American public from the introduction of WMD and other instruments of terror.

Prevent proliferating foreign countries, terrorists, and international criminals from obtaining the following:

• Strategic Technology

• Licensable Dual-Use Commodities

• Weapons & Munitions

• Funds

• Technical Support

Homeland Security Investigations

Project Shield America

• An industry outreach program designed to obtain assistance and cooperation from manufacturers, sellers, and exporters of U.S. origin technology, dual-use, and munitions.

• Enhance public awareness of export laws

• Provide opportunity for private sector input

Homeland Security Investigations

Export Control Laws Enforced by HSI

Arms Export Control Act - AECA

International Traffic in Arms Regulations - ITAR

US Munitions List - USML (Part 121)

Single Use - Military Items / ServicesExport Administration Act - EAA (Lapsed / Sunset – See IEEPA)

Export Administration Regulations - EAR

Commerce Control List - CCL (Part 774)

Dual Use - Commercial and Military Applications International Emergency Economic Powers Act - IEEPA EAR Enforced under IEEPA - Executive Order

Economic Sanctions and Embargoes - Against countries and individuals, i.e. terrorists, those engaged in activities related to the

proliferation of weapons of mass destruction.

Homeland Security Investigations

• The reform initiative identified four primary areas of reform through the creation of:

SINGLE CONTROL LIST

SINGLE LICENSING AGENCY

SINGLE INFORMATION TECHNOLOGY SYSTEM

SINGLE PRIMARY ENFORCEMENT COORDINATION AGENCY

Export Control Reform Initiative (ECRI)

Homeland Security Investigations

Violations of U.S. Export Control Laws

It is Unlawful to:

· Export or attempt to export from the US, or to re-export any defense article or technical data, or to furnish any defense service without first obtaining the required licenses from the DOS.

· Export or attempt to export from the US, or to re-export any commercial or dual-use item without first obtaining the required licenses from the DOC.

· Sell or transfer any export controlled commodity to a person or business within the U.S., knowing it will be illegally exported by that person or business

· Violate any of the terms or conditions of licenses or authorization granted by the DOS, DOC or OFAC.

Homeland Security Investigations

Violations of U.S. Export Control Laws (cont.)

It is Unlawful to:

· Make a material false statement or misrepresent or omit a material fact in a license application or export document.

· Fail to file a Shipper’s Export Declaration when required.

· Export or re-export to an unauthorized consignee or end-user.

· Hand-carry technical data orally, visually, or electronically, (by fax, e- mail, telephone, Internet, Intranet, marketing presentations) to foreign persons or company employees overseas without appropriate export control authorization.

Homeland Security Investigations

Primary U.S. Export Control Laws (cont.)

Export Administration Regulations - EAR

· Governs the export controls for commercial and dual use products

· Part 764 - Civil / Administrative Penalties

· Part 764.5 - Voluntary Self Disclosure of Export Violations

· Part 762 - Recordkeeping requirement - Five years from date of export

Homeland Security Investigations

Deemed Exports/Intangible Transfers

∙ Technology is "released" for export when it is available to foreign nationals in the following forms:

∙ Visual inspection (such as reading technical specifications, plans, blueprints, etc.)

∙ Exchanged orally

∙ Made available by practice or application under the guidance of persons with knowledge of the technology

Homeland Security Investigations

Deemed Exports/Intangible Transfers

∙ Export license required under the “deemed export” rule when both of the following conditions are met:

∙ Intent to transfer controlled information to foreign nationals while in the United States; and

∙ Transfer of the same technology to the foreign national's home country would require an export license

Homeland Security Investigations

Foreign person: any natural person who is not a lawful permanent resident as defined by 8 U.S.C. 1101(a)(20) or who is not a protected individual as defined by 8 U.S.C. 1324b(a)(3). It also means any foreign corporation, business association, partnership, trust, society or any other entity or group that is not incorporated or organized to do business in the United States, as well as international organizations, foreign governments and any agency or subdivision of foreign governments (e.g., diplomatic missions).

Deemed Exports/Foreign Person

Homeland Security Investigations

Releases of U.S. Technology:

• Inter-company transfers

• Nonimmigrant employees

• Nonimmigrant students/scholars

• Foreign scientists

• Joint ventures

• Tours of labs

• Specialize Military Training

• Classified Data / Techniques

Deemed Exports/Potential Vulnerabilities

Homeland Security Investigations

Technical Data: Excludes information concerning general scientific, mathematical or engineering principles commonly taught in schools, colleges and universities or information in the “public domain” as defined in 120.11. [ITAR 120.10(a)(5)].

Public Domain: Includes information published in magazines, journals, etc. OR not published, but released with unlimited distribution after approval by the cognizant US Government Department or Agency [ITAR 120.11(7)]

Public Domain: Includes information obtained through fundamental research in science and engineering at accredited institutions of higher learning in the United States where the resulting information is ordinarily published and shared broadly in the scientific community [ITAR 120.11(8)]

Important Exceptions (In Academia)

Homeland Security Investigations

Fundamental Research: Basic and Applied Research in science and engineering where the resulting information is ordinarily published and shared broadly in the scientific community, as distinguished from research the results of which are restricted for proprietary reasons or specific U.S. Government access and dissemination controls [ITAR 120.11(8)]

University Research will not be considered fundamental research if:

(1) The University or its researchers accept other restrictions on publication of scientific and technical information resulting from the project or activity.

(2) The research is funded by the US Government and specific access and dissemination controls protecting information resulting from the research are applicable.

[ITAR 120.11(8)]

Important Exceptions (In Academia)

Homeland Security Investigations

Understanding Basic vs. Applied (per DOD)

“Basic Research”

AKA: • Budget Activity 1 Research• 6.1 Research

Defined:

Basic Research is a systematic study directed toward greater knowledge or understanding of the fundamental aspects of phenomena and observable facts without specific applications towards processes or products in mind . . Farsighted, high-payoff research . . . “

“Applied Research”

AKA: • Budget Activity 2 Research• 6.2 Research

Defined:

Applied Research is systematic study to understand the means to meet a recognized and specific national security requirement. It is the systematic application of knowledge to develop useful materials, devices, and systems or methods.

Homeland Security Investigations

Understanding Basic vs. Applied (per DOD)

“Basic Research”

AKA: • Budget Activity 1 Research• 6.1 Research

Basic Example:

Research of the expansion characteristics of gun powder. The study and documenting of how rapid the chemical compositions burns and the velocity of the released gases.

“Applied Research”

AKA: • Budget Activity 2 Research• 6.2 Research

Basic Example:

Applying the technical data generated from the basic research of gun powder to a weapons system by containing the gun powder in a metal cartridge and capping the cartridge with a metal projectile.

Homeland Security Investigations

Enforcement / Investigative Goals

Disrupt / Dismantle Illicit Trafficking/Transactions through:

· Investigation

· Interdiction

· Arrest

· Prosecution - Standard of Proof

- Criminal “Beyond a reasonable doubt”

- Civil “Preponderance of the evidence”

· Conviction

· Civil / Administrative Sanctions

Homeland Security Investigations

Example: When is Technology Moved to Export Controlled Status

CUA Professor has been researching the phenomenon of the burning of gun powder and has been assisted at CUA using Graduate Students.

CUA Professor’s research is discovered by the US Army as a potential way to gain an advantage in the field of battle over an opposing Army. The Army hypothesizes that the gun powder can be contained and used to project an object in a weapons system.

Homeland Security Investigations

Example: When is Technology Moved to Export Controlled Status

• The US Army contracts with the CUA Professor to fund future research

• The US Army does not want this potential advantage to be discovered by opposing forces

• Export Control restrictions are written into the contractual documents

• (Access and Dissemination Controls)

Homeland Security Investigations

Potential Pitfalls

• Unknown Funding Source

• Less than thorough Contract Review

• Student Assignment w/out Review

• No Physical Access Controls of Research Facilities

• Foreign Travel / Delegations

• Foreign University Partnerships

• Lack of Expert Control Training

Homeland Security Investigations

· A policy statement demonstrating management’s commitment to export control.

· Identification of persons within the company who responsible for export

control.

· An up-to-date training program for employees with exports responsibilities.

· A program for maintaining records in compliance with export regulations.

Your Role in Compliance

Homeland Security Investigations

· Periodic internal review / audit of your company’s exports and systems.

· A procedure for dealing with violations / noncompliance of exports regulations.

· A strict policy of reporting suspicious orders or inquiries to HSI.

· Recognize potential illegal exports and diversion.

Your Role in Compliance

Homeland Security Investigations

· Businesses should screen prospective customers, vendors, suppliers, subcontractors, sales representatives, consultants, or any party to a proposed export/import transaction. The U.S. government has now provided one website for the following: ·Specially Designated Nationals – Office of Foreign Assets Control ·Denied Persons List – Commerce/Bureau of Industry & Security ·Debarred Parties List – Department of State http://www.export.gov/ecr/eg_main_023148.asp.

Screening

Homeland Security Investigations

Export Compliance Due Diligence/Screening

Be prepared to answer these questions about yourproducts or services:

∙What is the commodity?

∙Is the item listed on the USML or the CCL?

∙Does the item contain encryption?

∙Where is it going, what is the country of ultimate destination?

∙Who will receive it, who is the ultimate end-user?

Homeland Security Investigations

· U.A.E.

· Turkey

· Hong Kong

· Cyprus

· Jordan

· Malta

· Thailand

· Yemen

· Sudan

· Singapore

· Malaysia

· Pakistan

Transshipment Countries

Homeland Security Investigations

How to Respond to a Suspicious Contact

· Don’t slam the door

· Keep it neutral

· Obtain contact numbers or email

· Quickly contact HSI special agents for a controlled and monitored response.

Homeland Security Investigations

29

FIVE General phases to any export deal

1. Inquiry2. Negotiation3. Contracting & sales4. Shipping5. Warranty & maintenance

Homeland Security Investigations

Questions and Discussion

U.S. Department of Homeland Security

Homeland Security Investigations, Washington D.C.

Counter-Proliferation Investigations Center

Special Agent Chris Moore

24 Hrs: ICE TIP LINE: 1-800-973-2867

Desk: 703-326-6827

E-mail: Chris.Moore@ice.dhs.gov