Illegal Technology Transfer
The U.S. Government -- often in collaboration with its allies -- controls the export of certain technologies and commodities to countries that for various reasons are judged to be inappropriate recipients. The violation of these export controls is commonly referred to as illegal technology transfer. It is a criminal act and is a serious security concern.
The Arms Export Control Act regulates the export of U.S. arms and implements of war (including cryptography) and defense technology to proscribed countries that could misuse or cause illegal proliferation of those items. Such exports may be licensed only if their export will strengthen U.S. national security, promote foreign policy goals, or foster world peace. The Arms Export Control Act is administered by the Department of State's Office of Defense Trade Controls, through the International Traffic in Arms Regulations (ITAR) and the U.S. Munitions List. The Munitions List is a list of defense articles that require a license prior to export.
The Export Administration Act regulates the export of restricted dual-use technologies to countries where they may be used in ways that are inimical to U.S. interests. Dual-use technologies have both military and civilian applications. This includes, for example, certain technologies that are used for the manufacture or delivery of weapons of mass destruction. These export controls are administered by the Department of Commerce, Bureau of Industry and Security (BIS) through the Export Administration Regulations (EAR) and Commodity Control List. The Commodity Control List includes items from the Defense Department's Militarily Critical Technologies List
The BIS Office of Export Enforcement conducted more than 1,200 export enforcement investigations during the period between October 2003 and May 2005.These resulted in 49 arrests, 42 criminal convictions (with prosecution of the remaining cases ongoing) and criminal fines totaling $9.8 million. During that same period, it imposed more than $8.8 million in administrative penalties and other administrative sanctions as a result of more than 100 closed administrative enforcement cases. This information plus short case summaries of many of the convictions are available on the BIS web site at www.bis.doc.gov/ComplianceAndEnforcement/index.htm. At this site, click on Selected Major Export Enforcement Case Summaries.
In many cases of illegal technology transfer, the intended end-user is a country with which the United States has significant policy differences, but this is by no means always the case. Some friendly countries also try to avoid U.S. export controls in order to gain economic advantage or enhance their military capability vis-a-vis a hostile neighbor. The illegal end-user may also be a corporation or research institute rather than the national government. One outdated but still representative study of illegal technology transfer operations during the 12-year period from 1981 to 1993 identified 56 different end-user countries.1 The same study found as follows:
The initial buyer in illegal technology transfer operations is often a front company in the U.S. set up to acquire technology legally and then export it illegally to an unauthorized recipient.
To help U.S. businesses recognize indicators of possible intent to circumvent export regulations, the Department of Commerce's Bureau of Industry and Security developed the following check list: 2
The Bureau of Export Administration hotline for reporting suspected export violations is 1-800-424-2980.
Information on export controls is now available on the Internet in an up-to-date database at www.bis.doc.gov. This website contains the entire Export Administration Regulations (EAR), including the Commerce Control List, the Commerce Country Chart, and the Denied Persons List.
In checking the origin of any request for classified information, it may be useful to know whether the requesting organization has a DoD facility security clearance. The Defense Security Service maintains a database that enables any organization with a DoD facility clearance to check whether or not any other organization has such a clearance. It is called the Central Verification Activity (CVA) and can be accessed at www.dss.mil/infoutl/index.htm.