U.S. State Dept. Discovers Illegal Re-exporting of GPS Equipment

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  Space News Business

U.S. State Dept. Discovers Illegal Re-exporting of GPS Equipment

By WILLIAM MATTHEWS

posted: 31 January 2007
03:26 pm ET



WASHINGTON – During a routine “end-use check” on a U.S. company’s 2005 sale of global positioning and navigation equipment to a buyer in the Arabian Gulf region, the U.S. State Department discovered that some of the equipment had been illegally re-exported.

 

The department seized the remaining GPS units and alerted the U.S. Department of Homeland Security, which obtained an arrest warrant for the company’s owner.

 

The State Department will not release details of the case, but says it uncovers illegal arms deals like this about 100 times a year.

 

A check on C-130 parts sold to an Asian firm for resale to a Middle Eastern customer revealed that the Asian firm had no contract with the buyer listed on the export license.

 

Three sales of F-16 fighter parts to
Pakistan
in 2003 turned up problems serious enough that the deal was deemed “unfavorable” by the State Department.

 

As defense trade organizations prepare to launch a lobbying assault on the State Department and Congress to ease arms export regulations, arms control advocates are countering with real-life examples of why the department’s oversight of arms sales should continue.

 

From unmanned aerial vehicles and helicopters to communications equipment, night-vision goggles and missile parts, there is strong demand worldwide for U.S.-made arms. But the international arms market is full of shady buyers and sellers.

 

The State Department has compiled a watch list of 130,000 companies and individuals whose past dealings are suspicious. Even some of the top U.S. defense contractors, including The Boeing Co., Lockheed Martin Corp., Raytheon Co. and Hughes Electronics Corp., have been slapped with multimillion-dollar fines in recent years for illegal arms exports, the State Department reports.

 

For now,
U.S.
arms trade controls remain “among the most rigorous in the world,” said Matthew Schroeder, chief of the Arms Sales Monitoring Project at the Federation of American Scientists. “Very few other countries care enough to do this kind of monitoring, and I don’t know of another government in the world that would release this kind of information.”

 

Arms exports are overseen by the State Department’s Directorate of Defense Trade Controls, which operates a program called Blue Lantern to check on what happens to weapons and military parts after they are exported.

 

The directorate publishes its findings in an annual report.

 

During 2006, for example, the Blue Lantern program examined 613 arms sales and issued “unfavorable” findings on more than 90 of them. Unfavorable findings can range from discovering phony buyers to ferreting out illegal arms and technology transfers to
China
and
Iran
.

 

The State Department reports 119 arrests, 92 indictments and 60 convictions for violations during 2006.

 

The arms sales examined by Blue Lantern represent a fraction of the tens of thousands of sales the State Department approves each year. They are selected for review based on “potential risk,” and do not represent a random sample of exports, the department says.

 

The percentage of violations found among the sales that are examined has remained fairly constant in recent years – about 20 percent – Schroeder said.

 

“The
United States
should be praised for its use of end-monitoring,” he said.

 

But defense industry representatives complain that the State Department’s oversight is onerous.

 

The Aerospace Industries Association (AIA), the National Association of Manufacturers and the Electronic Industries Alliance plan to push Congress for reforms.

 

A chief complaint is the State Department’s munitions list, a catalog of thousands of items – from firearms to electronic components – that require State Department approval for exporting.

 

The AIA, which is leading the reform effort, argues that the munitions list hurts
U.S.
exporters because it controls too many dual-use items that are sold for civilian as well as military uses. The list also limits exports of items that are widely produced outside the
United States
and not subject to
U.S.
controls, the AIA contends.

 

AIA President John Douglass said in December he hopes to get the
U.S.
government to convince the State Department and Congress to restrict fewer products and do a better job of managing the export of products that are restricted.

 

But Schroeder said the export violations the State Department turns up each year “are a reminder of the necessity for rigorous export controls. That’s the most important lesson with this next push for export control reform coming. If there’s going to be reform, it should not be in the form of relaxing export controls.”