The Department of Homeland Security’s Immigration and Customs Enforcement (ICE) continues to raise its presence in the enforcement of regulations with the aim to prevent sensitive U.S.-made weapons-capable technologies from getting into the hands of overseas terrorist and criminal groups, as well as sanctioned individuals and entities.
Leading this charge on behalf of the agency is its Counter-Proliferation Investigations (CPI) Program, which has been involved with export enforcement activities for the past three decades. Alysa Erichs, deputy executive associate director for ICE, told industry members of the Commercial Customs Operations Advisory Committee on Wednesday that the work of CPI continues to be a top priority for the agency.
ICE has long had the authority to investigate cross-border crime, including illegal exports. It uses a variety of measures to take down illegal exports, including border searches, detention and seizure, administrative subpoena, undercover operations and confidential informants.
In 2010, President Obama issued Executive Order 13558, which called on the establishment of the Export Enforcement Coordination Center requiring federal agencies with export enforcement oversight to “coordinate their efforts to detect, prevent, disrupt, investigate and prosecute violations of U.S. export control laws.” Today, the center is managed and operated as part of DHS’ Homeland Security Investigations and engages enforcement officials from the Commerce, State, Defense, Treasury and Energy departments, as well as the FBI and CIA.
Corporate export compliance officers might ask themselves why not just one export control agency instead of myriad federal agencies participating in this regulatory responsibility?
At the time of the executive order, the Obama administration announced the Export Control Reform as a means to modernize how the federal government manages export control regulations and improve enforcement coordination between agencies with export responsibilities. The first two phases of the reform focused on reconciling various definitions, regulations and policies for export controls, while the third and final phase called for the creation of a single control list, single licensing agency and unified information technology system, in addition to the Export Enforcement Coordination Center. Phases one and two are now mostly complete.
However, the goal of the reform was to create a single agency for export enforcement activities. While the concept of a single export enforcement agency for the nation sounds like a good idea on the surface, it’s probably better to continue having these different agencies, with their myriad missions and talents, working together through the Export Enforcement Coordination Center to take down what are often elaborate and deceitful schemes to illegally export U.S. technologies.
Take for example the recent case of California resident Si “Cathy” Chen, who was taken into custody in May 2017 and sentenced to 46 months in federal prison Monday for illegally exporting controlled space communications technology to China.
According to court documents, from March 2013 to the end of 2015, Chen purchased and smuggled sensitive items to China without obtaining licenses from the Commerce Department, which are required under International Emergency Economic Powers Act (IEEPA). Those items included components commonly used in military communications “jammers.” To avoid arousing suspicion, she undervalued the items on the shipping paperwork to negate the transparency of filing Automated Export System information. She also received payments for the illegal exports by using a family member’s bank account in China.
In addition to ICE, this investigation included agents from Commerce’s Office of Export Enforcement and the Defense Criminal Investigation Service, which further demonstrates the complexity with investigating these types of cases before an individual can actually be arrested and charged for wrongdoing.
It’s also cases like these that make it more important than ever for U.S. exporters to invest in the necessary resources to sharpen their internal compliance and have a clear understanding of all the federal agencies involved with U.S. export control regulations in order not to become entangled in the illicit behavior of an individual or overseas affiliate involving their products.