Every Monday we post the highlights out of last week’s FCC Export/Import Daily Update (“The Daily Bugle”). Send out every business day to approximately 8,500 readers of changes to defense and high-tech trade laws and regulations, The Daily Bugle is a free daily newsletter from Full Circle Compliance, edited by James E. Bartlett III, Salvatore Di Misa, and Elina Tsapouri.
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Last week’s highlights of The Daily Bugle included in this edition are:
- Federal Court Denies Motion to Suppress Evidence of ITAR Violation Seized from Defendant’s Laptop and iPhone; Monday, 7 Dec 2020; Item #5
- UK ECJU: “Notice to Exporters 2020/18: OGELs and MOD Authorisation Letters”; Tuesday, 8 Dec 2020; Item #9
- UK DIT Announces New Approach on US Tariffs; Wednesday, 9 Dec 2020; Item #5
- State Department: “ITAR Extension of Temporary Suspensions, Modifications and Exceptions”; Friday, 11 Dec 2020; Item #1
- EU Imposes Restrictive Measures Against Persons Acting in Violation Of The Arms Embargo Of Congo; Friday, 11 Dec 2020; Item #6
Federal Court Denies Motion to Suppress Evidence of ITAR Violation Seized from Defendant’s Laptop and iPhone
(Source: 2020 WL 7024650) [Excerpts]
* Case: United States v. SHUREN QIN et al.
* Court: U.S. District Court, D. Massachusetts; Criminal No. 18-cr-10205
* Date: Filed 30 Nov 2020
MEMORANDUM AND ORDER
* Judge: Denise J. Casper, U.S. District Judge
Defendant Shuren Qin (“Qin”) has moved to suppress evidence seized from his laptop computer and iPhone and statements he made to agents during a secondary inspection upon his return to the United States from China at Logan Airport on November 24, 2017. D. 212.
Having considered the evidence offered by the parties at an eight-days-long hearing (conducted on various dates between December 2019 and August 2020) and the arguments of counsel presented in their various filings and during the hearing, the Court DENIES the motion to suppress, D. 212.
At a minimum, the agents had reasonable suspicion for the search and seizure on November 24, 2017 and, any statements made by Qin were non-custodial statements not in contravention of the Fifth Amendment. In support of same, the Court makes its findings of fact and legal analysis below.
. . . .
- Fourth Amendment Does Not Warrant Suppression of the Electronic Devices Seized on November 24, 2017 at Logan Airport
- At a Minimum, Agents Had Reasonable Suspicion to Conduct the Search and Seizure on November 24, 2017
Pursuant to the Fourth Amendment, “[i]n the absence of a warrant, a search is reasonable only if it falls within a specific exception to the warrant requirement.” Carpenter v. United States, U.S. , 138 S. Ct. 2206, 2221 (2018); United States v. Wurie, 728 F.3d 1, 3 (1st Cir. 2013). The government, which bears the burden of showing that a warrantless search was reasonable, United States v. Bain, 874 F.3d 1, 17 (1st Cir. 2018), initially relies upon the border search exception for the search and seizure of Qin’s electronic devices at Logan Airport on November 24, 2017. D. 226 at 19. For reasons consistent with this Court’s ruling in Alasaad v. Nielson, 419 F. Supp.3d 142 (D. Mass. 2019), appeal pending, No. 20-1081 (1st Cir. Jan. 29, 2020), the Court rejects the government’s reliance on this exception here for what amounts to a non-routine search.8 The Court concludes, however, that the agents had, at a minimum, reasonable suspicion to search Qin’s electronic devices for contraband on November 24, 2017.
. . . .
Electronic devices “can contain digital contraband.” United States v. Cano, 934 F.3d 1002, 1014 (9th Cir. 2019) (emphasis in original); D. 226 at 35. That is certainly true here, where the export of technical data for controlled exports would be a violation of export laws in the same way that the underlying export would be. Such technical data were among the items and information that agents were concerned that Qin had obtained from U.S. manufacturers and were among the items that they sought in the grand jury subpoena to Marine Sonic, Exh. 9, before Qin was stopped at Logan on November 24, 2017, and later in the search warrant for the laptop and phone, Exh. 21, 23; IV:60, 67. DOC agents assisted in the search of the devices as the agents were “looking for any potential technical data that could turn up on his computer that could require a license from the Department of Commerce for the export of those documents.” VI:39; Exh. 38. Such technical data could be proprietary data, trade secrets, schematics, diagrams, technical know-how. V:71; VI:41, 47. If Qin had technical data on his devices when he went to China, it could constitute export violations. IV:60. It was reasonable for the agents to suspect same given the nature of Qin’s recent contact with U.S. manufacturers and that he was an authorized reseller of some manufacturers in China, IV: 95, including Marine Sonic. VII:87.
. . . .
2. Search and Seizure of Electronic Devices was Reasonable in Scope
Qin also challenges the reasonableness of the scope and duration of the border search of his electronic devices which extended sixty days after the November 24, 2017 encounter at Logan Airport. As with a stop and search under Terry v. Ohio, 392 U.S. 1, 30 (1968), the government must show that same was both “justified at [its] inception” and reasonable in terms of its scope. Id. at 6. It is well settled that the concept of the “border” extends beyond the actual border to the “functional equivalent of the border.” Kim, 103 F. Supp. 3d at 57. This is particularly true as to forensic search of electronic devices that cannot be conducted at the border. Molina-Gomez, 781 F.3d at 21.
The Supreme Court has not set a bright line for the detention of electronic devices at the border, declining any “hard-and-fast time limits,” but directing courts to assess the reasonableness of same in terms of “common sense and ordinary human experience.” United States v. Montoya de Hernandez, 473 U.S. 531, 543 (1985) (internal citation omitted). In concluding that the border search of electronics, including a laptop, did not become unreasonable during the twenty-two day detention of same, the First Circuit declined to “second guess the techniques used by the [forensic] lab” to require a faster alternative. Although the detention of Qin’s electronic devices was longer than in Molina-Gomez, there were circumstances here that warranted the longer detention.
First, a reasonable examination of Qin’s devices could not be conducted at Logan as SA Valentine explained. V:74-75.
Second, they determined that there was an extensive amount of data on the devices, some of the data on the laptop appeared to be encrypted and most of the data was in Mandarin. Although it took some time to attempt to get information that the agents thought they needed to access the encrypted files from Qin, most of the delay was attributed to their need to find a Mandarin speaking agent who could assist them in assessing the contents of the devices. It took until mid-December 2017 to have an agent from another city assigned to do so and it took her two trips to Boston in mid-December and then again in January 2018 to assist the agents.
The reasonableness of the detention of electronic devices have to assessed in terms of the circumstances presented in a particular case, see House v. Napolitano, 11-10852, 2012 WL 1038816, at *9-10 (D. Mass. Mar. 28, 2012) (denying motion to dismiss Fourth Amendment claim based upon the forty-nine-day detention of an electronic device at the border, but not reaching merits of whether detention was reasonable), and given the record here, the Court does not conclude the detention of the devices was unreasonable.
For all these reasons, the Court concludes that the search and seizure of Qin’s electronic devices did not violate the Fourth Amendment.
. . . .
V. Conclusion. For the aforementioned reasons, the Court DENIES Qin’s motion to suppress. So Ordered.
UK ECJU: “Notice to Exporters 2020/18: OGELs and MOD Authorisation Letters”
(Source: UK ECJU, 7 Dec 2020)
You may be experiencing delays in approval from MOD to enable use of 3 specific open general export licences. This is caused because applicants have not supplied the correct MOD Project Team contact details.
What you need to know
The 3 types of open general export licence that require UK exporters to obtain an approval letter from the MOD. These are:
- UK Government Defence Contracts, Military Goods
- Collaborative Project Typhoon and Military Goods
- Collaborative Project A400M
Before these OGELs can be used, exporters must obtain an authorisation letter from the MOD team in the Export Control Joint Unit (ECJU MOD). ECJU MOD will check that the exporter holds a defence contract with the relevant MOD Project Team (PT) before issuing a letter approving the use of the OGEL. You cannot use the OGEL without this letter.
The ECJU MOD team will not know the contact in the relevant MOD PT, due to the number of projects. Exporters, however, should hold current contact information. We need this to confirm that an exporter has a current contract with MOD.
Action to take
The process below to request an authorisation letter is straight forward and applies to both first time and renewal requests. Please note that for a first time request we advise you to apply for an authorisation letter immediately after the contract is awarded. For renewal requests you should apply at least one month in advance of your existing authorisation letter expiry date.
1) Requests should be sent by email to ECJU-MODTeam@mod.gov.uk.Do not send requests to any other address.
2) The request must contain the following information:
- the title of the OGEL you would like to use
- the OGEL reference number
- your full contact details including a telephone number
- full contact details of the PT which has awarded the contract. A current named contact, telephone number and e-mail address must be included
- the MOD contract name/reference number and the expiry date of the contract
Without this information ECJU MOD will be unable to process the request which will be returned to the requester to provide the missing information. This will lead to a delay in the exporter being able to use the OGEL.
If you are making the request on behalf of others in your organisation and do not know the current contact details of the PT, it is highly likely that your finance, commercial or contract functions will have the information.
When the required information is provided, a named contact in ECJU MOD will acknowledge receipt and process the request. We aim to process most requests within 10 working days. Please allow for this time to elapse before you chase your application.
For further information and assistance contact ECJU-MODTeam@mod.gov.uk
UK DIT Announces New Approach on US Tariffs
(Source: UK Department For International Trade, 8 Dec 2020)
The UK is today announcing an independent approach to the longstanding trade conflicts between the EU and US around steel and aluminium and aerospace tariffs.
To defend the UK steel industry, International Trade Secretary Liz Truss is rolling over tariffs in response to the unjustified ‘Section 232’ tariffs imposed by the US on aluminium and steel imports. These tariffs will continue from January 1st when the UK becomes an independent trading nation once again.
The Department for International Trade will launch a consultation to ensure these tariffs are shaped to UK interests and tailored to the UK economy, based on evidence and input from key stakeholders. Details of the scope and timing of the consultation will be confirmed in due course.
In parallel, the UK government is suspending retaliatory tariffs resulting from the Boeing dispute in an effort to bring the US towards a reasonable settlement and show that the UK is serious about reaching a negotiated outcome. The government reserves the right to impose tariffs at any point if satisfactory progress towards an agreeable settlement is not made.
The twin announcements are part of the government’s strategy to de-escalate trade tensions so the US and UK can move forward to the next phase of their trading relationship, and ultimately draw a line under a dispute that harms industry on both sides of the Atlantic.
International Trade Secretary Liz Truss said:
- As an independent trading nation once again, we finally have the ability to shape these tariffs to our interests and our economy, and to stand up for UK business.
- Ultimately, we want to de-escalate the conflict and come to a negotiated settlement so we can deepen our trading relationship with the US and draw a line under all this. We are protecting our steel industry against illegal and unfair tariffs – and will continue to do so – but are also showing the US we are serious about ending a dispute that benefits neither country.
S232 steel and aluminium measures
In 2018 the United States Government announced that under Section 232 of the US Trade Expansion Act of 1962 it would place tariffs on EU imports of steel and aluminium.
The ongoing tariffs are unjustified under WTO rules and unfairly target UK steel and aluminium manufacturers and should be removed. Any claim that UK steel and aluminium imports harm US national security is false and without foundation.
In response, the EU imposed counter-balancing measures on US products. A full list of products targeted is available online.
Airbus and Boeing disputes
In 2019 the WTO Appellate Body, the final court of appeal at the WTO definitively ruled that the US has continued to unlawfully subsidise aircraft manufacturer Boeing, causing significant harm to Airbus.
The WTO’s ruling in this 16 year-long dispute confirms that the United States has not complied with obligations to withdraw subsidies previously declared illegal by the WTO Appellate Body in 2012, adversely affecting the UK and EU aerospace industry.
Following the findings, in October the EU was authorised in a WTO arbitration and has gone on to place retaliatory tariffs on $4 billion worth of US products in the Boeing dispute.
State Department: “ITAR Extension of Temporary Suspensions, Modifications and Exceptions”
(Source: Federal Register, 11 Dec 2020) [Excerpts]
85 FR 79836: Rule
* AGENCY: Department of State.
* ACTION: Extension of temporary suspensions, modifications, and exceptions.
* SUMMARY: The Department of State is issuing this document to inform the public of a second extension to certain temporary suspensions, modifications, and exceptions to certain provisions of the International Traffic in Arms Regulations (ITAR) to provide for continued telework operations during the current SARS-COV2 public health emergency. This extension will terminate on June 30, 2021 unless otherwise extended in writing by the Directorate of Defense Trade Controls (DDTC). This action is taken in order to ensure continuity of operations among members of the regulated community.
* DATES: This document is issued December 11, 2020.
* FOR FURTHER INFORMATION CONTACT: Ms. Engda Wubneh, Office of Defense Trade Controls Policy, U.S. Department of State, telephone (202) 663-1809, or email firstname.lastname@example.org. ATTN: June 2021 Extension of Suspension, Modification, and Exception.
EU Imposes Restrictive Measures Against Persons Acting in Violation Of The Arms Embargo Of Congo
(Source: Official Journal of the European Union, 11 Dec 2020)
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union,
Having regard to Council Regulation (EC) No 1183/2005 of 18 July 2005 imposing certain specific restrictive measures directed against persons acting in violation of the arms embargo with regard to the Democratic Republic of Congo (1), and in particular Article 9 thereof,
Having regard to the proposal from the High Representative of the Union for Foreign Affairs and Security Policy,
(1) On 18 July 2005, the Council adopted Regulation (EC) No 1183/2005.
(2) Further to a review of the autonomous restrictive measures laid down in Article 2b of Regulation (EC) No 1183/2005, the statements of reasons relating to certain persons listed in Annex Ia to Regulation (EC) No 1183/2005 should be amended and one person should be removed from the list in that Annex.
(3) Regulation (EC) No 1183/2005 should therefore be amended accordingly,
HAS ADOPTED THIS REGULATION:
Article 1: Annex Ia to Regulation (EC) No 1183/2005 is replaced by the text appearing in the Annex to this Regulation.
Article 2: This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 10 December 2020.