Earlier this month, Erdal Kuyumcu, the CEO of Global Metallurgy, LLC, was arrested for allegedly exporting a cobalt-nickel metallic powder from the United States to Iran. According to the Department of Justice press release, Kuyumcu’s company planned to ship the metallic powder through an intermediary in Turkey in order to conceal the ultimate destination of Iran. If found guilty, Kuyumcu faces up to 20 years in prison and a $1 million fine.
The particular specialized metallic powder is used in a variety of aerospace, missile production and nuclear applications. Exports of this powder to Iran are illegal without a license from the U.S. Treasury Department. (And P.S. – Don’t even bother submitting a license application for exporting items that can be used for nuclear applications to Iran. It will be denied.) The press release states that Global Metallurgy conspired to export over a thousand pounds of the material to Iran via Turkey. The powder is classified with ECCN EAR99.
From the press release:
"U.S. export laws exist to prevent potentially dangerous goods and technology
from falling into the wrong hands,” said U.S. Attorney Capers. “Those who seek to evade the
scrutiny of the regulatory agencies by operating in the shadows present a danger to our national
security and our allies abroad. We will continue to use all of our law enforcement and national
security tools to hold such individuals and corporations accountable."
Kuyumcu, 44, is a U.S. citizen. According to the DOJ, he and a co-conspirator used coded language when discussing Iran in emails and other communication. For example, the government alleges that Kuyumcu referred to Iran as “the neighbor,” referring to the fact that Turkey shares a border with Iran. There is some speculation on other blogs about whether Kuyumcu’s reference to “the neighbor” necessarily implies that he had knowledge that the powder would be re-exported to Iran. It will be interesting to see how the government’s case against Kuyumcu and his company play out in federal court.
Tom Reynolds is the Vice President of Operations for Export Solutions, a consultancy firm which specializes in ITAR and EAR compliance.