In March of 1983, during a speech in Orlando, Florida, former President Ronald Reagan first used the phrase the “evil empire” to describe the Soviet Union. The phrase stuck, and a new era of emphasis on Export Regulations and Controls began. Stopping the USSR from acquiring U.S. technologies that could be used against us or could be used to advance the Soviet’s capabilities was at the front line of protecting our national security. At that time, the Soviets employed all the usual techniques to acquire the technology they needed to keep pace with the United States, including: outbound smuggling, false declarations, front companies, diversions, etc.
For those of us involved in export controls at that time, there were two theories of how to succeed and protect our national security: (1) Stop the Soviets from getting any U.S. technology; or (2) Make it so difficult and costly to acquire it, that it would further erode the crumbing economic base of the Soviet Union. Whichever theory was correct, it worked, and by 1988, based upon Gorbachev's perestroika and glasnost reforms, President Reagan admitted that the term “evil empire” was now a description for a previous era.
Shades of the Past
Earlier this month, Justice Department prosecutors announced that charges had been brought forward against two Russians (Dmitrii Aleksandrovich Karpenko and Alexey Krutilin) and one U.S. citizen (Alexey Barysheff) for illegally exporting technology used in military devices to Russia. The charge alleged that Alexey Barysheff had registered two technology “front companies” and used them to acquire microelectronics (classified as export controlled military technologies) from U.S. manufacturers and suppliers. These companies declared to the sellers that the end destination was Finland. The microelectronics involved included digital-to-analog converters and integrated circuits used in a wide range of military systems, including radar and missile-guidance systems. Once the purchases had been made, the three individuals would then export the items to Finland and then divert them to Russia.
Sound familiar? The events of today are a good reminder that “evil empires” bent on acquiring our technologies have never really gone away. Compliance with export regulations and our due diligence remain as some of the best ways to protect our national security – then, and now.
Jim McShane is a Sr. Consultant, Trade Compliance for Export Solutions -- a full-service consulting firm specializing in ITAR and EAR regulations.