Statutory Debarment Under the International Traffic in Arms Regulations Involving Orbit/FR, Inc.

AGENCY:

Department of State.

ACTION:

Notice.

SUMMARY:

Notice is hereby given that Orbit/FR, Inc. is statutorily debarred pursuant to section 127.7 (c) of the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120-130). It shall be the policy of the Department of State to deny all export license applications and other requests for approval involving Orbit/FR, Inc. directly or indirectly.

EFFECTIVE DATE:

November 10, 1999.

FOR FURTHER INFORMATION CONTACT:

Eva O. Tyler, Acting Chief, Compliance Enforcement Branch, Office of Defense Trade Controls, Department of State (703-875-6644, Ext. 3).

SUPPLEMENTARY INFORMATION:

On November 10, 1999, Oribt/FR, Inc. pled guilty to two (2) counts of violating the Arms Export Control Act (AECA) (22 U.S.C. 2778) in the U.S. District Court, Eastern District of Pennsylvania. The information charges Orbit/FR, Inc. with illegally exporting components for an antenna and radome measurement system, AL-8098, also known as AL-8099 to the People's Republic of China and illegally furnishing a defense service involving the modification of the antenna measurement software so that the antenna measurement system would have sufficient accuracy to measure antennas on a Patriot-type missile system to the People's Republic of China. United States v. Orbit/FR, Inc., Eastern District of Pennsylvania, Criminal Docket No. CR 99-560.

Section 38(g)(4)(A) of the Arms Export Control Act (AECA), 22 U.S.C. 2778, prohibits licenses or other approvals for the export of defense articles and defense services to be issued to a person, or any party to the export, who has been convicted of violating certain U.S. criminal statutes, including the AECA. The term “person”, as defined in 22 CFR 120.14 of the International Traffic in Arms Regulations (ITAR), means a natural person as well as a corporation, business association, partnership, society, trust, or any other entity, organization or group, including governmental entities. The ITAR, specifically 126.7(e), defines the term “party to the export” to include the president, the chief executive officer, and other senior officers and officials of the license applicant; the freight forwarders or designated exporting agent of the license applicant; and any consignee or end-user of any item to be exported.

The ITAR, Section 127.7, authorizes the Assistant Secretary of State for Political-Military Affairs to prohibit certain persons convicted of violating, or conspiring to violate, the AECA, from participating directly or indirectly in the export of defense articles or in the furnishing of defense services for which a license or approval is required. Such a prohibition is referred to as a “statutory debarment,” which may be imposed on the basis of a judicial proceeding that resulted in a conviction for violating, or of conspiring to violate, the AECA. See 22 CFR 127.7(c). The period for debarment will normally be three years from the date of conviction. At the end of the debarment period, and possibly after a period of one year, licensing privileges may be reinstated at the request of the debarred person following the necessary interagency consultations, after a thorough review of the circumstances surrounding the conviction, and a finding that appropriate steps have been taken to mitigate any law enforcement concerns, as required by the AECA, 22 U.S.C. 2778(g)(4).

Statutory debarment is based solely upon a conviction in a criminal proceeding, conducted by a United States court. Thus, the administrative debarment procedures, as outlined in the ITAR, 22 CFR part 128, are not applicable in such cases.

The Department of State will not consider applications for licenses or requests for approvals that involve any person or any party to the export who has been convicted of violating, or of conspiring to violate, the AECA during the period of statutory debarment. Persons who have been statutorily debarred may appeal to the under Secretary for International Security Affairs for reconsideration of the ineligibility determination. A request for reconsideration must be submitted in writing within 30 days after a person has been informed of the adverse decision. 22 CFR 127.7(d).

The Department of State policy permits debarred persons to apply for reinstatement of export privileges one year after the date of the debarment, in accordance with the AECA, 22 U.S.C. 2778(g)(4)(A), and the ITAR, Section 127.7. A reinstatement request is made to the Director of the Office of Defense Trade Controls. Any decision to reinstate export privileges can be made only after the statutory requirements under Section 38(g)(4) of the AECA have been satisfied through a process administered by the Office of Defense Trade Controls. If reinstatement is granted, the debarment will be suspended.

Pursuant to the AECA, 22 U.S.C. 2778(g)(4)(A), and the ITAR, 22 CFR 127.7, the Assistant Secretary for Political-Military Affairs has statutorily debarred Orbit/FR, Inc. which has been convicted of violating the AECA. On November 10, 1999, Orbit/FR, Inc. was convicted of two counts of violating section 38 of the AECA.

Exceptions may be made to this denial policy on a case-by-case basis at the discretion of the Office of Defense Trade Controls. However, such an exception would be granted only after a full review of all circumstances, paying particular attention to the following factors: whether an exception is warranted by overriding U.S. foreign policy or national security interest; whether an exception would further law enforcement concerns which are not inconsistent with the foreign policy or national security interests of the United States; or, whether other compelling circumstances exist which are not inconsistent with the foreign policy or national security interests of the United States, and which do not conflict with law enforcement concerns.

This notice involves a foreign affairs function of the United States encompassed within the meaning of the military and foreign affairs exclusion of the Administrative Procedure Act. Because the exercise of this foreign affairs function is discretionary, it is excluded from review under the Administrative Procedure Act.