Making False Statements…..We Cannot Do it, but U.S. Customs Can.

For the second time in the past two years, TSI Global Consulting has been asked to assist a non-governmental organization that got caught in the snare of U.S. Customs and Border Patrol Outbound Enforcement when attempting to export, without a license, an 0A606 military cargo truck to an undisclosed developing world destination for Humanitarian use. Apparently, there seems to be a lot of confusion as freight forwarders, even those who are specialized in the export of vehicles, are making an errant assumption that all non-armored vehicles, including non-weaponized ruggedized cargo trucks are EAR99. Reality is, all too often, the trucks in question are ex-military vehicles that were sold as government surplus in the domestic market. International Development NGOs love these trucks because they can navigate rough developing country terrain. Problem is, after the trucks change hands a few times here in the USA, the paperwork and warnings on export controls seem to get lost in the shuffle. In this particular case, the truck that was seized by US Customs was supposed to be used to ferry school children from rural areas in the tropical rain forest of a Latin American country to the nearest public schools. Instead, the truck has been sitting for months in a U.S. government warehouse piling up storage fees. But that is not the worst of it. Get this, on page one of the formal seizure letter issued to the parties to the transaction by CBP the letter stated:

Defense articles and defense services are listed on the U.S. Munitions List contained in Part 121 of the International Traffic in Arms Regulations. Under provision 22 USC Part 2778, Control of Arms Export and Import Act any person(s) exporting defense articles are required to report the item that is being exported, reexport shall contain all shipment information, including a description of the item, port of export, and end user and country of destination, of the item. The reporting shall be to the U.S. Customs and Border Protection using the Automated Export System or directly to the Directorate of Defense Trade Control with license and registration filed before leaving the U.S. port.”

The same letter states [in all capital letters] “A FALSE STATEMENT MAY SUBJECT A PERSON TO PROSECUTION UNDER TITLE 18, USC, SECTION 1001 AND/OR 1621 AND MAY BE PUNISHABLE BY FINE OR IMPRISONMENT.”

Wow, the problem here is U.S. Customs made a major false statement in their own letter! You see, de-militarized cargo trucks that were originally designed for military use are NOT subject to the ITAR. Sorry Customs but the truck in question is an ECCN 0A606 ex-military cargo truck listed on the Commerce Control List and its listing on the CCL even pre-dates export control reform.  So, by assuming that all military trucks are ITAR controlled, apparently CBP does not understand the regulations that they themselves are supposed to enforce!

Beyond that major glitch, the real issue is, does it make any sense to use valuable U.S. government resources to seize a fifteen year old military truck that was sold off at surplus auction, has gone through several owners and is headed for humanitarian use in the tropical rainforest of Latin America for international development work? I suppose the concern is that ISIS may be operating in the tropical rainforest of Latin America for a possible overthrow of indigenous Andean tribal peoples? Bottom line is this is a clear case of U.S. government overreach and a poor use of taxpayer dollars. As for U.S. Customs using boilerplate letters that provide incorrect guidance laced with false factual data; the practice smacks of hypocrisy. We citizens go to prison for making false statements while the US government makes false statements on their own official guidance issued to exporters on an export compliance enforcement case! I suppose one could say, perhaps it is time for CBP to take a close look at their own practices before yelling fire in a crowded theater.

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