Export Control Violations: Man on Trial for Taking His Laptop to China

by Miller Canfield
Contact

Back in September 2011, Sixing Liu, a Chinese national-U.S. permanent resident, was charged by the U.S. Government for U.S. export control law violations. Liu allegedly took export-controlled technical data on military technology (Controlled Data) from his U.S. employer in New Jersey back to his home country of China on his laptop without a U.S. export control license. The Controlled Data was comprised of military technology, covered by Category XII of the ITAR U.S. Munitions List. The Controlled Data is used for target locators and navigation systems. Opening arguments for this case recently began on September 12, 2012.

The indictment made no allegations that the Controlled Data was actually disclosed by Liu to anyone in China, but rather simply the fact that Liu took the Controlled Data to China without a U.S. export control license constituted an export that was a violation of ITAR, whether disclosed or not.

In pursuing criminal liability, prosecution for the U.S. Government will attempt to prove that Liu had the requisite criminal intent, that is, he knew that taking his laptop to China with the Controlled Data on it was a violation of law.

According to the indictment, a U.S. customs agent at Newark Liberty International Airport noticed a VIP badge in Liu’s luggage from a Shanghai conference when Liu returned to the U.S. from China in November 2010. A secondary inspection revealed that his laptop had various documents on it comprising Controlled Data that belonged to the company where Liu worked as an engineer.

Further, according to the indictment

As part of his training at the Company, Liu received training concerning the safeguarding of sensitive proprietary and export-controlled information. In particular, on April 20, 2009, Liu attended a training program at the Company concerning provisions of the ITAR that prohibit the unlicensed export of items contained on the ITAR U.S. Munitions List and technical data relating to such items. Moreover, the Company regularly included prominent advisories on the pages of its work product warning that the contents may include technical data within the scope of ITAR. Due to the highly sensitive nature of the technology projects being developed where Liu worked, employees were forbidden from removing work product from the Company’s corporate facility.

“It’s not about taking work home,” the prosecution stated. “This is not an environment where you can do that.”

Mr. Liu’s defense characterized him as a worker who was ill-informed about U.S. export control laws who merely downloaded the Controlled Data to work on outside the company office. It was noted that Mr. Liu’s training in the U.S. export control compliance consisted of 15 minutes on his first day of work, between sessions on employee benefits and sexual harassment guidelines. This factual backdrop, though empathetic and of potential use for negating criminal intent, may not be sufficient to excuse Mr. Liu from civil liability and substantial fines under U.S. export control laws.

This factual backdrop about the seemingly insufficient amount of export control training may also serve as a basis for further investigation by export control enforcement authorities of the company itself.

This case illustrates the need to properly train employees on U.S. export control compliance when the employee initially commences employment and thereafter on an annual or semiannual basis. Emphasis should be given to the fact that export-controlled information cannot be downloaded on a laptop and then transferred outside the U.S. or even accessed from outside the U.S. without a license or other U.S. export control authorization. Doing so will encourage employee compliance with U.S. export control laws and place your company in a defensible position when dealing with export control enforcement authorities.

We will keep you apprised as this case progresses.

For further information please contact Miller Canfield’s Export Control Team. Visit our Export Controls webpage for prior articles and alerts, as well as subsequent updates on U.S. Export Control Reform and other export control articles.

Joseph D. Gustavus
+1.248.267.3317

 

Written by:

Miller Canfield
Contact
more
less

Miller Canfield on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.