Policy of Denial Regarding ITAR Regulated Activities of EP Investments, LLC (a/k/a Blackwater)

AGENCY:

Department of State.

ACTION:

Notice.

SUMMARY:

Notice is hereby given that the Department of State has imposed a policy of denial with certain exceptions concerning EP Investments, LLC pursuant to section 38 of the Arms Export Control Act (AECA) (22 U.S.C. 2778) and section 126.7 of the International Traffic in Arms Regulations (ITAR). The Department of State is providing this information as a matter of courtesy to interested parties given the specific circumstances presented.

DATES:

Effective Date: December 2, 2008.

FOR FURTHER INFORMATION CONTACT:

David C. Trimble, Director, Office of Defense Trade Controls Compliance, Directorate of Defense Trade Controls, Bureau of Political-Military Affairs, Department of State (202) 663-2807.

SUPPLEMENTARY INFORMATION:

Section 126.7 of the ITAR provides that any application for an export license or other approval under the ITAR may be disapproved, and any license or other approval or exemption granted may be revoked, suspended, or amended without prior notice whenever, among other things, the Department of State believes that 22 U.S.C. 2778, any regulation contained in the ITAR, or the terms of any U.S. Government export authorization (including the terms of a manufacturing license or technical assistance agreement, or export authorization granted pursuant to the Export Administration Act, as amended) has been violated by any party to the export or other person having a significant interest in the transaction; or whenever the Department of State deems such action to be in furtherance of world peace, the national security or the foreign policy of the United States, or is otherwise advisable.

The Department of State has determined that a policy of denial regarding EP Investments, LLC (a/k/a Blackwater and hereafter referred to as EPI), including its subsidiaries or associated companies, is necessary to provide the U.S. Government with assurance that EPI is both capable and willing to comply with the AECA and ITAR and will do so. The Department recognizes the recent steps taken by EPI to improve its compliance program, for example setting up the Export Compliance Committee (ECC), and has tailored the policy of denial accordingly to leverage these measures by permitting certain exceptions to be made. The policy of denial is as follows:

(1) There is a presumption of denial for all new authorizations submitted by EPI, except concerning applications for licenses and other approvals that are in direct support to the U.S. Government, provided that EPI, or one of its subsidiaries listed in its registration, has a direct contract with the U.S. Government, and:

(a) Along with each application, EPI's Export Compliance Committee (ECC) submits a letter certifying to the accuracy of the information in the submission, and that the training and internal controls necessary to implement the authorization are in place;

(b) For each authorization, the ECC must provide reports to the Office of Defense Trade Controls Compliance (DTCC) thirty (30) and then sixty (60) days after export activities have commenced certifying that all provisions of the approval have been complied with, all training necessary to implement the authorization was done, and that appropriate internal controls are in place.

(2) All other new authorizations, those that are not in direct support of a U.S. Government contract, are subject to a presumption of denial. Transaction exception requests will be considered on a case by case basis as follows:

(a) The request for an exception to the denial policy must address why the request is based on overriding U.S. national security, foreign policy or law enforcement grounds or present other compelling reasons;

(b) Along with the request for an exception, the ECC must submit a letter certifying to the accuracy of the information in the application submission, and that the training and internal controls necessary to implement the authorization are in place; and

(c) If the transaction exception is granted, for each authorization, the ECC must provide reports to DTCC thirty (30) and then sixty (60) days after export activities have commenced certifying that all provisions of the approval have been complied with, all training necessary to implement the authorization was done, and that the appropriate internal controls are in place.

(3) EPI, including all of its subsidiaries, are considered ineligible to use ITAR exemptions. Transaction exception requests to use ITAR exemptions will be accepted and considered on a case by case basis.

(4) Current authorizations, licenses in support of current authorizations and minor amendments to existing authorizations will not be subject to a policy of denial.