DC Circuit Overturns Forwarder's Conviction for Export Control Violations, Says Unlawful Export Must Be Willful
Violations of the Arms Export Control Act require knowledge that the unlicensed exports were unlawful, and not just that the exporter knew their general conduct was illegal, the U.S. Court of Appeals for the District of Columbia Circuit said in an Aug. 20 decision. Vacating the conviction of a forwarder for Arms Export Control Act violations, the appeals court held that the lower court’s jury instructions were not specific enough and could have been misinterpreted to include knowledge of import violations in another country.
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Pheerayuth Burden was the owner of Wing-On, a forwarder that specialized in exporting from the U.S. to Thailand. Beginning in 2010, Kitibordee Yindeear-Rom, a Thai national living in Thailand, hired Wing-On to ship gun parts and accessories to Thailand, either by having Burden buy the gun parts in the U.S. or by placing the orders himself using a debit card attached to a U.S. bank account that Burden opened.
“Neither Burden nor Wing-On had a license to export defense articles on the Munitions List,” the appeals court said. Nonetheless, Wing-On exported five assault rifle magazines and a grenade-launcher mount without the required licenses. Yindeear-Rom was arrested in 2013 on a vacation to the U.S., pleaded guilty and was sentenced to three years in jail. Burden was subsequently arrested in May 2014, and convicted by the U.S. District Court for the District of Columbia following a three-week trial.
Burden appealed, contesting several aspects of the trial, including the instructions given by the court to the jury. Those instructions said that, in order to convict Burden, the government must prove that “beyond a reasonable doubt, by reference to facts and circumstances surrounding the case, that [Burden] knew that the conduct was unlawful,” though it was not necessary to prove that Burden had “consulted the licensing provisions of the Arms Export Control Act or the International Traffic in Arms Regulations, or the Munitions List.”
While Burden had admitted to Department of Homeland Security agents during their initial investigation that he mislabeled customs declarations for shipments containing gun parts, and hid the gun parts among other items for shipping, he said that he had only done so to evade Thai customs and avoid paying taxes on the gun parts. On the other hand, while there was some evidence that he willfully exported the gun parts without a license, there was also evidence to suggest that he thought he was shipping parts for toy Airsoft guns, and that no export license would be required, the appeals court said.
The D.C. Circuit agreed with the jury instructions in that Burden did not have to know the gun parts were on the U.S. Munitions List in order to have willfully exported them in violation of the Arms Export Control Act. That distinguishes AECA violations from cases involving criminal tax evasion or money structuring, wherein the defendant must have knowledge of the actual law in order to be found guilty, the appeals court said.
The instructions were too “ambiguous,” and because “the willfulness instruction required only that the defendants acted with knowledge that ‘the conduct’ was unlawful, ... there is some chance that the jury convicted based in part on defendants’ evasiveness in importing to Thailand,” it said. “It is natural enough that jurors who are told they may convict upon finding the defendants did the requisite act, so long as the defendant had a guilty mind, may not parse the object of the guilty mind.”
“On retrial, the instruction should make clear that an AECA conviction requires that defendants knew of the unlawfulness of the charged unlicensed export of the items from the United States, and that a willfulness finding cannot draw on evidence that they knew the related, but legally and factually distinct, import of those items into Thailand was illegal,” the appeals court said.”
The impact of the decision may be limited, according to a blog post by export control lawyer Christopher Stagg. “It is important to remember that the impact of this recent decision may be limited because it directly affects only criminal cases that appear in the U.S. District Court for the District of Columbia. Other circuits and district courts are not required to follow the D.C. Circuit’s instructions, although they may be persuaded by it. Moreover, there is also a circuit split concerning how to approach criminal intent under the ITAR,” he said. “Nevertheless, the Burden decision may provide criminal defendants with better legal authority to use when advocating what the jury instructions will state.”