This past week the Ninth Circuit Court of Appeals upheld the conviction of a man who exported thermal imaging cameras without proper licenses from the United States to China. Those who do not obtain such licenses from the United States Department of Commerce violate 50 U.S.C. 1705 a statute carrying criminal penalties under the International Emergency Economic Powers Act (IEEPA).

The Defendant in the case,United States v. Gou, was a Chinese engineer who had been unsuccessfully attempting for some time to purchase thermal imaging cameras. In late 2007 the Defendant was able to convince his accomplice to assist him in purchasing these cameras. These men, along with a third accomplice, were able to purchase thermal imaging cameras and send them to China. These activities were not licensed by the Department of Commerce.

The Defendant went to trial and was convicted. On appeal, he argued that IEEPA was unconstitutionally vague and violated due process. The court found this argument unpersuasive stating that although the export controls covering the export of the thermal imaging cameras constituted a complex regulatory scheme, if all the statutes and regulations are read together the law is not vague. In other words, the Ninth Circuit held that vagueness challenges will be rejected if premised on the complexity of a regulatory scheme.

In reaching this conclusion the Ninth Circuit articulated a test to determine vagueness as it relates to an IEEPA violation. The Ninth Circuit stated that, “the test is whether the text of the statute and its implementing regulations, read together, give ordinary citizens fair notice with respect to what the statute and regulations forbid, and whether the statute and regulations read together adequately provide for principled enforcement by making clear what conduct of the defendant violates the statutory scheme. City of Chicago v. Morales, 527 U.S. 41, 56 (1999).”

In essence, since the regulations, if read in their entirety, apprise individuals of what products cannot be shipped to other countries and apprise law enforcement of what goods are to be policed, they are not vague and satisfy constitutional requirements of due process. Furthermore, the Ninth Circuit stated that the scienter requirement within the IEEPA statute further protected against the complexity of the regulatory scheme, because that requirement placed upon the government the burden of proving beyond a reasonable doubt that a Defendant knew that he needed a license to export the products in question. In other words, in these types of cases ignorance of the licensing requirements is a defense.

The takeaway from the Guo case is that complexity and vagueness are not the same thing. Therefore, despite how complex the law may appear to be, parties are still required to follow it. This is bad news for those parties seeking to engage in international transactions; they not only need to know that export controls exist, they need to fully understand those laws. While the ignorance as a defense precedent is helpful to federal defense attorneys, as can be seen in the Guo case and others, the government time and time again has been able to meet the burden placed upon them when prosecuting IEEPA violations.

The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.

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