|Obama Extends Export Regulation
8/13. President Obama issued another in a long series of perfunctory declarations of
emergency with respect to regulation of exports. These declarations are issued to justify
the continuing enforcement of the export regulations of the Department of Commerce's (DOC)
Bureau of Industry and Security (BIS). These regulations
implement the Export Administration Act of 1979, which expired in 2001.
The White House news office also announced a forthcoming review of export
regulation, to be conducted within the Executive Office of the President (EOP).
There were serious efforts to write an export control statute in 2000 and
2001. Sen. Mike Enzi (R-WY) was active in
the Senate. Rep. David Dreier (R-CA) was
active in the House. However, no bill was enacted, and there has been little
effort since the terrorist attacks of September 11, 2001. Hence, the U.S.
maintains a regulatory regime without a statute. Former President Bush, and now
President Obama, perpetuate this regime with their annual declarations.
The BIS regulates, among other things, exports and "deemed exports" of dual
use items, such as computers, software, and encryption products, as well as some
The just issued declaration states that "On August 17, 2001, consistent with
the authority provided to the President under the International Emergency
Economic Powers Act (50 U.S.C. 1701 et seq.), the President issued Executive
Order 13222. In that order, he declared a national emergency with respect to the
unusual and extraordinary threat to the national
security, foreign policy, and economy of the United States in light of the
expiration of the Export Administration Act of 1979, as amended (50 U.S.C. App.
2401 et seq.). Because the Export Administration Act has not been renewed by the
Congress, the national emergency declared on August 17, 2001, must continue in
effect beyond August 17, 2009. Therefore, in accordance with section 202(d) of
the National Emergencies Act (50 U.S.C. 1622(d)), I am continuing for 1 year the
national emergency declared in Executive Order 13222." See,
the Federal Register, August 14, 2009, Vol. 74, No. 156, at Pages 41323-41325.
The White House news office also issued a
release, which states that "Today, the President extended the authority for
Department of Commerce-administered export controls. In addition, the President
has directed that the NEC/NSC launch a broad-based interagency process for
reviewing the overall U.S. export control system, including both the dual-use
and defense trade processes. The aim of the review is to consider reforms to the
system to enhance the national security, foreign policy, and economic security
interests of the United States. The US has one of the most robust export control
systems in the world. But, it is rooted in the Cold War era of over 50 years ago
and must be updated to address the threats we face today and the changing
economic and technological landscape."
The NEC is the
National Economic Council. The NSC is the
Council. Both are within the EOP.
Neither the declaration nor the notice reference regulation of encryption products. See
also, stories titled "Obama Picks Encryption Opponent for ODNI General Counsel",
"What Robert Litt Had to Say About Encryption" and "TLJ Coverage of Encryption
Policy Debates: 1998-2000" in
TLJ Daily E-Mail
Alert No. 1,929, April 20, 2009. The Senate confirmed
Robert Litt in June.
|More Export Regulation News
8/14. The Department of Commerce's (DOC) Bureau of
Industry and Security (BIS), which regulates exports, announced in a
release that it
fined RF Micro Devices, Inc. $190,000
for exporting spread spectrum modems to the People's Republic of China.
8/11. The Department of Commerce's (DOC) Bureau of
Industry and Security (BIS) published a
notice in the Federal Register
that announces, describes, recites, and sets the comment deadline (September 25, 2009) for,
it proposed rules changes regarding the export of crime control items. These proposed rules
pertain pertain to non-information technology related items, including as "Gallows and
guillotines" and "electric chairs". This notice also announces that "In
one or more subsequent stages, BIS intends to address more complex Commerce Control List
matters such as whether, and, if so, the extent to which biometric measuring devices,
integrated data systems, simulators, and communications equipment should be listed on the
Commerce Control List; the degree to which software and technology related to commodities
on the Commerce Control List should be listed and how such software and technology should be
described; and general policy issues such as whether the range of destinations to which crime
control license requirements apply should be modified." However, this notice does not
request comments, or announce any hearings, on these matters. See, Federal Register, August
11, 2009, Vol. 74, No. 153, at Pages 40117-40121.
|Pioneer of Offshore Internet Gambling Pleads
Guilty to RICO and Wire Act Charges
8/13. Gary Stephen Kaplan pled guilty in
U.S. District Court (EDMo) to
violation of the RICO Act and Wire Act in connection with his operation of an
offshore and unprotected gambling business. It took bets online and via telephone.
The Federal Bureau of Investigation's (FBI)
John Gillies stated in a Department of Justice (DOJ)
the Kaplan was "one of the pioneers of illegal online gambling". Gillies also
boasted about taking down someone who was "making it too easy for people to
gamble away their hard earned money".
Yet, while Kaplan was targeted for his gambling operation, he was taken down on RICO
Act and Wire Act charges. Gambling is legal, protected, and regulated in the U.S.
The DOJ stated in its release that Kaplan's business, BetOnSports, or BOS,
"was highly successful", employed as many as 1,700 people, and in 2004 had
"close to one million registered customers". The DOJ added that in 2004 "Kaplan
made a successful public offering of the stock of BetOnSports on the London
Alternative Investment Market that netted him over $100,000,000."
Although, BOS failed following Kaplan's arrest and indictment in 2007. He has
been held without bond since then.
He pled guilty on August 13 to conspiracy to violate the Racketeer Influenced
and Corrupt Organizations (RICO) Act, which is codified at
18 U.S.C. §§ 1951-1960, conspiracy violate the Wire Act, which is codified at
18 U.S.C. § 1084, and violation of the Wire Act.
The DOJ added there is a plea agreement under which Kaplan will pay
$43,650,000 to the government, and serve 41 to 51 months in prison. He has
already served about 30 months.
The DOJ stated that Kaplan located his business first on the Caribbean
islands of Aruba and Antigua, and later in the Central American nation of Costa Rica.
It continued that he provided gambling services to U.S. residents "through
Internet Web sites and toll-free telephone numbers". Moreover, the DOJ
explained, "BetOnSports-related entities controlled toll free numbers and domain
names advertised by BetOnSports. Technologically, Kaplan’s toll-free telephone
lines terminated in Houston or Miami, and then were forwarded to Costa Rica by
satellite transmitter or fiber-optic cable. Some of Kaplan’s Web servers were
located in Miami and were remotely controlled from Costa Rica. U.S. residents
became customers of BetOnSports by depositing funds on account and placing
wagers over U.S. toll-free telephone lines and via the Internet using the
deposited funds. Funds were sent from the U.S. customers to BoS operations
outside the United States and BoS sent winnings from outside the United States
to its U.S. customers."
The Wire Act does not illegalize gambling. No federal statute illegalizes
gambling. The subject is left to the states. In some states the gambling sector
is a major component of the local economy, and supplies a critical part of the
tax revenues. Many states and localities are providers of gambling services,
which raise substantial revenues for government operations. Offshore internet
gambling operations compete with these protected forms of gambling.
The Wire Act only illegalizes the use of interstate wire communications in
gambling businesses. It provides, in part, that "Whoever
being engaged in the business of betting or wagering knowingly uses a wire
communication facility for the transmission in interstate or foreign commerce of
bets or wagers or information assisting in the placing of bets or wagers on any
sporting event or contest, or for the transmission of a wire communication which
entitles the recipient to receive money or credit as a result of bets or wagers,
or for information assisting in the placing of bets or wagers, shall be fined
under this title or imprisoned not more than two years, or both."
The U.S. has also carved out exceptions. This has
resulted in a World Trade Organization (WTO)
holding that the U.S. gambling regulatory regime, which carves out no exceptions
for offshore gambling businesses, discriminate against foreign internet gambling
businesses in violation of the U.S.'s WTO obligations. See, stories
titled "WTO Panel Instructs Congress to Amend Wire Act to Legalize Internet
Gambling" in TLJ
Daily E-Mail Alert 1,016, November 11, 2004, and "WTO Allows Offshore Nation
not to Enforce US IPR as Damages for US Protection of Onshore Internet Gambling"
in TLJ Daily E-Mail
Alert No. 1,692, December 21, 2007.
Some Senators and Representatives worked to enact
legislation beginning in the late 1990s to illegalize internet gambling.
Rep. Bob Goodlatte (R-VA) and
Sen. Jon Kyl (R-AZ) were active in these efforts.
They failed, even after conceding numerous limitations and exceptions in their bills.
Proponents of some form of regulation did succeed in enacting the
Internet Gambling Enforcement Act" (UIGEA) in the
109th Congress. The UIGEA attempts to stop internet gambling by
regulating the financial transactions that fund what already constitutes
unlawful internet gambling. It provides that no one engaged in the "business of
betting or wagering" may knowingly accept certain financial transactions,
including checks, electronic fund transfers, and credit card debt, in connection
with "unlawful Internet gambling". It was enacted as part of a large bill,
(109th), the "Port Security Improvement Act of 2006".
See also, story titled "House Approves Unlawful Internet Gambling Enforcement
Act" in TLJ Daily
E-Mail Alert No. 1,408, July 11, 2006, and
titled "House Financial Services Committee Approves Internet Gambling Bill" in
TLJ Daily E-Mail
Alert No. 1,330, March 16, 2006.
With the passage of the UIGEA and the Democratic
takeover of the House and Senate, all significant efforts to further limit or
regulate internet gambling died. Moreover,
Rep. Barney Frank (D-MA), the Chairman of the House Financial Services
Committee, which has jurisdiction over bills such as the UIGEA, is an outspoken
libertarian on gambling issues. Similarly,
Rep. John Conyers (D-MI), the
Chairman of the House Judiciary Committee
(HJC), which has jurisdiction over bills related to crimes, has differed with
Rep. Goodlatte (also a HJC member) on gambling issues.
|This issue contains the following items:
• Obama Extends Export Regulation
• More Export Regulation News
• Pioneer of Offshore Internet Gambling Pleads Guilty to RICO and Wire Act Charges
• More News
New items are highlighted in
|Tuesday, August 18
The House will not meet. It will return
from its August recess on September 8.
The Senate will not meet. It will return from its August recess on
6:00 PM. Deadline to submit applications to the
Federal Communications Commission (FCC) to participate in Auction 86.
See, notice in
the Federal Register, July 30, 2009, Vol. 74, No. 145, at Pages 38018-38033.
Auction 86 pertains to licenses for unassigned Broadband Radio Service (BR)
spectrum. This auction is scheduled to begin on October 27, 2009.
|Wednesday, August 19
Deadline to submit reply comments to the Federal Communications
Commission (FCC) in response to its Further Notice of Proposed Rulemaking regarding
reinstating an exemption for 4.9 GHz band applications from coordination via a certified
frequency coordinator. This item is FCC 09-29 in WP Docket No. 07-100. See,
notice in the
Federal Register, May 21, 2009, Vol. 74, No. 97, at Pages 23816-23822.
|Thursday, August 20
1:00 - 2:30 PM ET. The American Bar Association will
host a panel discussion by teleconference and webcast titled "Upgrade to
Outlook 2007 and Upgrade Your Client Retention". See,
notice. Prices vary.
5:00 PM. Extended deadline to submit applications
under the Broadband Initiatives Program (BIP) and the Broadband
Technology Opportunities Program (BTOP). This extension only applies to
electronic applications pending as of 5:00 PM ET on August 14, 2009. See,
notice in the
Federal Register, August 18, 2009, Vol. 74, No. 158, at Page 41676.
|Friday, August 21
Deadline to submit comments to the
National Telecommunications and Information
Administration (NTIA) in response to its Notice of Inquiry (NOI) regarding
implementation of the Commercial Spectrum Enhancement Act (CSEA) and
relocation of federal systems in the 1710-1755 MHz band. See,
notice in the
Federal Register, July 7, 2009, Vol. 74, No. 128, at Pages 32131-32138.
Deadline to submit initial comments to the
Federal Communications Commission (FCC) in response to its notice of proposed rulemaking
(NPRM) regarding authorizing channels with bandwidths of as much as 30 MHz in the
6525-6875 MHz band, and allowing conditional authority on additional channels in the
21.8-22.0 GHz and 23.0-23.2 GHz band. The FCC adopted and released this
pages in PDF] on June 29, 2009. It is FCC 09-58 in WT Docket No. 09-114 and RM 11417.
See, notice in the
Federal Register, July 22, 2009, Vol. 74, No. 139, at Pages 36134-36139.
|Monday, August 24
Deadline to submit comments to the Department of Homeland Security's (DHS)
U.S. Citizenship and Immigration Services (USCIS) regarding "the E-Verify Program
Designated Agent Process under which a participating employer may choose to outsource
submission of employment eligibility verification queries for newly hired employees to
a Designated Agent". See,
notice in the Federal Register, June 23, 2009, Vol. 74, No. 119, at Page 29711.
|Tuesday, August 25
6:00 - 9:15 PM. The DC
Bar Association will host an event titled "How to Recognize
Critical Software Intellectual Property Issues in Everyday Practice".
The speakers will be David Temeles (Bean Kinney & Korman) and Todd Trivett
(Jeff Parmet & Associates). The price
to attend ranges from $89 to $129. Most DC Bar events are not open to the public. See,
notice. Location: DC Bar Conference Center, 1101 K St., NW.
Deadline to submit comments to the U.S.
Patent and Trademark Office (USPTO) regarding complaints concerning invention promoters
and responses from the invention promoters to these complaints. See,
notice in the
Federal Register, June 26, 2009, Vol. 74, No. 122, at Pages 30528-30529.
|Wednesday, August 26
No events listed.
8/13. The National Institute of Standards and Technology's
(NIST) Computer Security Division (CSD) released its draft
SP 800-73 -3 titled
"Interfaces for Personal Identity Verification". September
13, 2009, is the deadline to submit comments.
8/12. The Copyright Office (CO) published a
notice in the
Federal Register that announces, describes, and attaches four agreements which
set rates and terms for the reproduction and performance of sound recordings
made by certain webcasters under two statutory licenses. This notice adds that "Webcasters
who meet the eligibility requirements may choose to operate under the statutory
licenses in accordance with the rates and terms set forth in the agreements
published herein rather than the rates and terms of any determination by the
Copyright Royalty Judges." See, Federal Register, August 12, 2009, Vol. 74, No.
154, at Pages 40614-40628.
8/11. The National Institute of Standards and Technology's
(NIST) Computer Security Division (CSD) released its
NIST IR 7581 [32 pages in PDF] titled "System and Network Security Acronyms and
Abbreviations". September 11, 2009, is deadline to submit comments.
8/10. The Copyright Office (CO) published a
notice in the
Federal Register that announces, describes, recites, and sets the effective
dates for, its interim rule regarding "Special Handling of Pending Claims
Requiring Expedited Processing for purposes of Litigation". This rule is
effective from August 10, 2009 through July 1, 2011. See, Federal Register,
August 10, 2009, Vol. 74, No. 152, at Pages 39900-39903.
|About Tech Law
Tech Law Journal publishes a free access web site and
a subscription e-mail alert. The basic rate for a subscription
to the TLJ Daily E-Mail Alert is $250 per year for a single
recipient. There are discounts for subscribers with multiple
Free one month trial subscriptions are available. Also,
free subscriptions are available for journalists, federal
elected officials, and employees of the Congress, courts, and
executive branch. The TLJ web site is free access. However,
copies of the TLJ Daily E-Mail Alert are not published in the
web site until two months after writing.
For information about subscriptions, see
subscription information page.
Tech Law Journal now accepts credit card payments. See, TLJ
card payments page.
TLJ is published by
carney at techlawjournal dot com
P.O. Box 4851, Washington DC, 20008.
Copyright 1998-2009 David Carney. All rights reserved.