- Robert S. Mueller, III
- Federal Bureau of Investigation
- U.S. Department of Commerce, Bureau of Industry and Security Annual Update Conference on Export Controls and Policy
- Washington, D.C.
- July 18, 2012
Remarks prepared for delivery.
Good afternoon. I would like to thank Under Secretary Hirschhorn for inviting me here today. I must say I am honored to join you.
Today, I would like to discuss the threat of illegal exports from the FBI’s perspective and the resources the FBI brings to the table. I would also like to touch on the importance of partnerships with those of you in the private sector.
We in the FBI often talk about how globalization has changed the way we do business. It is the rare case today that does not have some global nexus.
Globalization has impacted the way you do business as well. Increasingly, the U.S. economy rests upon the success of American businesses in the global marketplace.
Globalization has leveled the playing field for all of us. Advances in technology, travel, commerce, and communications have broken down barriers among nations and among individuals.
These advances have made it easier to conduct business anywhere in the world. But that same globalization has opened the door to our adversaries. Terrorists who are willing and able to strike around the world. Computer hackers who seek trade secrets and state secrets. Child predators who seek to exploit the most vulnerable amongst us. And criminals and spies who seek access to U.S.-manufactured components, either to gain a military advantage or to build weapons of mass destruction.
Yet this is not the first time globalization has changed the game. In the ancient world, spices were the coin of the realm. They were difficult to transport, they were expensive to buy, and as a result, they were highly coveted.
Nutmeg was worth more than gold. Roman soldiers were paid in salt; London dockworkers were paid in cloves. Even as far back as 410 A.D., when the Visigoths sacked Rome, they demanded 3,000 pounds of peppercorns as ransom…though I am not quite sure what one does with 3,000 pounds of peppercorns.
Indeed, the spice trade was once the world’s biggest industry. But in the 15th century, the Age of Discovery transformed international travel and the spice trade. The advent of navigational equipment made distance sailing a reality, opening up trade routes around the globe. Farmers began to grow spices from other parts of the world. And as spices became more common, their value fell, and monopolies began to crumble. Globalization 1.0, one might say.
Today, one could argue that we have moved well beyond globalization 2.0. We are hyper-connected in terms of communication and commerce. But our fears no longer rest on a monopoly of the spice market or who might reach the West Indies first.
Our fears rest with the individual, organization, or nation that might possess the components for a ballistic missile…the radio frequency modules for an explosive device…or the material for a nuclear bomb.
The proliferation of weapons of mass destruction is one of the FBI’s top threats. For this reason, preventing our adversaries from obtaining protected technology and information is one of our highest priorities. Export controls ensure that select individuals, organizations, or nations cannot buy protected items, such as components used in military satellite communications or materials used to create nuclear weapons. Consequently, our adversaries routinely evade our export laws to obtain such protected items.
They may use front companies or technology brokers, through which they reroute shipments and falsify export documents. They may target dual-use items that have both legitimate and illicit uses to arouse less suspicion.
Each of these scenarios presents a serious national security threat.
In today’s world of web-based purchases and deals struck over e-mail, it may be difficult for you, as an exporter, to know with whom you are dealing. While your customer may say that the goods are destined for a neutral nation, they may be bound for an embargoed country…or for an individual or an organization prohibited from receiving U.S. exports without the required licenses.
Much like the phishing schemes so rampant in the cyber world, those seeking illicit exports will often e-mail requests for quotes to dozens of suppliers at once. The law of averages holds that at least one company will take the bait.
We do recognize that genuine mistakes do occur. In many instances, there is no knowledge on the part of the exporter that a violation is underway. That is one reason why these cases are so challenging for us.
I would like to take a moment here to address an issue that is distinct from export controls, but important for you to be aware of nonetheless. That is the insider threat—employees with legitimate access to your proprietary information.
These insiders may steal company property for sale to the highest bidder, or for the benefit of a foreign nation. The end-user might attempt to reverse engineer and re-manufacture controlled products. All of this not only presents a national security threat, it threatens to undercut the United States economy.
By way of example, Chinese national Chi Mak was sent to the United States from China in 1978. He was directed to obtain employment in the defense industry.
For more than 20 years, Chi Mak passed information to the Chinese government, including information on quiet electric propulsion systems for the next generation of U.S. submarines, complex radar systems, and stealth ships developed by the United States Navy. He recruited family members to courier the information back to China.
In 2007, he was convicted of attempting to violate export control laws, among several other charges, and was sentenced to more than 24 years in prison.
Now, what does the FBI bring to the table? We are one of several agencies responsible for the enforcement of export control laws and regulations. Our primary interest relates to export matters with a national security nexus.
But we do not work in isolation. To protect national security assets and to prevent the illegal export of restricted materials, we must—and we do—work in concert with the Departments of Commerce, Homeland Security, and Defense and our other intelligence community partners at home and abroad.
In addition to our resources dedicated to countering espionage and insider threats, one year ago we established the Counterproliferation Center at FBI Headquarters. This center brings together the expertise of our Weapons of Mass Destruction and Counterintelligence Divisions to prevent the illegal export of protected United States goods. And we are making progress. We now have more than 1,500 pending cases, and in the past year, we made several high-value arrests and witnessed a significant increase in disruptions.
One recent case, called Wintry Blast, was opened when our Minneapolis Field Office uncovered a major Iranian procurement network operating through front companies in Asia. The network was seeking export-controlled U.S. technology for the Iranian military and for Iran’s ballistic missile programs.
In September 2010, five individuals and four of their companies were indicted for participating in the illegal export of military-grade restricted antennas and 6,000 radio frequency modules. Sixteen of those modules were found in unexploded bombs and in weapons caches in Iraq.
Last October, officials in Singapore arrested four of the five defendants—all citizens of Singapore. We continue to seek their extradition to the United States. The fifth defendant—an Iranian national—remains at large.
We would not have been successful without our strong partnership with the Departments of Commerce and Homeland Security and our counterparts in Singapore.
But just as we develop sophisticated tradecraft, so, too, do those individuals who seek our protected technology.
To stay ahead of our adversaries, we must continue to work with partners at home and abroad. And we must constantly improve our efforts to counter the threat, always remaining within the limits of the Constitution and the rule of law.
Turning to the importance of private sector partnerships…
Close working relationships with our federal and international partners are but one aspect of our efforts to prevent illegal exports. Our partnerships with those of you in the private sector are equally important.
Proliferation networks are sophisticated and far-reaching. They use deceptive practices and they frequently work in concert with a web of associates to disguise their true activities.
We are working hard to disrupt, neutralize, and eliminate these networks, and we need your help.
Through the FBI’s InfraGard program, individuals in law enforcement, government, and the private sector, as well as academia, meet to talk about how best to protect our country’s critical infrastructure and key resources.
Since its inception in 1996, InfraGard has grown from a single chapter in the Cleveland Field Office to 88 chapters around the country, with more than 51,000 members. Members have access to an FBI secure communications network through which we disseminate threat alerts, advisories, and intelligence products.
There are also several special interest groups within InfraGard, including one that is focused on research and technology protection. This group works to share relevant information with members so that we can better protect our collective research and technology.
Beyond InfraGard, our Counterintelligence and Weapons of Mass Destruction Divisions run a number of partnership initiatives. We have a partnership coordinator in each of our 56 field offices to inform you about foreign intelligence threats to your research, your products, and your personnel.
Another such initiative addresses the synthetic biology sector. We are working with biology companies to protect the new technology that enables the synthetic generation of DNA sequences. Together, we have developed procedures to screen unusual purchases…and we have created a reporting mechanism for suspicious orders that may pose a threat.
This is complex, high-stakes technology. But though the technology itself is complex, and the threat is ever changing, one thing is clear—we must continue to work together if we are to be successful in preventing illegal exports and protecting national security.
Your companies are ripe for targeting, but your vigilance can go a long way toward recognizing potential threats.
Be aware of red flags. If a customer is willing to pay cash for an expensive item…if they are vague about the product’s end use…if the product could be used in a weapons system…then reach out and talk to us.
We do not want to impede your business processes or to intrude upon free commerce. Our primary function with regard to exports is to keep abreast of the national security threat. And the best way to do that is by standing side-by-side and sharing information.
Years ago, schoolchildren were taught that Columbus believed the world was flat. But as any historian will tell you, Columbus knew the world was round. He knew as he watched his ships dip over the horizon that he could sail round the world to India, if the winds were right.
But everyone sitting in this room knows that the world is now indeed flat, as New York Times columnist Tom Friedman has so artfully written. For better or worse, the doors to global trade are no longer merely open; they are non-existent.
And just as the intrepid explorers of the Age of Discovery changed the game, so too have the explorers of our day.
Technology continues to take us in new directions. And there will always be those who seek to illegally benefit from our forward thinking. We must work together to flourish in this new world, while at the same time protecting the innovation and the ingenuity that have kept our country safe and strong.
Thank you and God bless.