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US State Department Blacklists Spanish Arms Dealer; GD Caught in Fray

Jun. 6, 2014 - 03:45AM   |  
By ZACHARY FRYER-BIGGS   |   Comments
A boarding team assigned to the Spanish frigate SNS Numancia mans a rigid hull inflatable boat. The US State Department has charged that a Spanish contractor importing night vision equipment intended for the Spanish Marine Corps illegally resold the devices.
A boarding team assigned to the Spanish frigate SNS Numancia mans a rigid hull inflatable boat. The US State Department has charged that a Spanish contractor importing night vision equipment intended for the Spanish Marine Corps illegally resold the devices. (PH1 Bauer, Bart/US Navy)
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WASHINGTON — A Spanish contractor importing night vision equipment intended for the Spanish Marine Corps and police agencies instead was illegally reselling the systems to security companies in that country, the US State Department charged late Thursday.

In legal documents filed by the agency, Carlos Dominguez and several companies under his control are accused of violating International Traffic in Arms Regulations (ITAR) that govern the sale and resale of defense equipment. The documents ban Dominguez and the companies from being a part of future deals for ITAR restricted equipment.

Most of the night vision systems originated with small US contractors who were not accused of being involved in the resale activity, but in a wrinkle, a subsidiary of General Dynamics was apparently involved with one of the illegal deals.

The State Department said that General Dynamics-Santa Barbara Systems (GD-SBS) served as the middleman for a 2009 deal that saw night vision devices (NVDs) sold to Spanish security company Segur Iberica, by one of Dominguez’s companies, Elint.

The State Department hasn’t taken any legal action against General Dynamics, and the documents detailing the transaction include GD-SBS’ defense that the company didn’t know the deal was illegal, and that the alleged conspirators in the transaction convinced them it was legal.

“GD-SBS maintains that Elint/Spain Night Vision assured it that the NVDs were not subject to ITAR,” the charging letter against Dominguez said.

General Dynamics bought Santa Barbara Systems from the Spanish government in 2001, and the unit currently operates as part of the company’s European Land Systems division.

In a statement, European Land System’s spokesman Rafael Moreno said that the company had lived up to its obligations under ITAR.

“At no time has there been any allegation that Santa Barbara Sistemas failed to comply fully with ITAR requirements,” he said. “The company followed its procedures and asked Elint/Spanish Night Vision whether the NVDs were subject to any ITAR or other export restrictions. Elint/Spanish Night Vision confirmed the NVDs were not ITAR-controlled. There were no known red flags at the time of this interaction for Santa Barbara Sistemas to suspect the information was not accurate.”

Moreno said the company had worked with Spanish police and US law enforcement when it became aware that an investigation was under way.

Night vision is an area widely known to have ITAR implications following one of the most famous ITAR violations cases brought by State in 2007. In that case, the State Department said that ITT had shipped night vision systems to China. ITT had to pay a $28 million fine and was prevented from selling night vision equipment overseas.

State Department officials said that in the case of Dominguez, no national security risks were created as a result of the illegal transfers, likely because the equipment appears to have been largely used by security companies in Spain rather than a foreign military.

“While the Department’s review indicated no direct harm to U.S. foreign policy or national security occurred, this incident highlights the range of potential penalties that may be imposed by the Department for ITAR violations, including those committed by foreign individuals and entities,” a State Department official said.

Officials have been vocal about efforts to increase enforcement as the agency has undergone a rewriting of the export control categories and moved to speed up the export licensing process.

Email: zbiggs@defensenews.com.

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