As the United Arab Emirates (UAE) lobbies the Congress for approval of a nuclear agreement with the United States, serious export control incidents such as these are the last thing that the Gulf country leaders would want on the minds of Members of Congress that may be on the fence on the proposed 123 deal.
First reported in 2008, according to the Department of State, “Air Shunt Instruments, Inc. has entered in a consent agreement to settle 4 violations of the AECA and ITAR in connection with unauthorized exports of defense articles and the misrepresentation and omission of facts on an export control document.” The proposed charging letter states that Air Shunt personnel knew that it was illegal to export controlled parts to the UAE and Thailand without a license but did so anyway.
The controlled articles exported to the UAE included an engine actuator and an ignition exciter. He sent a gyroscope to Thailand. In addition to the unlicensed export, the charging letter states that the company made material misrepresentations and omissions in various export control documents.
Air Shunt has been in operation since 1984. It is in the business of “repair/overhaul and sales of cutting edge avionics and electromechanical instrumentation and systems for aerospace and defense.” There was no statement on the company website about the incident. According to news reports it appears as if the principal U.S. person involved in the transactions, Air Shunt Vice President for International Sales John Nakkashian, has been missing since 2007.
According to the State Department that company has agreed to pay a civil penalty of $100,00, of which $70,000 will be suspended on the condition that they have already applied that amount to self-initiated, pre-Consent Agreement remedial compliance measures; and the remaining $30,000 will be suspended on the condition that they will apply this amount to Consent Agreement-authorized remedial compliance measures. For more information on the consent agreement, visit the DDTC website.
With regards to the UAE, as usual in these charging letters, there is no information regarding what the parties on the other end of the deal knew or might have known about export licensing requirements. It is very possible that the UAE had no idea what was going on. Maybe some of the parts were headed for Iran for use in some Shah-era F-5. Either way, it is publicity that they could do without.