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Canadian Export Controls Violation Case Presses On, Prosecution Loses Use of Confession

Export control-related prosecutions are rare in Canada so when one makes headlines it can make for some interesting reading.  Last week Canadian prosecutors completed presenting their case against an Iranian born and educated Canadian citizen, Mahmoud Yadegari, who stands accused of violating the Canadian Customs Act and Export Imports Permits Act for coordinating a shipment of controlled items to Iran.

Yadegari is accused of surreptitiously shipping pressure transducers for us in Iran’s nuclear program.  Of course, he argues that he had no idea that these items were destined for Iran and, much less, that they were going to be used in Iran’s nuclear efforts.

Transducers, at their simplest, are devices that convert one type of energy to another form of energy.  They come in many models and are commercially available. Transducers are used in many applications such as music, communications, and energy, to name a few.  While most can be shipped anywhere in the world without any trouble, some are controlled dual-use items and cannot be shipped to places like Iran.

Why would the Iranians want these specific type of transducers?  Why for “peaceful” nuclear energy programs, of course!  These particular transducers convert nuclear cycle energy into electrical signals so that technicians can monitor the internal activity of the reactor at computer work stations.  Without these little critters the Iranian engineers would have no way to accurately monitor if the fuel cycle process, and other systems, are working as designed.

A U.S. company makes the transducers, Setra Systems. According to court records,  Yadegari purchased the transducers from one of Setra’s Canadian distributors and arranged to have them shipped to Iran via Dubai.  He used his home-based business, N&N Express.

While in a holding cell, Yadegari allegedly confessed to the Royal Canadian Mounted Police (RCMP) that he received cash from an unknown Iranian contact who instructed him how to ship the transducers.  However, last week the court ruled the confession inadmissible because the RCMP notes lacked sufficient specificity making it was impossible for the court to determine if the confession was voluntary or not.  It remains to be seen if this decision will be fatal to the government’s case or not.

Over at the Export Law Blog on a post about this case, a Canadian export official told a newspaper that there were at least 25 similar cases that were never made public because there had been no arrests because, in essence, under Canadian law you would need to almost catch these people in the act in order to make an arrest.

For us Yanks, the case is a reminder that many re-export issues remain of controlled items shipped across the border to our NAFTA partner.  This issue has been the subject of numerous Government Accountability Office reports including one in 2002 that detailed how U.S. exporters were inconsistently implementing the Canadian export exemptions for controlled products.  But no matter how well a U.S. company is complying with export control laws, our allies need to do their part as well. Prosecuting law breakers in other countries is critical if a global export control regime is ever going to work.

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