DDTC Debars Telecom Company to Settle Illegal Defense Exports

The State Department this week announced the debarment of U.S.-based telecommunications company VTA Telecom to settle allegations it violated the International Traffic in Arms Regulations. The agency’s Directorate of Defense Trade Controls imposed the three-year debarment, which prohibits VTA from participating in any activities subject to the ITAR, after it said VTA illegally exported defense goods to Vietnam and gave false statements on export documents.

The debarment comes about two years after the Commerce Department fined the firm, a subsidiary of a Vietnamese state-owned telecom company, $1.87 million for illegally exporting goods to Vietnam (see 2110130007). Commerce said VTA illegally exported power amplifiers and transistors and lied about their end uses and end users.

DDTC said the company made similar statements about its defense exports when it illegally shipped or tried to ship several controlled items, including hobby rocket motors, video trackers, a gas turbine engine and technical data, committing six violations of the ITAR. VTA then knowingly gave false statements on its required end-use statements, according to a charging letter from DDTC, which found out about the violations after VTA submitted a disclosure “in the wake” of a federal investigation into the company.

One shipment in 2015 included the export of an electro-optical imaging video tracker to Vietnam, which was subject to strict license requirements because of its “capacity for substantial military utility or capability.” VTA told a freight forwarder that the item was an “electronic board,” DDTC said, and undervalued it by listing it as worth “zero dollar” with a shipping fee of $70. The company exported an identical shipment later that month, again misrepresenting the item and its value, DDTC said.

Later that year, VTA illegally exported ITAR-controlled imaging video trackers, cables and “related software” to Vietnam, DDTC said, and “misrepresented” the shipment as containing “four circuit boards, two hard drives, 1 meter, and auxiliary cables.” The company again undervalued the items to the freight forwarder.

Between September 2015 and July 2016, VTA said, it illegally exported or tried to illegally export 86 hobby rocket motors, 126 “propellant reload kits’ for the motors and 40 “freestanding propellant reload kits” for the motors. In April 2016, it also tried to export 30 explosive bolts controlled under U.S. Munitions List Category IV and “misrepresented the intended use” of the bolts, DDTC said, but CBP seized the shipment. Another illegal export in July 2016 included a “Teledyne J402-CA-400 engine” controlled under USML Category XIX, DDTC said.

DDTC pointed to several aggravating factors that led to the debarment, including that the shipments were sent to a “proscribed destination” at the time of the activity -- destinations subject to a license review policy of denial. The agency also said VTA disclosed the violations only after it found out about the government charges, the company and its former vice president had “disregard for the requirements” of the ITAR and senior management “participated in or was aware of the conduct.”

The agency also pointed to several mitigating factors, including VTA’s cooperation with DDTC’s investigation and its entry into three tolling agreements to delay the statute of limitations set forth under the ITAR and the Arms Export Control Act. VTA also conducted a “thorough review” of its conduct and the violations and took “appropriate steps to remediate them.”

VTA’s debarment took effect April 20 and will last until April 20, 2026, prohibiting the company from “participating directly or indirectly in defense trade” subject to the ITAR. DDTC said it may make exceptions to this policy on a case-by-case basis. VTA Telecom didn’t respond to a request for comment.