Two Chinese Extradited to US for Violation of ITAR

It was reported by China Legal Daily that two Chinese businessmen were recently lured by secret agents of US to Hungary and later arrested and extradited to US for attempting to export anti-radiation PROM chips that can be used for outer space and military purpose, which are classified as USML items.

International Traffic in Arms Regulations (ITAR) is a set of United States government regulations that control the export and import of defense-related articles and services on the United States Munitions List (USML). U.S. Persons (including organizations) can face heavy fines if they have, without authorization or the use of an exemption, provided foreign (non-US) persons with access to ITAR-protected defense articles, services or technical data

Two Chinese exchanged emails with the secret agent who disguised as the CEO of an  American trade company. The report said that they were misled that the transaction would be permissible via a third country. They were arrested when flew to Hungary to collect the goods from their trade partners. The Chinese report said they were entrapped by US secret agent and extradited without due process, such as presence of Chinese Counselor and Chinese translation of Hungarian court decision.

Interestingly, one of the Chinese, Yuan, was almost extradited from UK to US for Human Magic Power’s trademark dispute with an American company called ABRO Industrial 3 years ago. Yuan claimed that he was lured by Abro to UK for negotiation of the trademark ABRO ownership of which was under retrial at Beijing High Court but was arrested on aircraft landing in London Heathrow Airport. Fortunately Yuan managed to go home thanks to a misspelling of UK court decision. He did not have the same luck this time and has to face US court trial.

The series of entrapment extradition cases may alert the Chinese businessmen that they should be aware of foreign laws and regulations for international trade. However, ABRO trademark case is still puzzling. Based on limited information available, American Abro does not have any legal ground to seek criminal sanction under US law against a Chinese company that applied for registration of an identical mark with the Chinese Trademark Office. Perhaps, the Chinese company exported goods to US market using the mark ABRO.

It proves my guess that Yuan’s Hunan Magic Power indeed shipped alleged counterfeit goods to US and many other countries. In 2005, Hunan Magic allegedly shipped $22,000 worth of products to Livingston Parish, Lousiana, sparking the charges that led to Yuan’s arrest in London. Under Louisiana laws, among the toughest in the U.S. against counterfeiting, he could face millions in fines and up to five years in jail.
Since the Chinese government has no extradition treaty with the U.S., meaning Yuan would likely only be sent back to face those charges by a third nation. That was the beginning of Heathrow arrest. US has extradition agreement with more than 100 countries. It seems it still pretty dangerous for Chinese businessmen who have been targeted by US law enforcement to go abroad.

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