Petition for Writ of Certiorari — Servotech International Establishment v. United States

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MAR 22 1985

ALEXANDER L. STEVAS,

a oem ence nummer

NO.

OCTOBER TERM, 1984

Supreme Court af the United States

SERVOTECH INTERNATIONAL ESTABLISHMENT,

Petitioners

versus

UNITED STATES OF AMERICA,

Respondent

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT -

LAw OFFICES OF JACK R. BAILEY

PETE W. WESTON

6200 Savoy, Suite 260

Houston, Texas 77036

(713) 783-7480

Counsel for Petitioner,

Servotech International

Establishment

March 22, 1985

Alpha Law Brief Co., Inc_—5606 Parkersburg—Houston, Texas 77036—223-3003

QUESTIONS PRESENTED

Question 1: When, in a civil forfeiture proceeding for

illegal export of arms, a valid Executive Order or other

Presidential designation proscribing the export control of

arms must be in existence for a violation of 22 U.S.C.,

Section 2778, and 22 U.S.C., Section 401, to occur.

Question 2: At the time of seizure, no valid arms

export regulations were in force to make an attempt to

export arms illegal under 22 C.F.R. 121, 122, 123 and

127.

SUBJECT INDEX

Page

Cpentions. PGRN coos kdak deta cennntciusanacenax I

wee Goes TW ocd chee sis wieder india wes erieees 2

b EPPPPPUTT TCT Torre ey er eee re 2

Statutory Provisions Involved ............. pe Reh ASPr 2

Seatemmond of te GOP i. 5 cada Fasae iss ieee 7

Reasons for Granting the Writ ............csccccecceees 11

re rrr ee rr ete oe 19

Cortiiente of SOW .o.c)iccaxnssn0eneee ccna 19

Appendix A—Opinion of the Court of Appeals dated Janu-

ae | ree rer rr rr la

Appendix B—Executive Order No. 10973, dated November

7, 1961 by John F. Kennedy ............. 22a

Appendix C—Executive Order No. 11432, dated October

24, 1966 by Lyndon B. Johnson .......... 25a

Appendix D—Executive Order No. 11959, dated January

18, 1977 by Gerald R. Ford .............. 27a

Appendix E—Executive Order No. 12444, dated October

14, 1983 by Ronald Reagan .............. 29a

Appendix F--Executive Order No. 12451, dated December

20, 1983 by Ronald Reagan .............. 3la

Appendix G—Executive Order No. 12470, dated March 30,

1984 by Ronald Reagan ................. 33a

Appendix H—Presidential Determination No. 85-4, dated

February 4, 1985 by Ronald Reagan ....... 35a

LIST OF AUTHORITIES

CASES Page

Calero-Toledo v. Pearson Yacht Leasing Co., 416 US.

G63 (1974) .ncccccccccccccccccccsccesecessssscees 11

Cole v. Young, 351 U.S. 536 (1956) ..........0-0eee. 18

Day v. United States, 611 F.2d 1122 (Sth Cir. 1980) ... 15

Porter v. Prudential Insurance Co. of America, 470 F. Supp.

BOS CIDTS) wcccccccccscccccccccsscccccceccccccens 15

United States v. Lucas, 6 F.2d 327 (1925) ..........4.5.. 15

Uinted States v. Wayte, 710 F.2d 1385 (9th Cir. 1983),

Cert. Granted 104 S.Ct. 2655 (1984) .............5. 11

UNITED STATES STATUTES

ls i od eadeakepneeennns 1,3, 7, 14, 15, 16

Be Ti, MEE BOO ncn ccccccccccccccesssstccssace 3,12, 14

pT ol yy Pee 1, 3,7, 10, 11, 12, 13, 14,15

Be Wiese UUEEEE SETEEM) cc checcccccesces 3, 10, 11, 12, 14, 16, 17

Be Cee, ED BEUUEED ccccccccccccccscescsssscsce 14, 16

i I PPD scccscccscccccsseccsccecees 10, 11,12

a ME 2 6c 5 566 seed seesconecsadeces 2

PRESIDENTIAL ORDERS

Seeeees GI BOO BOER vc ccc ccccccccavecas 6, 7,12, 13,17, 18

Renn COUNT BUM, BOGOR co ccccccccccccccccceces 6, 7,13, 15,17

i Ce ..coceccccceesesseceecsese 6,7,18

ES 6,7, 16,17

ct cnc cccceccecceeccesooese 6,7, 16

OL rr 6,7, 16

Presidential Determination No. 85-4 ...............455. 6,7,18

RULES OF THE UNITED STATES SUPREME COURT

ere eee ee nea bbebeceseeneees 2

ER RT LE AE a rr 2

Ge ewan dieceubess 19

CODE OF FEDERAL REGULATIONS

21, 122, 123 and 127 ...1, 3,4, 5, 6, 7, 10, 12, 13, 14, 15, 16

—s

NO.

IN THE

Supreme Court of the Hnited States

OCTOBER TERM, 1984

)

ONE BOEING 707 AIRCRAFT, ETC., ET AL.,

SERVOTECH INTERNATIONAL ESTABLISHMENT,

Petitioners

versus

UNITED STATES OF AMERICA,

Respondent

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Petitioner, Servotech International Establishment, re-

spectfully requests that a Writ of Certiorari issue to review

an Opinion and Judgment of the United States Court of

Appeals for the Fifth Circuit, which affirmed in part,

reversed in part, and rendered a decision against Peti-

tioner’ as to attempting to export arms in violation of

22 U.S.C. 2778, 22 U.S.C. 401, and 22 C.F.R. 121, 122,

123, and 127.

1. The parties in the Court below were the United States of

America versus One Boeing 707 Aircrait, Fg Fleuzeugleasing GmbH

(“FG”), a West German Corporation and the owner of the aircraft,

and Servotech International Establishment (“Servotech”), a Liechten-

stein corporation and the owner of the weapons. Interested persons

also include Mr. John Parks and Mr. Peter Towers, agents of

Servotech.

THE OPINION BELOW

The Opinion of the Court of Appeals is reproduced as

Appendix A to the Petition at Page —-—. Both Petitioner

and the United States appealed to the Court of Appeals.

The Court of Appeals affirmed in part, reversed in part,

and rendered the decision of the Trial Court. The Appel-

late Opinion is reported in 750 F.2d 1280 (1985).

JURISDICTION

The Opinion and Judgment of the Court of Appeals

were entered on January 21, 1985.

Petitioner invokes the Court’s Certiorari Jurisdiction

under 28 U.S.C. Section 1254(i). Filing of this petition

is made within sixty (60) days of the Court of Appeals

Opinion and Judgment and is therefore timely under Rules

20.1 and 20.4 of this Court.

STATUTORY PROVISIONS INVOLVED

Title 22, United States Code, Section 2778, provides in

relevant part as follows:

“(a)(1) In furtherance of world peace and the

security and foreign policy of the United States, the

President is authorized to control the import and the

export of defense articles.”

Title 22, United States Code, Section 401, provides in

relevant part as follows:

“(a) Whenever an attempt is made to export or ship

from or take out of the United States any arms or

munitions of war or other articles in violation of

law . . . Any person duly authorized for the purpose

by the President, may seize and detain . . . All arms

————— CC

or munitions of war . . . and aircraft seized pursuant

to this subsection shall be forfeited.”

Title 22, United States Code, Section 1934, provides in

relevant part as follows:

“Repealed. Pub.L. 94-329, Title II, § 212(b)(1),

June 30, 1976, 90 Stat. 745.

The annotations thereto provide in relevant part as

follows:

“Reference to this Section Deemed Reference to

Section 2778 of this Title. Section 212(b)(1) of

Pub.L. 94-329 provided in part that: “Any reference

to such section [this section] shall be deemed to be

a reference to section 38 of the Arms Export Con-

trol Act [section 2778 of this title] and any reference

to licenses issued under section 38 of the Arms Ex-

port Control Act [section 2778 of this title] shall be

deemed to include a reference to licenses issued

under section 414 of the Mutual Security Act of

1954 [this section].”

Saving Provisions. Section 212(b)(2) of Pub.L.

94-329 provided that: “All determinations, authori-

zations, regulations, orders, contract agreements,

and other actions issued, undertaken, or entered into

under section 414 of the Mutual Security Act of

1954 [this section] shall continue in full force and

effect until modified, revoked, or superseded by ap-

propriate authority.”

Title 22, Code of Federal Regulations, Section 121,

et seq., provides in relevant part as follows:

“Part 121—Arms, Ammunition, and Implements of

War

Authority: Sec. 414, as amended, 68 Stat. 848; 22

U.S.C. 1934; secs. 101 and 105, E.O. 10973, 26

FR 10469; sec. 6, Departmental Delegation of Au-

thority No. 104, 26 FR 10608, as amended, 27 FR

9925, 28 FR 7231; and Redelegation of Authority

No. 104-3-A, 28 FR 7231, unless otherwise noted.

Source: Dept. Reg. 108.605, 34 FR 12029, July 17,

1969, unless otherwise noted.

Sections 121.04-121.22 redesignated by Dept. Reg.

108.733, 42 FR 16617, Mar. 29, 1977.

Enumeration of Articles

121.01 The U.S. munitions list.

Pursuant to the authority cited supra the following

articles are hereby designated as arms, ammunition,

and implements of war.”

Title 122, Code of Federal Regulations, Section 122,

et seq. provides in relevant part as follows:

“Part 122—Registration

Authority: Sec. 414, as amended, 68 Stat. 848, 22

U.S.C. 1934; secs. 101 and 105, E.O. 10973, 26 FR

10469; sec. 6. Departmental Delegation of Author-

ity No. 104, 26 FR 10608, as amended, 27 FR

9925, 28 FR 7231; Redelegation of Authority No.

104-3-A, 28 FR 7231.

Source: Dept. Reg. 108.605, 34 FR 12031, July 17,

1969, unless otherwise noted.”

Title 123, Code of Federal Regulations, Section 123,

et seq., provides in relevant part as follows:

“Part 123—Licenses for Unclassified Arms, Ammu-

nition, and Implements of War

Authority: Sec. 414, as amended, 68 Stat. 848; 22

U.S.C. 1934; secs. 101 and 105, E.O. 10973; 26 FR

10469; sec. 6 Departmental Delegation of Author-

ity No. 104, 26 FR 10608, as amended, 27 FR

9925, 28 FR 7231; and Redelegation of Authority

No. 104-3-A, 28 FR 7231.

Source: Dept. Reg. 108.605, 34 FR 12032, July 17,

196°, unless otherwise noted.”

Title 127, Code of Federal Regulations, Section 127,

et seq., provides in relevant part as follows:

“Part 127—Violations, Penalties and Administrative

Remedies

Authority: Sec. 414, as amended, 68 Stat. 848: 22

U.S.C. 1934; 18 U.S.C. 1001; 22 U.S.C. 401; secs.

101 and 105, E.O. 10973, 26 FR 10469: sec. 6,

Departmental Delegation of Authority No. 104, 26

FR 1068, as amended, 27 FR 9925, 28 FR 7231:

and Redelegation of Authority No. 104-3-A, 28 FR

7231. The provisions of Part 127 regarding exports

to Southern Rhodesia, issued under E.O. 11322, 32

FR 119; 59 Stat. 620, 22 U.S.C. 287c.

Source: Dept. Reg. 108.605, 34 FR 12040, July 17,

1969, unless otherwise noted.

§ 127.01 Violations in general.

(a) It is unlawful to export or attempt to export

from the United States any article or technical data

for which a license or approval is required by this

subchapter without first obtaining the required license

or written approval from the Department of State.”

Title 27, Code of Federal Regulations, Section 47,

et seq., provides in relevant part as follows:

“Part 47—Importation of Arms, Ammunition and

Implements of War

Authority: Sec. 38, Pub. L. 94-329, 90 Stat. 744

(22 U.S.C. 2778); 44 U.S.C. 3504(h), unless other-

wise noted.

Source: T.D. ATF-8, 39 FR 3251, Jan. 25, 1974,

unless otherwise noted.

47.1 General.

The regulations in this part relate to that portion of

section 414 of the Mutual Security Act of 1954, as

amended, which is concerned with the importation of

arms, ammunition and implements of war. This part

contains the U.S. Munitions Import List.”

Executive Order No. 10973, dated November 7, 1961

by John F. Kennedy is reproduced in relevant part as

Appendix B to the Petition at Page 22a.

Executive Order No. 11432, dated October 24, 1966

by Lyndon B. Johnson is reproduced as Appendix C to

the Petition at Page 25a.

Executive Order No. 11959, dated January 18, 1977

by Gerald R. Ford is reproduced in relevant part as

Appendix D to the Petition at Page 27a.

Executive Order No. 12444, dated October 14, 1983

by Ronald Reagan is reproduced in relevant part as

Appendix E to the Petition at Page 29a.

Executive Order No. 12451, dated December 20, 1983,

by Ronald Reagan is reproduced in relevant part as Ap-

pendix F to the Petition at Page 31a.

Executive Order No. 12470, dated March 30, 1984 by

Ronald Reagan is reproduced in relevant part as Appen-

dix G to the Petition at Page 33a.

Presidential Determination No. 85-4, dated February

4, 1985 by Ronald Reagan is reproduced as Appendix

H to the Petition at Page 35a.

STATEMENT OF THE CASE

The forfeiture of weapons is permitted by 22 U.S.C,

Section 401 upon a showing that a violation of law under

the statute or under 22 U.S.C., Section 2778 has occurred.

Violations of law are determined by Presidential authority

which is partially delegated to the appropriate executive

branch.

Executive Orders No. 10973, 11432, 11959, 12444,

12451 and 12470 all deal with and delegate such au-

thority, and are reproduced in the Appendix. The Presi-

dent can and does directly control the export of arms,

as shown by Presidential Determination No. 85-4, re-

produced in the Appendix.

Regulations have been promuglated by the State De-

partment as to export and the Bureau of Alcohol, Tobacco

& Firearms as to import to carry out the Presidential

delegation of authority.’

This action was initiated by the United States upon the

filing of its forfeiture action against One Boeing 707 and

weapons seized on May 12, 1981 at Houston Interconti-

nental Airport.

The Boeing 707 was owned by Fg Fleugzeugleasing

GmbH (“FG”) at the time it was seized. FG is a German

corporation wholly owned by a German citizen named

Carl Press. FG had leased the Boeing 707 to an Austrian

air charter service called Montana Austria Flugbetrieb

Gesellschaft (“Montana”) at the time the Boeing 707

was seized in Houston (Tr. 4, §).°

2. The relevant regulations of export of arms are found in 22

C.F.R. 121-127. Regulations of import of arms are found in 27

C.F.R. 47.

. Montana is not a party to this action, having gone bankrupt

in Austria shortly after seizure in this case, and makes no claim to

the Boeing 707.

The principal business of Montana was to fly air cargo

flights between New York City and Vienna, Austria. At

the time the aircraft was seized, however, Montana had

contracted with Servotech to fly a cargo from Houston

to South Africa. Servotech’s cargo was to be the only

cargo aboard the Boeing 707 as it left Houston (Tr. 64,

110).

Servotech is a corporation based in Liechtenstein .and

is engaged in the business of buying and selling various

types of commodities, including but not limited to arms

and other weaponry.

In April of 1981, Servotech entered into an agreement

with Balotta Trading Establishment (“Balotta”), also a

Liechtenstein corporation, to purchase certain weapons

(Tr... 43, 23)."

Balotta operated its arms brokerage business through

one of its agents, Gary Howard, who was also an inform-

ant to the United States Customs Service (Tr. 15). Upon

a review of the facts supplied by Howard, Customs

determined that, in fact, the subject weapons could not

be legally exported from the United States, thus, Customs

initiated an undercover “sting” operation with the co-

operation of the agents of Balotta, the informants (Tr.

105-107), such that the informants could deprive the

agents of Servotech of some 1.2 Million Dollars (Tr.

51-55).

4. The weapons ultimately purchased and subsequently seized and

forfeited included 1,146 M16A1 automatic rifles, 260 pistols, and 100

M203 grenade launchers.

The number of weapons actually delivered to Servotech and the

attempt to export them was hotly contested at trial. Mindful, how-

ever, of the standard of review upon Glasser v. United States, 365

U.S. 60 (1942), we will not belabor the Court with the evidentiary

dispute on this point.

During the course of negotiations, telephone calls be-

tween Howard and Peter Towers, agent of Servotech,

were tape recorded (Tr. 116, 117).

Balotta was to obtain the weapsons of Servotech’s ac-

count, here in the United States, and Servotech was to

then export them from the United States to a foreign

destination (Tr. 15).

Balotta, through its agents, Howard and the United

States Customs Service, through its agent, Don Winkler,

was to provide to Servotech all legally requisite export

documentation (Tr. 24, 33, 46, 110).°

The plan conceived by Customs was relatively simple.

The agents of Balotta, the informants, paid the Customs

Service out of the above-referred to 1.2 Million Dollars

some $629,000.00, with which Customs obtained some

of the weapons involved herein (Tr. 16-23, 114-115).

Howard spent approximately $10,000 to $15,000 in buy- |

ing pistols (Tr. 22). It was never the intent of Customs |

and/or the informants that any of the subject weapons

would ever be exported. At virtually all times, the weapons

which were purchased were titled in, and were under

the possession and control of Customs (Tr. 21, 22, 34).

On May 7, 1981, Montana Austria, the operator of

the Boeing 707, sent the Civil Aeronautics Board a tele-

gram requesting Traffic Rights for a flight on May 12,

1981 to fly a cargo of steel fabricates to Khartoum,

Sudan (Tr. 87). On May 11, 1981, a destination change

to Johannesburg, South Africa was requested. Press was

notified of this change in destination and immediately

5. Customs Agent Don Winkler, posing as a freight forwarder

and weapons supplier, would “grease” the export license for Servotech

through Munitions Control.

instructed his representative in Vienna to make sure the

flight documents and export licenses were in order (Tr.

8). On May 12, 1981, the weapons were delivered to

Houston Intercontinental Airport by Customs Agents

posing as truck drivers.

As they were inspecting the weapons, Peter Towers

and John Parks, agents of Servotech, were arrested along

with the captain of the Boeing 707. The Boeing 707

and weapons were seized at that time (Tr. 42-52). Towers

and Parks later pled guilty to willfully attempting to

export weapons without a license in violation of 22 U.S.C.

2778 (a) and (c) and 22 C.F.R. 127.01 (Tr. 121-123).

Civil forfeiture proceedings under 22 U.S.C. Section

401 were instituted by the United States to permit for-

feiture of all arms and the aircraft seized pursuant to

the violation of law under this statute, namely the at-

tempt to illegally export arms to South Africa without

a license in contravention of 22 U.S.C. Section 2778,

and 22 C.F.R. 121, 122, 123 and 127.

The Trial Court found that probable cause existed for

the seizure of the weapons and the aircraft and that all

persons who assisted in the seizure were immune from

any liability arising from the seizure. Upon trial to the

Jury, the Court ruled the weapons forfeited and the

aircraft returned to FG because FG had done all it

reasonably could be expected to do as an aircraft lessor

to prevent the illegal use of its aircraft. Both the United

States and Servotech appealed.

The Appellate Court affirmed its finding against Servo-

tech and reversed and rendered the denial of forfeiture

of the aircraft as failing to meet the standard for due

process exception to forfeiture established by the United

States Supreme Court in Calero-Toledo v. Pearson Yacht

Leasing Co., 416 U.S. 663 (1974).

The Appellate Court found that the regulations em-

bodied in 22 C.F.R., Articles 121-127 were unaffected

by Executive Order 11432.

REASONS FOR GRANTING THE WRIT

Certiorari should be granted because of the importance

of the exercise of Supreme Executive authority. Enforce-

ment of administrative regulations requires uniform stand-

ards for interpreting Presidential Orders and directives.

Moreover, the absence of definite standards presents a

recurring problem of abuse by selective enforcement of

statutes. The Court has granted certiorari in a case now

pending before it involving interpretations of a Presi-

dential Proclamation.*®

The Petitioner’s sole point is grounded on the fact that

no valid Presidential Order(s) or federal reguiations as to

export were in effect at the time of seizure of the arms.

It would appear that the gravamen of the Government’s

case is Title 22, U.S.C. 2778. Nonetheless, 22 U.S.C.

2778, Section (a) merely grants Presidential author-

ity regarding the statute and vests the Director of the

United States Arms Control and Disarmament Agency

with the authority to deal with the licensing contemplated

by the statute. 22 U.S.C. 2778, Section (c) defines crim-

6. In U.S. v. Wayte, 549 F.Supp. 1376 (D.C. Cal. 1982), re-

versed 710 F.2d 1385 (9th Cir. 1983), Cert. Granted 104 S.Ct. 2655,

May 29, 1984, Question 1. The defendant was indicted for failure to

Presidential Proclamation No. 4771. Without it there is no basis for

criminal prosecution for non-registration.

NOTE: The Opinion of the Supreme Court of March 19, 1985 was

unavailable for review prior to printing this Petition.

inality (fraud) regarding licensing procedure and viola-

tion of other parts of the statute or its rules or regulations,

and prescribes the penalties therefor. Thus, obviously, one

cannot violate 22 U.S.C. 2778(a) as it is merely au-

thoritative, not penal and because 2778(c) has nothing

to do with “attempted export”.

22 U.S.C. 2778 was enacted October 22, 1968, P.L.

90-629, c. 3, Sec. 38, as added June 30, 1976, P.L: 94-

329, Title II, Sec. 212(a)(1), 90 Stat. 744. It was then

amended or otherwise modified from time to time there-

after to give its present form.

The parentage of Title 22, Code of Federal Regula-

tions, Parts 121, et seq. and 127, et seq., also a part of

the Government’s case, flows to Executive Order No.

10973, reproduced in Appendix 22a in the Petition,

which originates with the now repealed Section 414 of

the Mutual Security Act of 1954, 22 U.S.C. 1934, supra.

It is interesting to note that from October 22, 1968

to June 30, 1976, both 22 U.S.C. 1934 and 22 U.S.C.

2778 were in effect, but 22, Code of Federal Regulations,

Parts 121, 122, 123 and 127 had and at all times has had

as statutory authority 22 U.S.C. 1934, even though this

statute has been repealed.

It can be seen that Executive Qrder No. 10973, the

Order creating 22 C.F.R. 121, et seq. and 127, et seq.

was signed by President John F. Kennedy on November

3, 1961, to be effective as of September 30, 1961. Sec.

606 of the Order recited:

“Sec. 606. Saving provisions. Except to the extent

that they may be inconsistent with this order, all

determinations, authorizations, regulations, rulings,

certificates, orders, directives, contracts, agreements,

and other actions made, issued, or entered into with

respect to any function affected by this order and not

revoked, superseded, or otherwise made inapplicable

before the date of this order, shall continue in full

force and effect until amended, modified, cr termin-

ated by appropriate authority.” (emphasis ours)

The next Order affecting 22 C.F.R. 121, et seq., and

127, et seq. was Executive Order No. 11432, signed by

President Lyndon B. Johnson on October 22, 1968, to be

effective October 24, 1968. Sec. 2 of the Order reads:

“Sec. 2. All regulations issued and presently in effect

pursuant to Section 414 of the Mutual Security Act

of 1954, as amended, shall, insofar as they relate to

control of the import of arms, ammunition and im-

plements of war, including technical data relating

thereto continue in effect and be administered by the

Secretary of the Treasury until revoked or super-

seded by him. Ail pending applications for import

licenses not acted upon by the Secretary of State

at the date of this order shall be transferred to the

Secretary of the Treasury for appropriate action.”

(emphasis ours)

Thus, because of the explicit language of Sec. 606, E.O.

10973, the regulations promulgated pursuant to E.O.

10973 terminated when they were amended by E.O.

11432, but were renewed by that amendment to the ex-

tent of affecting imports. One can only wonder why Presi-

dent Johnson abrogated the regulations as to exports, but

so abrogate he did and such is the status of 22 C.F.R.

121, et seq. and 127, et seq. at all times material to our

instant case.

No regulations pertaining specifically to 22 U.S.C.

2778 were ever promulgated. The regulations (121, et

seq. and 127, et seq.) have at all times been under the

aegis of 22 U.S.C. 1934 as their statutory authority. They

purport to pertain to 22 U.S.C. 2778 only by virtue of the

repealer of 22 U.S.C. 1934 (90 Stat. 745), the savings

clause therein which reads:

“Any references to such section (section 414 of the

Mutual Security Act of 1954, 22 U.S.C., Sec. 1934

(repealed) shall be deemed to be a reference to

section 38 of the Arms Export Control Act [this

section] and any reference to licenses issued under

section 38 of the Arms Export Control Act [this

section] shall be deemed to include a reference to

licenses issued under section 414 of the Mutual

Security Act of 1954.”

Servotech takes the position that no regulations at all

pertain to 22 U.S.C. 2778 due to the fact no regulations

have ever been promulgated o ordered specifically for

22 U.S.C. 2778, but have been “stretched” to cover 2778

by the savings clause of the repealer. This should not be

so; the President should order regulations specifically

pertaining to 2778.

Nonetheless, assuming 22 C.F.R. 121.01, et seq. and

127.01, et seq. have any viability, that viability applies

only “insofar as they relate to control of the import of

arms” etc. Thus, obviously, Servotech’s agents could be

guilty of absolutely no wrongdoing. Without a Munitions

List regulating exports, without regulations regulating

exports 22 U.S.C. 401 and 22 U.S.C. 2778 have no

viability at all with regard to our case. While 22 U.S.C.

2778(b)(2) prescribed licensing regarding both imports

and exports, such licensing is requisite with regard to

articles designated by the President pursuant to 22 U.S.C.

2778(a) (the Munitions List). No President has so desig-

nated regarding exports subsequent to E.O. 11432 which

obliterated the regulations with respect to exports.

The Government has another almost equally severe

problem, that is the language “attempt to export”. 22

U.S.C. 2778 is not an “attempt” statute. Its clear language

contemplates a completed act, to-wit, an import or an

export not an attempt at same. The only “attempt” langu-

age to be found is contained in 22 C.F.R. 127.01(a), or

22 U.S.C. 401 (which contemplates some illegality).

A regulation can be no broader than its authoritative

statute (see Porter v. Prudential Ins. Co. of America,

470 F.Supp. 203 (1979), Day v. United States, 611 F.2d

1122 (Sth Cir. 1980) thus, obviously, 127.01(a) goes

beyond the statute and to that extent is invalid, if indeed

it has any validity at all in light of the foregoing. The

matter of an “attempt” to export where no penalty was

prescribed for such “attempt” was dealt with in another

“gun running” case, United States v. Lucas, 6 F.2d 327

(1925), and was dealt with by the court granting the

defendant’s Motion to Quash the Indictment, which was

granted with Judge Neterer’s statement (pg. 328):

“The further objection that the indictment merely

charged an attempt, and not a consummated offense,

is more serious. The act provides a penalty for any-

one who “export any arms or munitions of war in

violation of Section 1 (or in our case Section (b)

of 22 U.S.C. 2778), etc. It seems clear that this

section has relation only to the consummated offense.

There is no penalty for attempting to export. The

“attempt” is not “itself a separate offense.” and hence

not within Section 1035, R.S. (Comp. St. Sec. 1701),

which provides that a party charged with the com-

mission of a crime “may be found guilty of an at-

tempt to commit the offense so charged, provided,

that such attempt be itself a separate offense.”

The indictment does not charge the commission of a

crime, but only an attempt to commit, which is not

“itself a separate offense.” The Motion to Quash is

granted.”

The Government knows full well that no export event

came close to occurring, but has alleged only an “attempt”.

Thus, it is seen that 22 U.S.C. 2778(a) merely an-

nounces presidential authority. The Government has

carved 2778(a) out, and linked it to 22 C.F.R. 127, et

seq. to get at the “attempted export” angle. Why? Be-

cause, clearly, 22 U.S.C. 2778(b) refers only to a com-

pleted export—not an attempt. The Court will note that

the Government has been careful and diligent not to cite

22 U.S.C. 2778(b). The Government has attempted to

create its own statute respecting attempted exports by

utilizing the presidential authority clause, 22 U.S.C.

2778(a), discarding the export statute (22 U.S.C. 2778

(b), and utilizing a regulation whose very validity Servo-

tech challenges (22 C.F.R. 127, et seq.). Why? Because

127 is the only authority on which the Government can

rely re “attempt”, to get at the illegality required by 22

U.S.C. 401.

Additional attention is commended to attention respect-

ing Section 3 of Executive Order Nos. 12444, 12451 and

12470, signed by President Reagan, on October 14, 1983,

December 20, 1983 and March 30, 1984, respectively.

This Court must address the hard questions of why each

E.O. is styled “Continuation of Export Control Regula-

tions” and recites accordingly? If there were any such

regulations, why the necessity to “continue” same? Servo-

tech argues that such are belated attempts by the Executive

to “undo” E.O. 11432 re “Exports”. Why else the Reagan

Orders? Same are a tacit admission that between E.O.

11432 and E.O. 12444, there were no export regulativns.

Servotech so urges.

The fact remains, E.O. 11432 is specific.

E.O. 11432 dealt with only one thing-—E.O. 10973;

amendment of E.O. 10973. Executive Order 11432

specifically stated:

“Sec. 2. All regulations issued and presently in effect

pursuant to Section 414 of the Mutual Security Act

of 1954, as amended, shall, insofar as they relate to

control of the import of arms, ammunition and im-

plements of war, including technical data relating

thereto, continue in effect and be administered by

the Secretary of the Treasury until revoked or super-

seded by him. All pending applications for import

licenses not acted upon by the Secretary of State at

the date of this order shall be transferred to the

Secretary of the Treasury for appropriate action.”

(emphasis ours)

Don’t you suppose if the export regulations were to

“continue in effect . . .” President Johnson would have

said so. Again, a studied consideration of the matter leads

to only one reasonable conclusion—no regulations re

exports; thus no valid seizure all as stated in the pleadings,

etc. referred to hereinabove, Servotech’s Brief, etc.

22 U.S.C. 2778, in Sec. (a)(1) gives the Executive

authority to control the import and export of defense

articles and defense services, etc., etc. Executive Order

11432 is styled “Control of Arms Imports” and is specific

in Sec. 2 as io “All regulations issued and presently in

effect. .. .” President Johnson did noi mention just “any”

regulations, etc. he mentioned “all” regulations . . .” as

amended, shall, insofar as they relate to control of the

import of arms . . .” etc. If President Johnson had meant

that the regulations controlling exports would “continue

in effect . . .” he would have said so. He did not so state,

in fact he specifically stated as noted herein that “all regu-

lations . . . insofar as they relate to control of the import

of arms, ammunition . . . continue in effect. . . .” We

think Servotech’s proposition is the only reasonable inter-

pretation of the various Executive Orders, particularly in

light of President Reagan’s Executive Orders, which, as

stated above, are a tacit admission that for the time

periods at issue in this appeal there were no regulations

pertaining to the export, attempted export, etc. of arms.

Executive Order 11959 has eliminated Executive Order

11432 by amendment to Section 301 of Executive Order

10973.

There is no question of national security intimated by

this Executive Order. However, reasoning such as in Cole

v. Young, 351 U.S. 536 (1956) would show there was

no immediate threat of harm to permit exercise of sum-

mary powers, of, in that case Government employee dis-

missal. Nevertheless, the President does direct the export

of arms such as by Presidential Determination 85-4, a

proper exercise of authority permitted by Congress.

This case was a case of first impression for the Fifth

Circuit regarding the question presented; although not

recognized as such. Considering the importance and atten-

tion drawn to Presidential Orders and Directives and in

view of the need for their interpretation, it is requested

that the decision below should be reviewed by this Court.

CONCLUSION

For all of the foregoing reasons, Petitioner, Servotech

International Establishment, respectfully suggests that its

Petition for the Writ of Certiorari should be granted.

Respectfully submitted,

LAW OFFICES OF JACK R. BAILEY

PETE W. WESTON

6200 Savoy, Suite 260

Houston, Texas 77036

(713) 783-7480

Counsel for Petitioner,

Servotech International

Establisi:ment

CERTIFICATE OF SERVICE

I do hereby certify that a true and correct copy of the

foregoing Petition for Writ of Certiorari has been served

upon the Solicitor General, Department of Justice, Wash-

ington, D.C. 20530, and counsel for FG, Ms. Mary Lou

Andrews of the firm of Ross, Banks, May, Cron & Cavin,

at 20th Floor, Coastal Tower, 9 Greenway Plaza, Hous-

ton, Texas 77046, in accordance with Rule 28, Title 28

U.S.C., the same having been mailed, First Class Mail,

on the ____._ day of March, 1985.

PETE W. WESTON

APPENDIX A

UNITED STATES of America,

Plaintiff-Appellee-Appellant,

Vv.

ONE BOEING 707 AIRCRAFT, etc., et al.,

Defendants-Appellees,

Servotec1 International Establishment,

Defendant-Appellant.

No. 83-2485.

United States Court of Appeals,

Fifth Circuit.

Jan. 21, 1985.

Arms broker appealed, and Government cross-appealed,

from a judgment of the United States District Court for

the Southern District of Texas, George E. Cire, J., grant-

ing forfeiture of weapons seized during illegal attempt

to export arms to Republic of South Africa without a

license, but denying forfeiture of airplane used in attempt.

The Court of Appeals held that: (1) neither conduct of

private citizen who informed Customs Service of contact

by arms broker concerning purchase of weapons in the

United States for export to Republic of South Africa,

nor conduct of Government in engaging in undercover

investigative activity with respect to such attempt, was

so outrageous as to warrant finding that arms broker’s

due process rights were violated by seizure and forfeiture

of weapons, but (2) once airplane lessor’s suspicions

that possible illegal activity was afoot in charter of his

airplane were aroused, more effective steps were required

to protect airplane from illegal use and subsequent for-

feiture than mere instruction of delegate to secure proper

documentation.

Affirmed in part, reversed in part, and rendered.

Jack R. Bailey, Houston, Tex., for defendant-appellant.

Daniel K. Hedges, U.S. Atty., Javier Aguilar, James R.

Gough, C.J. (Neil) Calnan, Asst. U.S. Attys., Houston,

Tex., for U.S.

Mary Lou Andrews, Houston, Tex., for One Boeing

707, etc., et al.

Appeals from the United States District Court for the

Southern District of Texas.

Before CLARK, Chief Judge, JOHNSON, and WIL-

LIAMS, Circuit Judges.

PER CURIAM:

This is a civil forfeiture case in which the government,

upon a showing of probable cause, seized weapons and

one Boeing 707 airplane which were involved in an

illegal attempt to export arms to South Africa without

a license.’ After a jury trial to determine whether the

weapons and aircraft should be forfeited, the district

court entered judgment granting forfeiture of the weapons

to the government, but denying forfeiture of the Boeing

707, returning the airplane to its owner. The owners of

———

1. The United States filed this forfeiture action pursuant to 22

U.S.C. § 401 and 22 C.F.R. § 127.06 for attempted export without

the legally required licenses and registrations in contravention of

22 U.S.C. § 2778, 18 U.S.C. § 371 and 22 C.F.R. articles 121, 122,

123, and 127.

the weapons appeal forfeiture while the United States

cross appeals the denial of forfeiture as to the airplane.

We affirm as to forfeiture of the weapons and reverse

the denial of forfeiture as to the Boeing 707.

In early 1981, Gary Howard, an arms broker acting

as agent for Balotta Trading Establishment, a Liechten-

stein corporation, was contacted by another arms broker,

representing Servotech International Establishment (“Ser-

votech”). Servotech, a Liechtenstein corporation, was

engaged in buying and selling various commodities, in-

cluding arms and weaponry. This phone call to Howard

on behalf of Servotech was in regards to purchasing

weapons in the United States for delivery to the Republic

of South Africa. Concerned about the possible illegality

of this proposed transaction, Howard contacted the Cus-

toms Service. As a result of Howard’s phone call, Customs

entered into an undercover operation, teaming one of its

special agents, Dan Winkler, with Howard.

In mid-April 1981, Howard was contacted again by

Servotech’s representative and introduced to Peter Towers,

who along with John Parks, were agents for Servotech.

After numerous conversations between Towers or Parks

and Howard, Servotech, through Howard, entered into

an agreement with Balotta, whereby Balotta would pur-

chase weapons for Servotech for export to South Africa.

On April 27, 1981, Towers met with Howard and

undercover Customs Agent Winkler. Their conversation

was tape recorded. At this meeting, Towers announced

the shipping arrangements for the weapons had been

finalized and that a phony end use certificate showing

Sudan as the final destination for the weapons would

disguise the true destination of South Africa.

Soon thereafter, Towers made two wire transfers total-

ling approximately $1.2 million to Balotta’s account at

the Republic National Bank in Dallas. Howard was to

use this money to purchase the weapons ordered by

Servotech. However, as part of the undercover operation,

Howard transferred approximately $629,000 to Customs,

and Customs purchased the weapons’ for Servotech. How-

ard used an additional $10,000-15,000 to buy pistols for

Servotech. Ostensibiy, the remainder of the $1.2 million

remained in Balotta’s account.®

On May 12, 1981, the weapons were delivered to

Houston Intercontinental Airport by Customs agents pos-

ing as truck drivers. Towers and Parks were arrested

while inspecting the weapons, but before any weapons

were actually loaded on the waiting Boeing 707. Towers

and Parks eventually pled guilty to wilfully attempting to

export weapons without a license in violation of 22 U.S.C.

§ 2778(a) and (b) and 22 C.F.R. 127.01.*

2. The weapons purchased by Customs and subsequently seized

and forfeited include 1,146 M16A1 automatic rifles, 259 pistols, and

100 M203 grenade launchers.

3. Servotech alleges that the government seduced some $1.2 million

from Servotech which has never been returned. Servotech’s claim is

not properly brought against the United States because the money

was delivered to Balotta and has never been in the government’s

possession, except for that portion used by Customs and Gary Howard

to purchase the weapons which are the subject of this appeal. Testi-

mony in the record reveals that any money remaining is not subject

to control by the United States. Consequently, if Servotech seeks

return of what remains of the $1.2 million wired to Balotta, its

recourse lies against others than the United States.

4. The guilty pleas of Towers and Parks do not bind Servotech

in this action. As a separate corporate entity, Servotech is not estop-

ped by the guilty pleas of its agents from seeking to protect its

property from forfeiture. The criminal admissions of Towers and

Parks in no way constitute a waiver of any defenses available to

Servotech.

la itil

Servotech had chartered the waiting Boeing 707 from

Montana-Austria, GmbH, an Austrian based charter ser-

vice. At the time the aircraft was seized, Montana-Austria

had contracted with Servotech to fly a shipment from

Houston to South Africa. Montana-Austria did not own

the 707, but rather, leased it from Fg Flugzeugleasing

GmbH (“Fg”).

Fg is a West German corporation, wholly owned by

Carl Press. During 1978, Fg leased the Boeing 707 to

Montana-Austria. Under the lease agreement Montana-

Austria was to use the 707 in routine charter flights of

passengers and cargo to various parts of the world. The

lease agreement contained a provision requiring Mon-

tana-Austria to abide by all national and international

transport laws.° Fg was not involved in the daily opera-

tions of Montana-Austria, but periodically sent a repre-

sentative to check on the charter service and assure

proper adherence to all agreements.

On May 7, 1981, Montana-Austria sent a telegram to

the Civil Aeronautics Board requesting confirmation to

fly a cargo of steel fabricates to Khartoum, Sudan on May

12. A destination change to Johannesburg, South Africa

was requested on May 11.° Press was notified of this

change in destination and immediately instructed his

5. The lease provision provided as follows:

The lessee agrees to only use the aircraft in compliance with

any national and international air traffic rules and laws and

not to transport goods or persons whose transportation is pro-

hibited by national or intenrational provisions.

6. Due to international time changes there is some uncertainty

as to the exact timing of this interchange. Press was in New York

when he received word of Montana-Austria’s requested destination

change and shortly thereafter flew to West Germany. It appears,

however, that the request was made less than 48 hours before the

seizure occurred.

representative in Vienna to check the flight documents

and export licenses to make sure they were in order.

The 707 was seized in Houston on May 12.

The basis of this civil forfeiture action is 22 U.S.C.

§ 401 which prohibits the illegal exportation of war

materials. Section 401 permits seizure of items used in

connection with an attempt to export munitions illegally

and permits forfeiture of all arms and vehicles seized

pursuant to this statute.

[1] Civil forfeiture laws require the government make

a showing of probable cause before it seizes an item

used in violation of its laws. See United States v. One

1978 Mercedes Benz, Four-Door Sedan, 711 F.2d 1297

(Sth Cir. 1983); United States v. One 1975 Ford Pickup

Truck, 558 F.2d 755, 756 (Sth Cir. 1977); United States

v. One 1973 Pontiac Grand Am, 413 F.Supp. 163, 165

(W.D. Tex. 1976). A probable cause proceeding as to

the arms and Boeing 707 was held on April 18, 1983.

After a two-day hearing, the district court ruled the

government had probable cause to seize the weapons and

aircraft under the belief that Servotech’s agents, Parks

and Towers, were attempting to transport the weapons

to South Africa in violation of Customs regulations.

After the court found probable cause, a jury was asked

to determine the fact issues relating to forfeiture. Through

special verdicts, the jury declared that (1) the weapons

were the subject of an illegal export attempt; (2) Fg

did not consent to or participate in the attempt; (3)

Montana-Austria did consent to or participate in the

illegal exportation attempt.’

7. Montana-Austria is not a party to this suit; the company went

into bankruptcy in Austria shortly after the seizure at issue in this

case.

Fg sought a judgment in its favor arguing that the

government should be denied forfeiture of the aircraft

based on the jury’s finding that it did not consent to or

participate in the illegal export attempt. Servotech filed

a Motion for Judgment Notwithstanding the Verdict.

The district court entered judgment granting Fg’s motion

to deny forfeiture of the aircraft. Servotech’s motion was

not granted and the weapons were forfeited to the gov-

ernment.

We deal first with Servotech’s appeal of the decision

to forfeit the weapons to the United States. Servotech

presents two arguments as to why forfeiture of the weap-

ons should be denied. First, Servotech argues the govern-

ment’s conduct in its undercover operation was so out-

rageous as to make forfeiture a denial of due process.

Second, Servotech argues as a matter of law its agents

never attempted to export and no regulations existed to

make exporting munitions illegal. These arguments are

without merit.

Servotech argues forfeiture is unwarranted in this case

due to government misconduct in the use of over zealous

law enforcement techniques. Essentially, Servotech claims

its due process rights were violated by the seizure and

forfeiture of property (munitions and money) involved

in a crime the government had such a heavy hand in

committing. As Servotech states, at issue is whether law

enforcement conduct fell below societal standards so

that the public would regard such conduct an abuse of

government power. Thus framed, we find the conduct

of the government and its citizen informer, Gary Howard,

perfectly proper and well within the confines of accept-

able behavior by law enforcement officers.

Servotech’s due process argument borrows heavily from

concepts developed in the law of criminal entrapment.

Servotech’s position is that regardless of whether its agents,

Towers and Parks, were predisposed to commit the crime,

the conduct of Customs agents was so outrageous as to

violate notions of fundamental fairness. Servotech con-

tends that such behavior could prevent a criminal con-

viction,” and therefore should deny civil forfeiture as well.

Servotech’s argument is not an entrapment argument.

Rather, it is the due process aspect of entrapment and

entrapment-like fact situations which involve undercover

operations. Such operations often find law enforcement

officials intimately involved in the commission of a crime.

This circuit recognized a due process defense within the

context of entrapment in United States v. Tobias, 662

F.2d 381 (Sth Cir. 1981).° However, Tobias indicated

that a due process violation would be found in only

8. Servotech structures its argument from language in United

States v. Russell, 411 US. 423, 93 S.Ct. 1637, 36 L.Ed.2d 366

(1973), where the Supreme Court acknowledged “we may some day

be presented with a situation in which the conduct of law enforce-

ment agents is so outrageous that due process principles would ab-

solutely bar the government from invoking judicial processes to

obtain a conviction. . . .” Jd. at 431-32; 93 S.Ct. at 1643. This

possibility was reiterated by a majority of Justices in the plurality

opinion Hampton v. United States, 425 U.S. 484, 489, 96 S.Ct. 1646,

1649-50, 48 L.Ed.2d i113 (1976). .

9. Other Fifth Circuit cases on the due process aspect of entrap-

ment include United States v. Garrett, 716 F.2d 257, 275 (Sth Cir.

1983): United States v. Lane, 693 F.2d 385, 388 (Sth Cir. 1982);

United States v. Nicoll, 664 F.2d 1308, 1314 (Sth Cir. 1982);

United States v. Gray, 626 F.2d 494 (Sth Cir. 1980); United States

v. McClure, 577 F.2d 1021 (Sth Cir. 1978).

“the rarest and most outrageous circumstances.” Jd. at

387. Outrageous conduct turns upon the totality of the

circumstances. Jd. Therefore, to determine whether due

process has been violated in this civil forfeiture case,

we look to the totality of the circumstances and balance

government involvement against the extent of participa-

tion and predisposition of Servotech’s agents to commit

the crime. /d.*°

[2] Of prime importance in rejecting Servotech’s due

process argument is that Gary Howard, who supplied the

tip to the Customs Service, was at all times a private

citizen. He was neither a paid informant nor employed

by the government. The evidence showed that Howard

did not initiate contact with Servotech. Rather, he was

approached by an arms broker representing Servotech

in regards to obtaining arms for export to South Africa.”

After this initial telephone call, Howard voluntarily noti-

fied the Customs Service of a potentially illegal trans-

action. There is no evidence that Howard was instructed

by Customs to initiate further contact. Rather, Howard

10. Although this method of analysis smacks of entrapment re-

lated legal theories, we do not mean to imply that entrapment is

available as a defense to civil forfeiture. See United States v. One

1972 Wood, 19 Foot Custom Boat, 501 F.2d 1327, 1330 (Sth Cir.

1974). Because Servotech relies on entrapment related due process

theories to argue the government is barred from seizing its preperty,

we must similarly look to an entrapment analysis as the benchmark

for determining whether the government’s behavior in this case vio-

lated due process. Our focus is the determination of outrageous con-

duct. We look to entrapment concepts solely as an analytical tool

for making that determination.

11. The evidence adduced at trial established that Servotech re-

ceived a purchase order from the Armaments Corporation of South

Africa, Ltd. on October 30, 1980 for 1000 M16AI1 rifles, 700 M203

grenade launchers, 250 M16A1 carriers and 20 commando rifles. This

order was received four months before Howard was first contacted

by Servotech’s representative in late February or early March 1981.

j :

10a

was merely to tape record any conversations which he

might have with Servotech or its agents and representa-

tives. Servotech’s representative arms broker contacted

Howard a second time, again by telephone. This second

call introduced Howard to Servotech’s agents, Towers and

Parks, and was the springboard from which negotiations

began for the procurement of weapons which Servotech

would attempt to export to South Africa. This evidence

shows Servotech initiated contact and followed through

without any evidence of prodding or inducement by the

government or its informant.’* Clearly, then, Towers and

Parks were predisposed to commit this crime, which was

avoided only through the voluntary participation of Gary

Howard.

Moreover, the evidence shows Towers and Parks were

more than just predisposed to commit the crime. The

nature of Towers’ and Parks’ involvement in the scheme

as “predisposed active participant[s],” see Tobias, 662

F.2d at 387, dramatically dilutes Servotech’s claim of

government misconduct. Towers and Parks planned the

entire transaction and were fully committed to its execu-

tion. After receiving an arms order from the Armaments

Corporation of South Africa, Ltd., Servotech initiated

and completed negotiations with Howard for the arms

purchases. Servotech’s agents obtained a phony end use

certificate for delivery to the Sudan, supplied the money

and arranged air transport with Montana-Austria.

Throughout this scheme, Servotech’s role predominated.

By procuring the arms, government agents played only

a small, a!beit instrumental, part in the process.

12. Cf. Williamson v. United States, 311 F.2d 441, 445 (Sth Cir.

1962) (Information supplied by an informer pursuant to a contingent

fee arrangement whereby the informer was to provide evidence against

named individuals for crimes not yet committed presented obvious

“opportunities for abuse.’’).

lla

[3] In reviewing the government's role, we find noth-

ing irregular or outrageous in the fact that Customs

actually purchased the weapons after Servotech wired

money to Howard, who in turn transferred a portion

of the money to Customs. After being alerted to Towers’

and Parks’ predisposition to export arms illegally, the

government was entitled to test their intent to atternpt

this crime by putting these weapons at their disposal and

to institute forfeiture proceedings upon commission of

the crime. The fact that government officers or employees

merely afforded the opportunity or means for the com-

mission of the offense will not defeat the resulting crimi-

nal penalties. United States v. Russell, 411 U.S. 423,

435; 93 S.Ct. 1637, 1644, 36 L.Ed.2d 366 (1973);

United States v. Tobias, 662 F.2d 381, 384 (Sth Cir.

1981). We see no reason not to apply this tenet to

civil forfeiture penalties as well.

4] Nor do we find fault in what Servotech claims

were ‘weeks of duplicity” during which government

undercover agents worked with Towers and Parks to

execute the illegal transport. Just as artifice and stratagem

will not defeat criminal prosecution, the mere fact of

deceit will not defeat forfeiture.**

Contrary to Servotech’s assertions, we do not see how

Towers and Parks were led down the “primrose path”

against their will. The government may have followed

13. For examples of cases upholding the use of deception by gov-

ernment agents to expose criminal activity, see United States v. Rus-

sell, 411 U.S. 423, 435-36; 93 S.Ct. 1637, 1645, 36 L.Ed.2d 366

(1973): Lewis v. United States, 385 U.S. 206, 208-09, 87 S.Ct. 424,

425-27, 17 L.Ed.2d 312 (1966); Sorrells v. United States 287 US.

435, 441-42, 53 S.Ct. 210, 212, 77 L.Ed. 413 (1932); United States

v. Lane, 693 F.2d 385, 388 (Sth Cir. 1982); Umited States v. Todias,

662 F.2d 381, 386 (Sth Cir. 1981).

12a

Towers and Parks down that path, but Towers and Parks

were clearly in the lead. There was no overreaching on

the part of government agents, and the degree of govern-

ment involvement when considering the totality of the

circumstances was not outrageous.’* We find no govern-

ment misconduct and hence no due process violations.

Because our holding is based on a finding of no govern-

ment misconduct, we expressly pretermit as an issue

whether government misconduct, if present, would affect

forfeiture.

In its second argument, Servotech asserts that as a

matter of law no illegal attempt to export arms was ever

made by Servotech’s agents, Towers and Parks. There

are two aspects to this argument. Servotech argues that

because the alleged export attempt was not “presently

imminent,” it technically was not an “attempt” under the

law. Servotech also argues that at the time of arrest no

arms export regulations were in force to make their at-

tempt to export illegal.

14. Our decision is in accord with the due process related entrap-

ment cases of this circuit. See, e.g., United States v. Lane, 693 F.2d

385, 387 (5th Cir. 1982) (Contingent fee payments did not violate

due process when info. mant voluntarily approached police with in-

terest in becoming informant and government did not target indi-

viduals for informant’s efforts); United States v. Nicoll, 664 F.2d

1308 (5th Cir. 1982) (Although DEA agents initiated contact, de-

fendant actively negotiated deal for cocaine); United States v.

Tobias, 662 F.2d 381 (5th Cir. 1981) (Government conduct was

not outrageous where DEA set up chemical supply company to

detect illicit drug manufacture and urged defendant to manufacture

amphetamines after he cancelled his order for cocaine supplies) ;

United States v. Gray, 626 F.2d 494 (5th Cir. 1980) (No due process

violations; although government agents not only suggested the drug

smuggling scheme, but also furnished defendants with repair services,

an air strip and a crew).

13a

We find the argument that Servotech’s actions did not

rise to the level of a bona fide attempt without merit. Un-

like the cases Servoteci: relies on to support its claim that

aS a matter of law imminence was absent in this case,’®

Towers and Parks had more than “mere intention.” See

United States v. Moreno, 182 F.2d 258, 259 (Sth Cir.

1950). These weapons were not merely stored in a ware-

house subject to a vague intention to unlawfully export

them at a distant time in the future. Cf. Moreno, 182

F.2d at 259 (tires intended to be illegally exported to

Mexico stored in claimant’s home). Towers and Parks

took specific and significant steps toward fulfilling their

intent. Besides ordering the weapons and securing air

transportation and phony documents, Towers and Parks

arrived at the airport on the scheduled day of departure

and were inspecting the weapons immediately prior to

loading the airplane.

[5,6] Thus, they acted beyond mere preparation, in

such a way that all steps had *een taken towards com-

mission of the crime itself.'* That the weapons were at

15. Much of Servotech’s argumeat hinges on cases which focus

on outmoded statutory language. See e.g., United States v. Moreno,

182 F.2d 258 (Sth Cir. 1950); Rimmer v. United States, 172 F.2d

954 (Sth Cir. 1949). These cases were decided prior to 1953 when

the United States was entitled to forfeiture when “the property seized

shall appear to have been about to be’’ unlawfully exported. 22 U.S.C.

§ 401 (emphasis added). However, 22 U.S.C. § 401 has been amended.

The pertinent language now permits forfeiture whenever there is

probable cause to believe that arms or munitions of war “are intended

to be or are being” exported. (Emphasis added). The “about to”

language upon which Servotech centers its argument for “present

imminence” has been excised. Consequently, we find the authority

Servotech cites unpersuasive.

16. Servotech does not complain of the court’s charge to the jury

on “attempt” which was as follows:

By the term “attempt,” the law means acting beyond mere

preparation in such a way that all steps have been taken towards

commission of the crime itself.

l4a

the airport ready to be loaded on an airplane that would

depart for South Africa within hours is sufficiently im-

minent to qualify as an illegal attempt, regardless of

whether the weapons were actually loaded on the plane

or whether the plane was set in motion toward actual

departure. The fact that, unbeknownst to Towers and

Parks, undercover government involvement made any

actual export impossible does not alter the jury’s finding

sufficient intent and overt acts to warrant a conclusion

of attempted export. when the facts show that neither the

intention to export nor the plan by which it would be

carried out have been abandoned, but rather, both are

actually continuing, an attempt to export illegally has

beer made as a matter of law. Zarranz v. United States,

182 F.2d 650, 652 (Sth Cir. 1950).

Servotech’s second argument related to the crime of

attempt contends that the federal regulations on which the

government based forfeiture of the weapons do not apply

to attempted export. Servotech claims these regulations

apply only to imports and that at the time of the seizure

no law had been promulgated to proscribe attempts to

export weapons.

Servotech structures its argument on a series of presi-

dential executive orders issued to implement enforcement

of arms control statutes.’’ President Eisenhower origin-

17. Section 414 of the Mutual Security Act of 1954 provided the

original authority for issuance of the executive orders relied on by

Servotech. This section is now codified at 22 U.S.C. § 2278 and reads

in pertinent part as follows:

In furtherance of world peace and the security and foreign policy

of the United States, the President is authorized to contro! the import

and the export of defense articles and defense services and to provide

foreign policy guideance to persons of the United States involved in

the export and import of such articles and services. The President

is authorized to designate those items which shall be considered as

15a

ally delegated his authority under these statutes to the

Secretary of State in Executive Order 10575. Executive

Order 10973, signed by President Kennedy, created regu-

lations to control international arms trafficking. These

regulations, embodied in 22 C.F.R. articles 121-127 de-

lineate the munitions list, registration and licensing re-

quirements, and the violations, penalties, and administra-

tive remedies for exports or attempted exports of listed

munitions without a license. Servotech argues that Exec-

utive Order 11432, signed by President Johnson on Oc-

tober 22, 1968, abrogated these arms regulations as they

pertained to export. Specifically, Servotech cites the fol-

lowing language from Executive Order 11432 to support

its contention:

Sec. 2. All regulations issued and presently in effect

pursant to Section 414 of the Mutual Security Act

of 1954, as amended, shall, insofar as they relate to

control of the import of arms, ammunition and im-

plements of war, including technical data relating

thereto, continue in effect and be administered by the

Secretary of the Treasury until revoked or super-

ceded by him. All pending applications for import

licenses not acted upon by the Secretary of State at

the date of this order shall be transferred to the

Secretary of the Treasury for appropriate action.

(Emphasis added).

Servotech claims this executive order abrogated all

export and import regulations, but immediately renewed

only import regulations as indicated by the emphasized

defense articles and defense services for the purposes of this section

and to promulgate regulations for the import and export of such

articles and services. The items so designated shall constitute the

United States Munitions List.

22 U.S.C. § 2778(a) (1).

16a

language above. Servotech asserts that subsequent to

Executive Order 11432 all export regulations vanished.

Thus, Servotech reasons that at the time the weapons

were seized the regulations embodied in 22 C.F.R. articles

121-127 were either promulgated without authority or

pertained only to the import of arms and did not proscribe

the export activity in question.

[7] This interpretation is implausible. Executive Order

11432 abrogated neither import nor export laws. It merely

transferred the administration of import regulations from

the Secretary of State to the Secretary of the Treasury.

Export regulations remained in effect, unaffected by Ex-

ecutive Order 11432 and therefore, fully operable to

proscribe Servotech’s attempt to export munitions to South

Africa without a license.

The government cross appeals to contest the denial of

forfeiture as to the Boeing 707. The jury found, based

on a preponderance of the evidence, that (1) the owner,

Fg, had not consented to or participated in the illegal

attempt to export the weapons; and (2) the operator of

the aircraft, Montana-Austria, did consent to and parti-

pate in the illegal export attempt. In accord with this

finding, the trial judge denied forfeiture and returned the

aircraft to Fg.

The court ruled, as a matter of law, that the aircraft

was a common carrier and, therefore, subject to the

stsatutory common carrier exception to forfeiture under

19 U.S.C. § 1594. However, because the jury concluded

that Montana-Austria, the operator of the aircraft, did

consent to the illegal act, the statutory common carrier

«sonic

17a

exception could not be invoked to protect the plane from

forfeiture. We agree.

The district court based denial of forfeiture on the due

process exception to forfeiture suggested by the United

States Supreme Court in Calero-Toledo v. Pearson Yacht

Leasing Co., 416 U.S. 663, 94 S.Ct. 2080, 40 L.Ed.2d

452 (1974). In Calero-Toledo, the Supreme Court per-

mitted forfeiture of a leased pleasure yacht after police found

marijuana aboard. The Supreme Court upheld the seizure

and forfeiture as constitutional despite lack of prior

notice or hearing and despite the fact that the lessor was

neither involved in nor aware of the unlawfully use of the

yacht. “Statutory forfeiture schemes are not rendered un-

constitutional because of their application to the property

interests of innocents.” 416 U.S. at 680, 94 S.Ct. at 2090.

Because the vessel is treated as the offender without re-

gard to the owner’s conduct, “the innocence of the owner

of property subject to forfeiture has almost uniformly

been rejected as a defense.” Jd. at 683, 684-86, 94 S.Ct.

at 2092, 2093. The Supreme Court also noted, in dicta,

that forfeiture may be “unduly oppressive” in circumstances

where an owner “proved not only that he was uninvolved in

and unaware of the wrongful activity, but also that he had

done all that reasonably could be expected to prevent the

proscribed use of his property.” Id., at 689-90, 94 S.Ct.

2094-95. The Supreme Court suggested that should an

innocent property owner meet this standard, forfeiture

could raise a due pocess question. Jd. However, the owner

in Calero-Toledo did not meet this exception because no

allegation or proof was offered that the company did all

that it reasonably could to avoid having its property put

to unlawful use. /d. at 690, 94 S.Ct. at 2095.

18a

This two-pronged test was applied by the district court

to deny forfeiture of the 707. The first prong of the test,

“uninvolved in and unaware of the wrongful activity,” was

decided by the jury in answering its special verdict. The

correctness of this determination is not at issue. The

second prong, requiring a property owner to do “all that

reasonably could be expected to prevent the proscribed

use of his property” was found by the district judge in

response to Fg’s Motion for Finding and Judgment. To

reach its conclusion that “Fg did all that . . . reasonably

could be expected of an aircraft leasing company to pre-

vent illegal use of its aircraft,” the district court made

three underlying specific fact findings: (1) Fg had in-

structed Montana-Austria in the aircraft lease to not

transport goods “whose transportation is prohibited by

national or international provisions;”* (2) Fg had in-

structed Montana-Austria regarding the use of the aircraft;

and (3) Fg had stationed an agent in Montana-Austria’s

office to supervise cargo shipments. From these findings

the district court reached the factual conclusion that Fg

had met the second prong of the test outlined by the

Supreme Court in Calero-Toledo.

These underlying findings were based on the testimony

of Fg’s sole owner, Carl Press. The government does not

dispute these findings, but rather, asserts that their cumu-

lative effect fails to meet the standard laid out by the

Supreme Court in the exception to the Calero-Toledo doc-

trine. We agree.

A party whose property has been seized has the burden

of proof to show he has done all that reasonably could

be expected to prevent the illegal use of his property.

18. See supra note 5.

19a

That burden cannot be defined in precise, universal terms.

Its operative texture—reasonableness—depends on the

facts of the particular situation to which it is applied. We

can only observe that “reasonably” is woven into the stout

fabric of “all that could be expected.” The standard was

intended to be high. However, it cannot be so strict that

it fails to consider commercial realities that face those

who transact business in the international marketplace.

Each of the district court’s specific findings is supported

by the record and therefore not clearly erroneous. How-

ever, the record reveals that these actions were taken in

the normal course of Fg’s business as leasor to Montana-

Austria, prior to the occurrence of the events which led

to seizure of the airplane. These findings do not relate

to the actions Press took upon being alerted to possible

illegal conduct by Montana-Austria.

The evidence concerning Montana-Austria’s activities

during the bulk of the lease period disclosed no reason

to suspect it was involved in illegal activity. Press’ periodic

checks of Montana-Austria’s operations disclosed no more

than that the charter service routinely transported passen-

gers, and on rare occasion cargo, to various parts of the

world. The normalcy of these operations changed how-

ever, when Press was told by his delegate that Montana-

Austria requested a stop off in Johannesburg on its way

to the Sudan. Press testified that upon hearing this he was

very upset, that he felt this change would be illegal with-

out a flight plan and asked his delegate in Vienna to make

certain there were proper documents and licenses for a

flight from Houston to Johannesburg.*®

19. Press testified to the following at trial:

I had a phone call from Vienna, and my delegate in Vienna told

me. And if I recall correctly, this was on a Friday or on a

20a

[8,9] Once Press was put on notice that Montana-

Austria was about to engage in activity with his property

that he thought would be illegal, his duty to do “all that

reasonably could be expected” to prevent forfeiture in-

creased. Strict forfeiture laws serve to prevent negligent

entrustment of property. “To the extent that such for-

feiture provisions are applied to lessors, bailors, or secured

creditors who are innocent of any wrongdoing, confisca-

tion may have the desirable effect of inducing them to

exercise greater care in transferring possession of their

property.” Calero-Toledo, 416 U.S. at 467-68, 94 S.Ct.

at 2094. Thus, when Press became aware that possible

illegal activity was afoot, he should have known he could

no longer rely on the course of action he had been taking

prior to his awareness of any irregularity. Once his sus-

picions were aroused he had an affirmative duty to take

more effective steps to protect his property from illegal

use and subsequent forfeiture. Yet, the proof shows that

he merely instructed his delegate to secure proper docu-

mentation.

Here, the plane was seized within forty-eight hours of

Press’ conversation with his delegate in Vienna. Acknowl-

Saturday, meaning two days before the aircraft was seized in

Houston, and he called me in regard to some other matters con-

cerning my businesses, and at the end he mentioned just by

chance, I think, said that Montana wanted to use the aircraft

on a charter to Khartoum; said they had been asking if they

could, while in flight to Khartoum, could change flight plans into

Johannesburg, South Africa, and that really upset me. I said,

“We don’t do any of such things.” If they know their destination,

it’s Johannesburg, since they have to fly a flight plan into

Johannesburg and not take any detours, because I felt that this

would be illegal. I further asked my delegate in Vienna to make

sure that there would not be a charter signed or accepted with-

out having proper documents, export licenses and whatever other

official documents would be required to carry out that flight from

Houston into Johannesburg.

2la

edging that time and distance could have deterred per-

sonal involvement, this court need not require of Press

that he contact regulatory authorities to determine whether

proper flight plans were filed or the required end use cer-

tificates had been obtained. But we must reverse if we

insist on no more than what Press himself acknowledged

was necessary—a check on the documents required to fly

from Houston to Johannesburg. Even using this minimum

gauge, Press has failed to meet the standard. We find the

record devoid of any proof that Press’ agent checked with

Montana-Austria or reported back to Press or that Press

ever checked with his agent or anyone else to determine

that his instructions had been executed.*° The finding of

the district court that Press did all that reasonably could

be expected of an aircraft leasing company to prevent this

illegal use of its aircraft is not supported by the record

and is clearly erroneous.

The judgments appealed from are affirmed as to the

forfeiture of the weapons seized and reversed and ren-

dered as to the denial of forfeiture of the Boeing 707 air-

craft. Costs of the appeals are assessed equally against

Servotech International Establishment and One Boeing

707 aircraft.

AFFIRMED IN PART and, IN PART, REVERSED

aud RENDERED.

20. To the contrary, Press testified as follows:

After I had that telephone call on Friday or Saturday, I flew

back to Germany. I was at that time in New York, and Mon-

day morning I had a call from an Austrian newspaper asking

me if I would have any comment or if I would want to say

anything about the seizure of a Montana operated airciaft of

the type 707. And I was very upset and angry, and I told him

I have no knowledge of this... .

Next thing, I called our delegate in Vienna and asked him

about it. And he was also not aware of this incident, and he

said, “I also have to check... .”

22a

APPENDIX B

EXECUTIVE ORDERS

No. 10973

November 7, 1961, 26 F.R. 10469

ADMINISTRATION OF FOREIGN ASSISTANCE

AND RELATED FUNCTIONS

By virtue of the authority vested in me by the Foreign

Assistance Act of 1961 (75 Stat. 424) and section 301

of: title 3 of the United States Code, and as President

of the United States, it is hereby ordered as follows:

PART I. DEPARTMENT OF STATE

Section 101. Delegation of functions. Exclusive of

the functions otherwise delegated, or reserved to the

President, by the provisions of this order, and subject

to the provisions of this order, there are hereby delegated

to the Secretary of State (hereafter in this Part referred

to as the Secretary) all functions conferred upon the

President by . . . (4) the unrepealed provisions of the

Mutual Security Act of 1954 (68 Stat. 832; 22 U.S.C.

1750 et seq.), and...

* * *

Sec. 105. Munitions control. In carrying out the

functions conferred upon the President by section 414

of the Mutual Security Act of 1954, the Secretary shall

consult with appropriate agencies. Designations, includ-

ing changes in designations, by the Secretary of articles

which shall be considered as arms, ammunition, and

implements of war, including technical data relating

23a

thereto, under that section shall have the concurrence

of the Secretary of Defense.

* *

PART III. OTHER AGENCIES

Sec. 301. Department of the Treasury. There is here-

by delegated to the Secretary of the Treasury the function

conferred upon the President by the second sentence of

section 612 of the Act.

* * *

PART IV. RESERVED FUNCTIONS

Sec. 401. Reservation of functions to the President.

There are hereby excluded from the functions delegated

by the foregoing provisions of this order:

* * *

(b) The functions conferred upon the President by

the Act and section 408(b) of the Mutual Security Act

of 1954 with respect to the appointment of officers re-

quired to be appointed by and with the advice and consent

of the Senate and with respect to the appointment of

officers pursuant to section 624(c) of the Act and the

function so conferred by section 204 of the Act of assign-

ing Officers to the Development Loan Committee.

* * *

(f) That under section 523(d) of the Mutual Security

Act of 1954.

24a

Sec. 604. References to orders and Acts. Except as

may for any reason be inappropriate:

(a) References in this order or in any other Executive

order to (1) the Foreign Assistance Act of 1961 (in-

cluding references herein to “the Act”), (2) unrepealed

provisions of the Mutual Security Act of 1954, (3) any

other act which relates to the subject of this order, or

(4) any provisions of any thereof shall be deemed to

include references thereto, respectively, as amended from

time to time.

* * *

(d) References in this order or in any other Executive

‘order to this order or to any provision thereof shall be

deemed to include references thereto, respectively, as

amended from time to time.

* * *

Sec. 606. Saving provisions. Except to the extent

that they may be inconsistent with this order, all deter-

minations, authorizations, regulations, rulings, certificates,

orders, directives, contracts, agreements, and other actions

made, issued, or entered into with respect to any function

affected by this order and not revoked, superseded, or

otherwise made inapplicable before the date of this order,

shall continue in full force and effect until amended,

modified, or terminated by appropriate authority.

* * *

JoHN F. KENNEDY

THE WHITE HOUSE

November 3, 1961.

ein eet Cet ARO te Ok te Si HI NPI ED i A at Neat at Ny tal Mae

UN Ae ge Sl Nae es Dn haalt a

- i le nae

25a

APPENDIX ©

EXECUTIVE ORDERS

No. 11432

October 24, 1968, 33 F.R. 15791

CONTROL OF ARMS IMPORTS

By virtue of the authority vested in me by Section 414

of the Mutual Security Act of 1954, as amended (22

U.S.C. 1934), and Section 301 of Title 3 of the United

States Code,*? and as President of the United States, it

is ordered as follows:

Section 1. Section 301 of Executive Order No. 10973

of November 3, 1961,°° is hereby amended to read as

follows:

“Sec. 301. Department of the Treasury. There are

hereby delegated to the Secretary of the Treasury:

“(a) The function conferred upon the President by the

second sentence of Section 612 of the Act.

“(b) So much of the functions conferred upon the

President by Section 414 of the Mutual Security Act of

1954, as amended, as relate to control of the import of

arms, ammunition and implements of war, including tech-

nical data relating thereto. In carryirz out such functions

the Secretary of the Treasury shall consult with appropri-

ate agencies, and on matters affecting world peace, the

61. 22 U.S.C.A. § 1934.

62. 3 US.CA. § 301.

63. 22 US.C.A. § 2381 note.

26a

external security and foreign policy of the United States

he shall be guided by the views of the Secretary of State.

Designations, including changes in designations, or articles

subject to import control under Section 414 shall have

the concurrence of the Secretary of State and the Secretary

of Defense.”

Sec. 2. All regulations issued and presently in effect

pursuant to Section 414 of the Mutual Security Act of

1954, as amended, shall, insofar as they relate to control

of the import of arms, ammunition and implements of

war, including technical data relating thereto, continue

in effect and be administered by the Secretary of the

Treasury until revoked or superseded by him. All pend-

ing applications for import licenses not acted upon by

the Secretary of State at the date of this order shall be

transferred to the Secretary of the Treasury for appropri-

ate action.

LYNDON B. JOHNSON

THe Wuite House

October 22, 1968.

UA ice 4 a

27a

APPENDIX D

EXECUTIVE ORDERS

No. 11959

Jan. 18, 1977, 42 F.R. 4315

ADMINISTRATION OF FOREIGN ASSISTANCE

AND RELATED FUNCTIONS

Rv virtue of the authority vested in me by the Con-

stitution and statutes of the United States of America,

including Section 621 of the Foreign Assistance Act of

1961, as amended (22 U.S.C. 2381), and Section 301

of Title 3 of the United States Code, and as President

of the United States of America, Executive Order No.

10973, as amended, is hereby further amended as follows:

* * *

Sec. 2. Section 105 is revoked and the following new

section is substituted therefor:

“Sec. 105. Allocation of Foreign Assistance. In carry-

ing out the functions conferred upon the President by

section 653 of the Act, the Secretary of State shall consult

with the Director of the Office of Management and

Budget.”.

* * *

Sec. 6. Section 301 is amended to read as follows:

“Sec. 301. Department of the Treasury. There are

delegated to the Secretary of the Treasury the functions

conferred upon the President by the third sentence of

section 102(d) as it relates to international development

28a

organizations in which the United States is represented

by the Secretary of the Treasury, section 301(e)(3) as

it relates to organizations referred to in section 301(e)

(2), the second sentence of section 612(a), section 634

(f), and section 634(g) of the Act. The Secretary of the

Treasury shall continue to administer any open special

foreign country accounts established pursuant to former

section 514 of the Act as enacted by section 201(f) of

Public Law 92-226 (86 Stat. 25) and repealed by Sec-

tion 12(b)(5) of Public Law 93-189 (87 Stat. 722).”.

* * sd

GERALD R. Forp

THE WHITE HOUSE

January 18, 1977.

Reet cs ee

29a

APPENDIX E

PRESIDENTIAL DOCUMENTS

Executive Order 12444 of October 14, 1983

Continuation of Export Control Regulations

By the authority vested in me as President by the Con-

stitution and laws of the United States of America, in-

cluding section 203 of the International Emergency

Economic Powers Act (50 U.S.C. 1702) (hereinafter

referred to as “the Act), and 22 U.S.C. 287c,

I, RONALD REAGAN, President of the United States

of America, find that the unrestricted access of foreign

parties to United States commercial goods, technology,

and technical data and the existence of certain boycott

practices of foreign nations constitute, in light of the

expiration of the Export Administration Act of 1979,

an unusual and extraordinary threat to the national se-

curity, foreign policy and economy of the United States

and hereby declare a national economic emergency to

deal with that threat.

Accordingly, in order (a) to exercise the necessary vigil-

ance over exports from the standpoint of their significance

to the national security of the United States; (b) to

further significantly the foreign policy of the United

States, including its policy with respect to cooperation

by United States persons with certain foreign boycott

activities, and to fulfill its international responsibilities;

and (c) to protect the domestic economy from the ex-

cessive drain of scarce materials and reduce the serious

30a

economic impact of foreign demand, it is hereby ordered

as follows:

* * *

Section 3. Provisions for the administration of section

38(e) of the Arms Export Control Act (22 U.S.C. 2778

(e)) may be made and shall continue in full force and

effect until amended or revoked under the authority of

section 203 of the Act (50 U.S.C. 1702). To the extent

permitted by law, this Order also shall constitute authority

for the issuance and continuation in full force and effect

of rules and regulations by the President or his delegate,

and all orders, licenses, and other forms of administrative

action issued, taken or continued in effect pursuant there-

to, relating to the administration of section 38(e).

* * *

RONALD REAGAN

THE WHITE HOUSE

October 14, 1983.

Se ee ee ee ne a an’

3la

APPENDIX F

EXECUTIVE ORDERS

No. 12451

Executive Order 12451 of December 20, 1983

Continuation of Export Control Regulations

48 F.R. 56563

By the authority vested in me as President by the Con-

stitution and laws of the United States of America, in-

cluding section 203 of the International Emergency Eco-

nomic Powers Act (50 U.S.C. 1702) (hereinafter re-

ferred to as “IEEPA”), 22 U.S.C. 287c, and the Export

Administration Act of 1979, as amended (50 U.S.C.

App. 2401 et seq.) (hereinafter referred to as “the Act),

it is hereby ordered as follows:

Section 1. In view of the extension by Public Law 98-

207 (December 5, 1983), of the authorities contained

in the Act, Executive Order No. 12444°° of October 14,

1983, which continued in effect export control regulations

under IEEPA is revoked, and the declaration of eco-

nomic emergency is rescinded.

Sec. 2. The revocation of Executive Order No. 12444”

shall not affect any violation of any rules, regulations,

orders, licenses and other forms of administrative action

under that Order which occurred during the period that

Order was in effect. .. .

* * *

29. 1983 U.S. Code Cong. & Adm. News Pamphlet No. 8, page

B80.

32a

Sec. 3. All orders, licenses, and other forms of adminis-

trative action issued, taken or continued in effect pursu-

ant to the authority of the IEEPA and Executive Order

No. 12444°° relating to the administration of section 38

(e) of the Arms Export Control Act (22 U.S.C. 2778

(e)) shall remain in full force and effect until amended

or revoked under proper authority.

Sec. 4. This Order shall take effect immediately.

RONALD REAGAN

THE WHITE HOUSE

December 20, 1983.

33a

APPENDIX G

EXECUTIVE ORDERS

No. 12470

Executive Order 12470 of March 30, 1984

Continuation of Export Control Regulations

49 F.R. 13099

By the authority vested in me as President by the Con-

stitution and laws of the United States of America, in-

cluding section 203 of the International Emergency Eco-

nomic Powers Act (50 U.S.C. 1702) (hereinafter re-

ferred to as “the Act”), and 22 U.S.C. 287c,

I, RONALD REAGAN, President of the United States

of America, find that the unrestricted access of foreign

parties to United States commercial goods, technology,

and technical data and the existence of certain boycott

practices of foreign nations constitute, in light of the

expiration of the Export Administration Act of 1979,

an unusual and extraordinary threat to the national se-

curity, foreign policy and economy of the United States

and hereby declare a national economic emergency to

deal with that threat.

Accordingly, in order (a) to exercise the necessary vigil-

ance over exports from the standpoint of their signifi-

cance to the national security of the United States; (b)

to further significantly the foreign policy of the United

States, including its policy with respect to cooperation

by United States persons with certain foreign boycott

activities, and to fulfill its international responsibilities;

BEST AVAILABLE COPY

34a

and (c) to protect the domestic economy from the ex-

cessive drain of scarce materials and reduce the serious

economic impact of foreign demand, it is hereby ordered

as follows:

* * *

Sec. 3. Provisions for the administration of section 38 (e)

of the Arms Export Control Act (22 U.S.C. 2778(e))

may be made and shall continue in full force and effect

until amended or revoked under the authority of section

203 of the Act (50 U.S.C. 1702). To the extent permitted

by law, this Order also shall constitute authority for the

issuance and continuation in full force and effect of all

rules and regulations by the President or his delegate,

and ali orders, licenses, and other forms of administrative

action issued, taken or continued in effect pursuant there-

to, relating to the administration of section 38(e).

* * *

RONALD REAGAN

THE WHITE HOUSE

March 30, 1984.

35a

APPENDIX H

PRESIDENTIAL DOCUMENTS

Presidential Determination No. 85-4 of February 4, 1985

Eligibility of Malawi To Make Purchases of Defense

Articles and Defense Services Under the

Arms Export Control Act

Memorandum for the Honorable George P. Shultz,

the Secretary of State

Pursuant to the authority vested in me by Section 3(a) (1)

of the Arms Export Control Act, I hereby find that the

furnishing of defense articles and defense services to the

Government of Malawi will strengthen the security of the

United States and promote world peace.

You are directed on my behalf to report this finding to

the Congress.

This finding shall be published in the Federal Register.

RONALD REAGAN

THE WHITE HOUSE

Washington, February 4, 1985.

AVAILABLE COPY &

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.