MOBILE DEVICES, TRAVEL AND CYBER-SECURITY ISSUES FOR

Transcription

1 MOBILE DEVICES, TRAVEL AND CYBER-SECURITY ISSUES FOR DOING BUSINESS IN CHINA Nelson G. Dong Dorsey & Whitney LLP Seattle, WA Orange County Aerospace & Defense Forum Costa Mesa, CA August 1,

2 2013 DEPARTMENT OF DEFENSE WHITE PAPER ON CHINESE MILITARY China utilizes a large, well organized network of enterprises, defense factories, affiliated research institutes, and computer network operations to facilitate the collection of sensitive information and export-controlled technology, as well as basic research and science that supports U.S. defense system modernization. Many of the organizations comprising China s military industrial complex have both military and civilian research and development functions. This network of government-affiliated companies and research institutes often enables the PLA to access sensitive and dual use technologies or knowledgeable experts under the guise of civilian research and development. The enterprises and institutes accomplish this through technology conferences and symposia, legitimate contracts and joint commercial ventures, partnerships with foreign firms, and joint development of specific technologies. As in previous years, China utilized its intelligence services and employed other illicit approaches that involve violations of U.S. laws and export controls to obtain key national security technologies, controlled equipment, and other materials not readily obtainable through commercial means or academia. 3 A SMALL AEROSPACE COMPANY Atmospheric Glow Technologies, Inc. (AGT) founded by Univ. of Tennessee (UT) alumni Had won U.S. Air Force Small Business Innovative Research (SIBR) contracts t Established to commercialize plasma technologies 4 2

3 JOHN REECE ROTH, Ph.D. Physics professor at the University of Tennessee (UT) Highly respected scholar, leading researcher in plasma physics with many publications Held several U.S. patents based on plasma research Had been involved in academic exchanges with foreign scholars, including those in China Scientific consultant to AGT 5 AGT S SBIR RESEARCH U.S. Air Force theory: plasma applied to an airfoil will also affect movement of air over that airfoil and thus aircraft motion In theory, plasma could be manipulated by actuators t to control small aircraft or even munitions traveling at subsonic speeds. However, application of theory technically complex and existing plasma actuators were insufficient to control small munitions AGT won SBIR award to develop this technology for Air Force, utilizing its unique patents, personnel and materials AGT s proposals, reports in Phase I and II contracts confirm technology development was unique to Air Force weapons requirements under those contracts 6 3

4 2006 EVENTS Dr. Roth invited to lecture in China at Fudan University in Shanghai and at Tsinghua University (Shenzhen campus) EVENTS May 26, 2006: Upon reentry into United States from China at Detroit International Airport, Dr. Roth s laptop computer is seized and inspected by Customs and Border Protection officers Had several AGT weekly reports and documents which contained AGT export controlled technical data Had laptop computer which also contained AGT export controlled technical data : Detailed investigation launched by Immigration & Customs Enforcement (ICE) and Federal Bureau of Investigation (FBI) 8 4

5 CASE HISTORY April 2008: AGT s lead physicist pleads guilty to 1-count criminal information charging Arms Export Control Act (AECA) violation May 2008: AGT and Dr. Roth indicted by Grand Jury in E.D. Tenn. 1 count of conspiracy 16 counts of AECA violations 1 count of wire fraud [against UT] August 2008: AGT itself enters into plea agreement and pleads guilty to 10 counts of AECA violations August-September 2008: 7-day jury trial of Dr. Roth alone as remaining defendant Convicted on all 17 counts of indictment t against him July 2009: Dr. Roth sentenced to 48 months in prison, fined January 2011: 6 th Circuit Court of Appeals affirms conviction October 2011: U.S. Supreme Court declines to review conviction 9 CASE ELEMENTS: THE LAPTOP Government inspection of laptop at time of search, seizure at Detroit showed it contained export controlled technical data from AGT research program Government computer forensics indicate laptop was connected to Fudan University network in May s also indicated a Fudan University computer technician examined the laptop when Dr. Roth had technical problems during his China trip Government case suggested reasonable inference that non-u.s. persons had direct access to AGT s export controlled technical data on laptop because Dr. Roth took it to China on his trip 10 5

6 SEARCH & SEIZURE AT THE BORDER U.S. v. Ross, 456 U.S. 798, 823 (1982): luggage carried by a traveler entering the country may be searched at random by a customs officer no matter how great the traveler s desire to conceal the contents may be. Torres v. Puerto Rico, 442 U.S. 465, (1979): The authority of the United States to search the luggage of arriving international travelers is based on its inherent sovereign authority to protect its territorial integrity. By reason of that authority, it is entitled to require that whoever seeks entry must establish the right to enter and to bring into the country whatever he may carry. 9 th CIRCUIT RULING IN ARNOLD CASE U.S. v. Arnold, 533 F.3d 1003 (9 th Cir. 2008), cert. denied, 555 U.S (2009) U.S. traveler returned from the Philippines and interrogated at LAX, including CBP inspection of his laptop containing images of nude women and children Arnold detained and questioned several hours by CBP, resulting in seizure of his laptop as evidence of possession, transportation of child pornography Arnold sought to apply 4 th Amendment protection against unreasonable search and seizure to his laptop p and moved to suppress the evidence found on it 9 th Circuit ruled against Arnold: [only] reasonable suspicion is needed for customs officials to search a laptop or other personal electronic storage devices at the border (emphasis supplied) 6

7 OTHER ELECTRONIC DEVICES AND THE BORDER SEARCH DOCTRINE No 4 th Amendment protection against CBP border searches of: Separate hard drive, flash drive, thumb drive, memory stick: U.S. v. Arnold, 533 F.3d 1003, 1005 (9 th Cir. 2008) Videotape: U.S. v. Linarez-Delgado, 259 F. Appx. 506, 508 (3 rd Cir. 2007) Cell phone: Cancel-Rios v. U.S., 2010 WL , at *3 (D.P.R. Aug. 30, 2010) Other computer equipment: U.S. v. Bunty, 617 F.Supp.2d 359, (E.D. Pa. 2008) CUSTOMS & BORDER PROTECTION INSPECTION, SEIZURES OF DEVICES American Civil Liberties Union (ACLU) s August 2010 report on CBP activities: Between October June 2010, > 6,500 people (almost half of whom were U.S. citizens) traveling to or from U.S. had their electronic devices searched at border Devices searched included laptops, cell phones, cameras, hard drives, flash drives and even DVDs Between October June 2009, cell phones were most commonly searched devices, followed by laptops, digital cameras Between July June 2009, CBP agents transferred data found on searched devices to other unnamed federal agencies over 280 times 7

8 CBP S AUGUST 2009 POLICY CBP Directive No (Aug. 20, 2009): Searches of electronic devices help detect evidence relating to terrorism and other national security matters, human and bulk cash smuggling, contraband, and child pornography. They can also reveal information about financial and commercial crimes, such as those relating to copyright, trademark and export control violations. (emphasis supplied) CBP policy applies to searches, seizures of any computers, disks, drives, tapes, mobile phones and other communication devices, cameras, music and other media players, and any other electronic or digital devices (whether inbound or outbound) COMPLIANCE TIPS FOR TRAVELERS If feasible, carry only clean devices containing only needed materials that have been subject to export control clearance by compliance staff For any technical materials, carry hard copies of: DDTC commodity jurisdiction (CJ), BIS commodity classification request (CCR) papers for export control status Appropriate export licenses from those agencies Consider level, type of materials are now being carried on smart phones, tablets (e.g., ipads) Consider what is being carried on thumb or flash drives, especially those not regularly used but tucked inside small compartments in briefcases and often forgotten or overlooked 8

9 Nelson G. Dong Dorsey & Whitney LLP Columbia Center 701 Fifth Avenue, Suite 6100 Seattle, WA phone: (206) fax: (206)