Memorandum from Dr Sibylle Bauer
THE ROLE OF GERMAN CUSTOMS IN EXPORT CONTROL
1. INTRODUCTION
Customs plays a crucial role in enforcing export
controls. Enforcement aims to prevent the proliferation of WMD
and other export control violations, and to implement the EU acquis
and obligations in the field of non-proliferation and counter-terrorism.
Enforcement relates to export control legislation but is closely
connected to other criminal statutes, such as conspiracy, money
laundering, and anti-terrorism legislation.
Enforcement tasks include: preventing and detecting
violations of national laws and regulations, denying exports that
lack authorization, investigating and prosecuting suspected violations,
and helping partners in international law enforcement cooperation.
The organizational distribution of legal powers to perform these
tasks and their precise implementation varies from country to
country. In Germany, the Zollkriminalamt (ZKA, literally
"Criminal Customs office" or "Customs Office for
Criminal Investigations") has comparatively wide-ranging
powers in preventing and investigating export control violations.
The German model is presented in detail in this paper.
2. THE ROLE
OF THE
ZOLLKRIMINALAMT IN
GERMAN EXPORT
CONTROL
The Zollkriminalamt is a federal authority
directly subordinate to the Federal Ministry of Finance. It was
established in July 1992 and is based in Cologne. Its origins
go back to the Customs Criminological Institute, ZKI, established
in 1952. The ZKI focused on forensic matters, but over the years
its powers and tasks were expanded. It was authorised to coordinate
the Customs Investigation Service, and to conduct investigations.
In the early 1990s, export control laws were tightened and the
ZKA established through expansion of the powers, tasks, equipment
and staff of the ZKI. This was intended to enable the agency to
prevent export control scandals such as "Rabta", the
setting up of a chemical weapons factory in Libya by a German
company. The scandal led to wide-ranging changes in the export
control law. Criminal penalties were stiffened considerably by
transforming certain violations from civil breaches of administrative
regulations to a criminal offence; raising the maximum prison
sentence for serious export control violations from three to 15
years; and introducing new criminal offences, such as breaches
of a UN embargo (in 2006 extended to EU embargoes decided through
a Common Position). Cooperation between relevant agencies was
enhanced. A catch-all clause introduced in 1990. and later included
in the EU dual-use regulation, applies not only to WMD end-use
and embargoed destinations, but also to military end-use in certain
destinations, such as Iran (country list K).
Since entry into force of the Law on the Zollkriminalamt
and the Customs Investigation Offices in 2002, the restructured
Customs Investigations Offices are directly assigned to the ZKA,
and no longer to the regional finance offices. Currently, there
are eight customs investigation offices and 24 branches. In 2004,
the ZKA and Customs Investigations Offices employed approximately
3,100 people. In 2004 there were 16,344 investigations, of which
507 concerned the foreign trade law.
The ZKA has the following tasks:[93]
— "Supporting the Customs Investigation
Offices (Zollfahndungsamter) and other offices of
the Customs Administration in the prosecution and prevention of
criminal offences and administrative offences under the Fiscal
Code and other laws;
— Gathering and evaluating information
for the Customs Investigation Service, making it available to
the Customs Investigation Offices and other Customs units;
— gathering and exchange of data in
information systems run by the Customs Administration and systems
in which the Customs Administration participates;
— cooperation in the control of the
trade with foreign economic areas;
— control of mail and telecommunication
for the prevention of criminal offences under the Foreign Trade
Law and the War Weapons Control Act;
— cooperation in the combat of:
— illegal transfer of technologies;
— subsidy fraud in the agricultural
sector;
— central unit for the exchange of
information in the European Customs Administrations" combat
of drug smuggling by land, air and sea transport;
— control of the trade in precursor
substances prone to be misused for the illicit manufacture of
narcotic drugs;
— counteracting money laundering with
the help of a "Joint Finance Investigation Group Bundeskriminalamt/Zollkriminalamt";
— central agency of the Customs Investigation
Service in the area administrative and judicial assistance, within
the limits of the authorization by the Federal Ministry of Finance;
— coordinating and directing Customs
Investigation Offices" measures in investigations with more
than local consequences; and
— advanced technical training for Customs
Investigation Officers."
While not all of these tasks are directly relevant
to counterproliferation, the same criminal networks have been
used to traffic drugs, human beings, military equipment and dual-use
items. Similarly, financial traces can lead to the prosecution
and conviction of proliferators.
3. ENFORCEMENT
TOOLS AND
MECHANISMS
German customs has legal powers to: physically
examine goods, take samples, examine documents (eg business correspondence,
bookkeeping documents as well as private correspondence), search
property and persons, seize evidence, monitor the market, preventively
monitor/intercept telecommunications and mail (following a court
order and a specified procedure), control exports, and conduct
administrative and criminal enforcement. If a customs officer
has doubts about an export, the customs law provides that it is
up to the exporter to remove those doubts.
Risk analysis and product identification:
To identify dual-use items, which poses a challenge to customs,
identification tools and a correlation list (correlating the categories
of control lists and customs codes) are used, and special training
courses are provided to customs officers. Customs also relies
on technical expertise in the German licensing agency (Federal
Office for Economics and Export Control, Bundesamt fr Wirtschaft
und Ausfuhrkontrolle, BAFA). For analysis and data collection
purposes, the ZKA established a central internet research unit.
Risk assessment is a key feature of export control.
Through collecting and reviewing export documents and trade data
customs looks for signs of shipments to countries of concern,
which in turn could lead to the discovery of a possible violation
and an investigation. Customs also helps to build a watchlist
and identifies networks, acquisition patterns and supply routes.
ZKA uses an elaborate electronic data collection system (COBRA,
currently in the process of being updated), which can be accessed
by customs offices.
Company audits: The finance authority
and BAFA can request information to enforce the implementation
of foreign trade laws. To this purpose, the Foreign Trade Act
(para. 44) authorises the finance authority to conduct audits,
and BAFA can contribute experts to such audits. All those directly
or indirectly involved in foreign trade are obliged to provide
information (shipping agents, individuals, banks, brokers, suppliers
etc.). Foreign trade audits (Aussenhandelsprufungen)
include both routine audits and special audits initiated due to
information provided through sources such as government agencies,
information generated through other audits, data in the electronic
risk assessment system etc. Routine audits are conducted with
major exporters of sensitive products in regular intervals. They
involve the examination of documents and ITT to verify compliance
with procedures, licensing requirements, embargoes, and documentation
of foreign financial transactions.
Investigations: The ZKA can conduct its
own investigations and coordinates investigations of the customs
investigations offices. A 2002 law reorganized the Customs Investigation
Service and the tasks and powers of the ZKA. It connected the
customs investigation offices to the ZKA, extended the ZKA's investigative
powers and authorized the ZKA to transfer data directly to police
authorities. In a prosecution, customs helps to build a case by
contributing to the collection and analysis of evidence, and providing
expert testimony.
Interagency and international cooperation:
At the national level, customs cooperates with the licensing
agency, intelligence, the foreign office, the police, prosecutors
etc. Customs works with law enforcement agencies in other countries
and has its own liaison officers in a number of countries. Forms
of international cooperation include the participation of customs
experts in meetings of international export control regimes and
mutual assistance agreements.
Cooperation with licensing authority BAFA:
Close cooperation and shared databases between licensing authorities
and customs are key features of effective enforcement. ZKA has
direct access to the licensing agency's database. Customs provides
important data input into the licensing process, and in turn uses
licensing officers' information and technical expertise. After
an alleged violation, information collected by ZKA and BAFA can
determine the types of items shipped, whether the item was licensable
and whether a license was obtained. Customs and BAFA also cooperate
to conduct reliability checks of exporters, to raise awareness,
to prepare audits of exporting companies and analyse subsequent
reports; and to prepare prosecutions. BAFA has a unit solely dedicated
to the "co-operation with investigating and monitoring authorities".
It supports export procedures at local customs offices, checks
customs inspection reports and assists in investigations.
Information: ZKA publishes information
on the internet and in print regarding a range of subjects, including:
the ZKA, the customs investigation services, export control (explaining
WMD programmes in sensitive countries and mentioning past prosecutions);
and proliferation (a leaflet which briefly explains the role of
customs in preventing proliferation, ways to recognize proliferation
relevant activities, e.g by explaining typical procurement methods,
and contact details of ZKA and customs investigations offices).
In April 2006, the ZKA held a well-attended
three-day information seminar for prosecutors. Speakers included
government agencies involved in a prosecution and covered a wide
range of issues, such as legal provision, the role of different
institutions, threat assessment, investigations, prosecutions
etc.
Outreach: Beyond training its own customs
officers, the ZKA supports specialized training of customs officers
in third countries, in particular EU candidate and accession countries.
This included a two-week training course for Polish customs officers
before accession, and participation in customs training events
in the framework of the 2004 EU Pilot Project implemented by SIPRI
and EU Pilot Project 2005 implemented by BAFA.
4. PROSECUTIONS
According to the German arms export report for
2004, ZKA and the Customs Investigations Offices concluded 24
investigations against a total of 40 individuals during 2004,
of which most were under the foreign trade law and one under the
weapons of war control act. Most of these investigations were
discontinued, one resulted in a fine, and one in a criminal conviction
(four year nine months imprisonment). This involved spare parts
for fighter aircraft and tools for artillery production destined
for Jordan and Iraq.
According to the arms export report for 2003,
26 investigations concluded against a total of 42 individuals
(including five against unknown). Of these, four resulted in convictions:
two separate cases with suspended sentences of two years imprisonment,
one investigation resulting in seven convictions (between four
and six months imprisonment or fines between 6,000 and 14,850€);
and one sentence of two years and 10 months imprisonment. In 2003,
21 investigations against 22 individuals were ongoing.
On the dual-use side, many export control related
prosecutions have resulted in prison sentences over the years,
including the following cases: four years six months imprisonment
and 80,000 German marks fine (equivalent of 40,000€) in a
case which involved the delivery of parts to Iran through falsified
end-use certificates; a four year prison term for shipments of
aluminium tubes to North Korea; and seven years three months imprisonment
for exports destined for Pakistan.
Appendix 1: Organisational chart ZKA [not printed]
June 2006
93 URL <http://www.zollkriminalamt.de>.
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