Unpublished Disposition, 899 F.2d 1226 (9th Cir. 1984)Annotate this Case
UNITED STATES of America, Plaintiff-Appellee,v.Bernardus SMIT, Defendant-Appellant.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Dec. 12, 1989.Decided April 4, 1990.
Appeal from the United States District Court for the Northern District of California; William H. Orrick, Jr., District Judge, Presiding.
Before EUGENE A. WRIGHT, HUG, and LEAVY, Circuit Judges.
Bernardus J. Smit was convicted of exporting computers and related components without the licenses required by the Export Administration Regulations, 15 C.F.R. Secs. 368-399 (1983) ("the Regulations"),1 in violation of the Export Administration Act of 1979, 50 U.S.C.A.App. Secs. 2401-2420 (West Supp.1989) ("the EAA"). Smit was also convicted of making false statements to customs officials, under 18 U.S.C. § 1001 (1988). We affirm the convictions on all counts.
Smit contends that the evidence was insufficient to convict him of conspiracy to violate the Regulations or his license, and also that there is no evidence to support his conviction for violating the Regulations or his license under Counts Two through Eight and Fifteen.
We will affirm a conviction challenged for lack of sufficient evidence if, viewing the evidence in the light most favorable to the prosecution, a rational trier of fact could have found the elements of the crime charged beyond a reasonable doubt. United States v. Terry, 760 F.2d 939, 941 (9th Cir. 1985). Conflicting evidence is resolved in favor of the verdict. United States v. Rush, 749 F.2d 1369, 1372 (9th Cir. 1984).
1. The Chau February 1, 1983 Export (Count Two)
Smit sold Paul Chau an 83/20 computer on February 1, 1983. Sale and delivery took place in the United States. Smit caused Chau to execute a document in which Chau agreed to become responsible for securing the license. Smit therefore argues that under 15 C.F.R. Sec. 372.3(b) (1) (iii) Chau was responsible for securing the license required to export the computer. In essence, Smit argues that the way the sale was structured made Chau the exporter under the Regulations.
We disagree. The facts of this case place Smit outside the scope of 15 C.F.R. Sec. 372.3(b) (1) (iii). Helen Vigneau testified that Smit knew that Chau wanted to take the computer to Hong Kong in a hurry. Trial Transcript 3:314. Tom Chau testified that Smit and Paul Chau discussed the export licensing of this computer at length, and that Paul believed he did not need a license to export the computer. Id. at 3:391-92. Thus, Smit had reason to know that to sell and deliver the computer to Paul Chau would result in its unlicensed export. Smit could not, therefore, sell the computer and stand idly by. We are confident 15 C.F.R. Sec. 372.3(b) (1) (iii) cannot be read to permit a seller to shift the licensing obligation to a buyer when he has reason to know that the buyer will not fulfill the obligation. See 15 C.F.R. Sec. 387.4 ("no person may ... sell ... any commodity ... with ... reason to know that a violation of the Export Administration Act or any regulation, order, or license has occurred, is about to occur, or is intended to occur with respect to any transaction").
We conclude that Smit remained the exporter for purposes of licensing, and it was up to the jury to determine whether Smit exported the computer without the required license. There was evidence to support the conclusion that he did.
2. The Wichmann September 2, 1983 Export, the Mertsching October 17, 1983 Export, and the Smit November 1983 Export (Counts Three through Six and Eight) .
A. The Computer Exports (Counts Three and Five)
The government argues that Smit's convictions under Counts Three and Five should be sustained on the basis that the evidence permitted the jury to conclude that Smit knowingly exported the computers without a license to the People's Republic of China ("PRC"). Smit notes, however, that Counts Three and Five charge him not with exporting computers to the PRC, but with exporting computers to Hong Kong without the required license. Smit is correct. Thus, if the convictions under these counts are to be sustained, it is because Smit's exports to Hong Kong were unlicensed.
Dual's license to export computers to Hillwood in Hong Kong was limited to twenty-five units. Smit concedes that he exported at least twenty-three units prior to the dates of his trips. An internal sales chart confirms the twenty-three sales. Smit argues that two units taken by the engineers on September 2, and October 17, 1983, were the remaining two units allowable under his license.
The jury, however, could have disbelieved Smit and concluded that Smit exported more units to Hong Kong than the twenty-five allowed under his license. First, the back of the license provides spaces for listing each unit exported under the license. The Regulations require the spaces to be filled out. 15 C.F.R. Sec. 386.2(d) (1). The spaces were left blank. Kent Greenough testified that Smit left the spaces blank so that the license would be "open" to shipping more than the amount allowed under the license. Trial Transcript 1418, 1422. Second, the internal sales chart did not reflect the exports which Smit claims were lawfully accomplished on September 2, 1983, and October 17, 1983. The jury could therefore have concluded that Smit knowingly failed to specify his exports to Hillwood in the license and sales chart and that the two exports involved here were over the limit imposed by the license.
B. The Computer Components (Counts Four, Six, and Eight)
Smit did not have a license to export computer components to Hillwood. Yet, Smit contends that his unlicensed exports of computer components would have been lawful under a general license, except for the fact that he unknowingly failed to fulfill one general requirement of all general licenses: the filing of a Shippers Export Declaration ("SED").
There was, however, evidence from which the jury could conclude that the component exports could not qualify under any of the general licenses, regardless of the absence of the SED. Exports under general licenses are prohibited if " [t]he exporter knows or has reason to believe that the commodity ... will be reexported from the country of the foreign purchaser and/or ultimate consignee, and such reexport has not been approved by the Office of Export Licensing." 15 C.F.R. 371.2(c) (5).
It is undisputed that the reexport of Dual replacement parts into the PRC was not authorized. Yet, there certainly was evidence that (1) the parts were left with Hillwood, and (2) Smit knew Hillwood might use those parts to service computers in the PRC. Smit wrote Chau a letter on October 14, 1983, ratifying that he had supplied Chau with components in the September trip and authorizing Chau to resell the components or use them to service computers previously sold. An "urgent" memo from Hillwood on October 17, 1983, asked Smit to personally bring components for Hillwood on his trip on that date. Dual engineers testified to observing eight Dual computers already functioning in the PRC, the presence of which was unexplained. A November 7, 1983, memo from Smit to his sales force advised that " [i]t is beginning to get crowded in the PRC. We have a number of distributors active, including ... Hillwood.... There are two major areas which have not placed orders. One is Sechuan province.... Hillwood is making attempts to work the Sechuan area more intensively." SER 34-36. Thus, there was evidence from which the jury could conclude that Smit had reason to believe the components would be unlawfully reexported to the PRC, and that Smit could not export Dual computers under a general license.
3. The 83/80 Export in November 1983 (Count Seven)
Dual was not licensed to export 83/80 models to Hillwood. Nevertheless, in November 1983 Francis Lau travelled to the United States and purchased an 83/80 from Dual to take to Hong Kong. Smit argues he was not aware of the sale. There was sufficient evidence to conclude otherwise. In a June 1983 memo, Hillwood expressed a desire to buy an 83/80, suggesting that the 83/80 be shipped under the license for 83/20 models. SER 66. Greenough testified that he discussed the problem of unlicensed sales of 83/80 models to Hillwood with Smit. Trial Transcript at 9:1350. Greenough also testified that Smit would decide under what license a particular sale fell. Id. at 9:1354. The jury could have concluded that the sale of an 83/80 to Hillwood could not have occurred without Smit's awareness and approval, considering the licensing problems involved.
For the same reasons expressed with reference to Count Two, the fact that Lau purchased the 83/80 in the United States did not relieve Smit from the responsibility of securing a license for its export.
4. The Attempted 83/80 Export in February 1984 (Count Fifteen)
Engineer Steve Weil, travelling to Hong Kong one day before Smit, decided at the last moment not to take an 83/80 along. Smit had no license to export 83/80 models to Hillwood. The Regulations prohibit any attempt to bring about a violation of any Regulation or provision of the EAA. 15 C.F.R. Sec. 387.3(a).
Smit argues that this export would have been lawful if accomplished because the unit was for demonstrational purposes and thus fell under a general license permitting temporary exports. See 15 C.F.R. Sec. 371.22. There was evidence from which the jury could conclude otherwise, however. On at least two previous trips the computers taken by engineers to Hong Kong and the PRC were never returned to the United States.
5. Conspiracy to Violate the Regulations (Count One)
Based on the evidence to support Smit's conviction under Counts Two to Eight and Fifteen, there was sufficient evidence from which the jury could conclude that Smit conspired with Paul Chau to violate the Regulations. At the very least, the November 1983 memo from Smit to his sales force suggests that Smit and Chau worked in tandem to reexport Dual computers to the PRC. See discussion at 2B, supra.
II. THE EXCULPATORY NO DOCTRINE (COUNT SEVENTEEN)
On February 29, 1984, customs agents seized boxes Smit had checked at the airline counter for his trip to Hong Kong. The boxes contained computer parts. When questioned by the agents as to his luggage, Smit made a variety of false statements regarding the existence of his luggage and its contents. Smit was convicted of making false statements to United States Customs Agents, in violation of 18 U.S.C. § 1001. Smit argues he is not liable under section 1001 because of the "exculpatory no" exception to liability under that section.
The application of the "exculpatory no" doctrine is a legal question reviewed de novo. United States v. Equihua-Juarez, 851 F.2d 1222, 1224 (9th Cir. 1988).
Section 1001 prohibits any person from knowingly making false statements to any department or agency of the United States. 18 U.S.C. § 1001. The statute was enacted to prevent false statements designed to cause monetary losses to the United States, and to prevent false statements from impairing the government agencies' ability to carry out their functions. United States v. Medina de Perez, 799 F.2d 540, 542 (9th Cir. 1986). The exculpatory no doctrine does not apply if the defendant fails to show any one of the following five requirements: (1) the false statement is unrelated to a claim to a privilege or a claim against the government; (2) the declarant is responding to inquiries initiated by a federal agency or department; (3) the false statement does not impair the basic functions entrusted by law to the agency; (4) the government's inquiries do not constitute a routine exercise of administrative responsibility; and (5) a truthful answer would have incriminated the declarant. United States v. Alzate-Restreppo, 890 F.2d 1061, 1066 (9th Cir. 1989).
Smit cannot show that his false statements were unrelated to a claim to a privilege. Smit's false statements were made in relation to the privilege of the exportation of goods.
Smit argues that the privilege is not involved in this case because the customs agents questioned him not for the purpose of determining the lawfulness of his exports but solely to obtain more information for Smit's criminal prosecution. This argument fails. The agents were acting on information provided by Dual's employees and knew Smit was carrying computer equipment, but they had not yet determined whether Smit's exports were unlicensed.
Smit challenges the validity of the Regulations under which he was convicted. When the EAA was enacted, section 2419 provided that the authority granted by the EAA ceased to be effective on September 30, 1983. Pub. L. No. 96-72, Sec. 20, 93 Stat. 535 (1979). On October 1, 1983, an amendment to section 2419 went into effect, changing September 30, 1983 to October 14, 1983. Pub. L. No. 98-108, Sec. 1, 97 Stat. 744 (1983). No law had been enacted by October 14, to extend the EAA. On that date the President declared a national economic emergency. Exec. Order No. 12444, 48 Fed.Reg. 48,215 (1983) ("the Order"), reprinted in 1983 U.S. Code Cong. & Adm.News B 80. The Order incorporated the EAA and ordered that its provisions continue in full force. Id. section 1. It also provided that the regulations issued under the EAA continue in full force. Id. section 2. The Order finally provided that it would remain in effect until terminated, and that it was the President's intention to terminate the Order upon enactment of a law reauthorizing the authorities conferred by the EAA. Id. section 4.
On December 5, 1983, Congress extended the EAA's authority until February 29, 1984. Pub. L. 98-207, 97 Stat. 1391 (1983).
Smit argues that the October 1, 1983, amendment to section 2419 is ineffective because the EAA expired the previous day, and therefore there was no statute left to amend. Smit's argument appears to require that for Congress to reenact the EAA, it would have to reenact the whole language of the EAA.
We reject Smit's contention as it is against the obvious intent of Congress. The EAA has lapsed several times, only to be reenacted by Congress by amendments extending the EAA's expiration dates, which amendments do not republish the whole text of the EAA. See, e.g., Pub. L. No. 92-284, 86 Stat. 133 (1972), reprinted in U.S.Code & Cong.Adm.News 161 (extending the expiration date of the EAA of 1969, as amended, to August 1, 1972) and Pub. L. No. 92-214, Sec. 106, 86 Stat. 644 (August 29, 1972), reprinted in U.S.Code & Cong.Adm.News 738, 741 (amending the EAA; lapse from August 1, 1972, to August 29, 1972, covered by Exec. Order No. 11677, Fed.Reg. 15483, extending the EAA's administration provisions).
It would subvert the intent of Congress to hold that each amendment to the EAA could not "revive" the EAA by reference, as Smit would have us hold. "The form of words is not material when Congress manifests its will that certain rules shall govern henceforth." United States v. Stafford, 260 U.S. 477, 480 (1923). "From the time that [a Supplemental Act incorporating a previously repealed statute] went into effect it had the same operation as if instead of saying that the laws referred to shall continue in force [,] it had enacted them in terms." Id. Our cases reflect the rule set by the Supreme Court in the specific case of the EAA. United States v. Spawr Optical Research, Inc., 685 F.2d 1076, 1080 (9th Cir. 1982), cert. denied, 461 U.S. 905 (1983) (June 22, 1977 amendments reenacted the EAA, which had expired on October 1, 1976). We conclude the October 1, 1983, amendment to 2419 reenacted the EAA by reflecting the unequivocal intent of Congress to do so.
Next, Smit argues the President's October 14, 1983, Order could not prevent the EAA from lapsing after October 14, 1983, and that therefore all the Regulations promulgated under the EAA are void.
We do not reach the issue of whether the President overstepped his constitutional sphere of action in extending the EAA. The President had the authority to maintain the Regulations Smit allegedly violated. See Section 203 of the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C.A. Sec. 1702(a) (1) (B) (1982) (granting the President the authority to "investigate, regulate, direct and compel, nullify, void, prevent or prohibit, any ... exportation of.... any property in which any country or a national thereof has any interest" (emphasis added)). See Spawr Optical, 685 F.2d at 1082 ("the President had the authority during the nine-month lapse in the EAA to maintain the regulations" under the Presidential power to regulate exports provided by the Trading with the Enemy Act).
Smit finally argues that the emergency declared by the President was not a "real emergency," and that therefore the President's Executive Order was without force and effect. We cannot second-guess the President's determination. The EAA provides no standards by which courts may evaluate whether a national emergency exists. The IEEPA clearly grants the President discretion to make that determination and only requires that the President inform Congress of his reasons. 50 U.S.C. § 1703(b) (1982).
The remaining issues raised by Smit in this appeal are without merit.