In FBI146;sgunsight

Sudarshan and Gopal have been arrested on charges of procuring electronic items from vendors based in the United States and exporting them to three Indian institutions without obtaining the necessary licences from the relevant US offices.

The institutions in the dock

8226;Vikram Sarabhai Space Centre VSSC in Thiruvananthapuram comes under the Department of Space and is one of the centres functioning under the Indian Space Research Organisation ISRO. Cirrus Electronics is accused of supplying them with four different kinds of Static Random Access Memory SRAM computer chips and five types of capacitors between May 2003 and April 2006.

8226; Bharat Dynamics Limited BDL in Hyderabad is a public-sector enterprise under the Ministry of Defence. It was established in 1970 for production of guided missiles and related defence equipment. It was allegedly supplied with capacitors, semi-conductors, rectifiers and resistors between September 2005 and April 2006.

8226; Aeronautical Defence Establishment ADE is a laboratory of the Defence Research and Development Organisation DRDO in Bangalore entrusted with developing the Tejas Light Combat Aircraft. It is said to have received i960 Intel micro-processors from Cirrus Electronics between February 2004 and October 2005.

The alleged violations

The US Department of Commerce maintains a list called the Entities List of institutions worldwide that are engaged in nuclear or missile development activities. Both VSSC and BDL are on that list. Export of certain electronic items to such institutions is regulated through the issue of licences. The items supplied to VSSC and BDL were those that required licences.

Similarly, export of certain defence articles and services in the US is governed by the Arms Export Control Act and the International Traffic in Arms Regulations Act. Export of items like those supplied to ADE requires a licence from the Directorate of Defence Trade Controls DDTC of the US State Department.

Apparently, Cirrus Electronics did not obtain the licences from any of the concerned departments before supplying the electronic items for its Indian customers. It also gave false statements to the vendors, concealing from them the actual destination of the items being procured.

The charges

8226; That the officials of Cirrus Electronics 8220;knowingly combined, conspired, confederated, and agreed with each other8221; to violate the US laws by exporting critical electronic components to Indian institutions without obtaining a licence.

8226; That the objective of the conspiracy was to make money for Cirrus and its owners and employees and to avoid the prohibitions and licensing requirement of US laws.

8226; That Sudarshan and Sampath Sundar provided false information to vendors, concealing that the products they were procuring were intended for institutions on the Entities List.

8226; That they aided and abetted unlawful export and caused the vendors to engage in illegal activities.

What American authorities say

8226; Cirrus Electronics obtained orders from the Indian institutions to procure certain electronic items from US vendors.

8226; It placed orders for these items with US vendors without revealing the end-user.

8226; In case the vendor asked for the end-user certificate, false certificates were furnished. For example, in response to an e-mail from a vendor in Phoenix, Arizona, requesting an end-use statement for SRAMs, Sampath Sundar, in May 2003, apparently did not reveal that the items were intended for VSSC. Instead, he is said to have falsely identified the end-user as the Naval Physical and Oceanographic Laboratory NOPL in Kochi, a DRDO laboratory. In his mail, Sampath is said to have written that the NOPL would use the SRAMs 8220;for the development of electronic hardware for oceanographic instrument measuring the ocean parameters8221; for its own purposes.

8226; NOPL8217;s name has been invoked repeatedly to get orders for VSSC.

8226; When in September 2004, one of the vendors discovered that NOPL end-user statements were fraudulent and threatened to report the matter to the Department of Commerce, this is what Sudarshan is supposed to have written to his colleagues Gopal and Prasad, according to the chargesheet filed before the Grand Jury: 8220;8230;do not get panic. At the end of the game, it is I8230;who need to face the music. MG Mythili: You are not the owner of Cirrus LLC; Members will not be affected8230;Besides, I am moving over to USA to take control on such crisis. Hence, do not fear about anything. It is all business games and come what may be the results8230;Detach ourselves from the results8230;We concentrate on actions only8230;8221;

In that mail, Sudarshan also sought to dismiss any fears of punitive action against their company, saying, 8220;It is a veiled threat of the vendor to report the matter to the Department of Commerce. There are 1,000 such companies and 100,000 complaints.8221;

8226; In the case of procuring semi-conductors for BDL, Sudarshan is said to have provided a 8220;Statement of Assurance8221; to a vendor in Hauppage, New York, in which he apparently wrote: 8220;We acknowledge that the products or technical data to be purchased from the vendor include or may include products which are subject to export control laws and regulations of the United States.8221;

8220;We hereby certify that all sale, transfer, consignment, loan or donation of products and/or technology acquired from the vendor made directly or indirectly outside the United States are made in full compliance with all applicable export laws and regulations.8221;

8226; The shipments were sent to the Singapore office of Cirrus Electronics from where they were re-exported to the original clients. Alternatively, the items were procured at the US office in Simpsonville, South Carolina, where they were repackaged before being sent to the Indian institutions.

Could Indian institutions be involved?

It is highly unlikely that the three Indian institutions would knowingly allow such illegality to take place. There are clear-cut and strict guidelines to be followed while importing such electronic parts. But precisely because of this reason, it also seems difficult to understand how the institutions would not get a wind of the kind of activities that Cirrus Electronics was allegedly involved in.

8226; To import any sensitive item from the United States, the institutions need to fill up an elaborate form detailing where and for what purpose the item is going to be used and also giving an undertaking that the items would not be re-exported or put to any other use.

8226; The institutions generally know what items require licences and ask the suppliers to have the necessary paperwork done.

8226; More damning is the alleged involvement of two government officials in ensuring the procurement of i960 Intel micro-processors for ADE. One of them, based in the US, is said to have accompanied Sudarshan on a visit to the vendor in February 2004 and signed the 8216;Inspection and Acceptance Certificate8217; on behalf of the Indian government after testing the micro-processors. Sudarshan is also said to have taken the other official, apparently an employee of ADE, for the testing of another batch of microprocessors in September 2005.

8226; In the mail that Sudarshan had written to his colleagues following the threat of one of the vendors to report the company to the Department of Commerce, he apparently had also asked his CEO of India operations, Prasad, to 8220;go to VSSC and explain them that our intention is not to make profit on this order but to service VSSC8221;. He is said to have further instructed him to 8220;ascertain if VSSC has got some clout over NPOL8230; we need not indulge full details to them.8221;

8226; Sudarshan is also said to have written in that mail that 8220;we should meet NPOL and explain them so that we do not dent our business with them also8230;8221;

Since the government and the related departments haven8217;t commented on the issue yet, the truth is still clouded in allegations.