Industry News: V8N2


Lockheed Martin Receives $528 Million THAAD Missile-Defense Contract

The Missile Defense Agency awarded Lockheed Martin (NYSE:LMT) a $528 million contract in December 2015 for production and delivery of interceptors for the Terminal High Altitude Area Defense (THAAD) system. The new interceptors will support a growing number of U.S. Army THAAD units.

THAAD is a key element of the Ballistic Missile Defense System (BMDS), and is highly effective at protecting America’s military, allied forces, citizen population centers and critical infrastructure from short- to medium-range ballistic missile attacks.

“Our THAAD interceptors are on the cutting edge of missile defense technology. With advanced range, agility and accuracy, our interceptors are fully capable of defeating dangerous missile threats today and into the future,” said Richard McDaniel, Lockheed Martin’s vice president for the THAAD system.

Attempt to smuggle night vision to North Korea thwarted

A man from North Korea accused of trying to buy military-grade night vision goggles from a Utah-based undercover agent and illegally export them to China has pleaded guilty to a federal charge in an agreement with prosecutors.

Song Il Kim was arrested in Hawaii after agreeing to pay $22,000 for the equipment and packing it into boxes that he claimed were filled with used toys and towels so he could ship them to his Chinese business, charges state.

Kim, who is also known as Kim Song Il, was born in North Korea, holds a Cambodian passport and lives in China, court records show. Prosecutors say they believe the six pairs of goggles would have gotten to North Korea from there, though defense attorney Scott Williams disputes that allegation.

Under the terms of the plea deal, Kim is facing 40 months in prison at a sentencing hearing set for February.

He was arrested in Hawaii after a months-long investigation by a team of Homeland Security agents in Utah that started after an agent responded to an ad on a business-to-business website. It culminated in July with an in-person meeting with an undercover agent in a Waikiki hotel where Kim provided a $16,000 cash down payment, authorities said.

The agent and Kim packed three of the devices in a box and Kim filled out a customs form stating the box contained used toys and towels, according to court documents.

They took the box to a post office, where Kim paid the postage and handed the box to a mail clerk, the charges state. The package was intercepted by agents before it was shipped out, according to the U.S. Attorney’s Office for Utah.

It is federal policy to deny licenses and other approvals to export the items to certain countries: Belarus, Cuba, Iran, North Korea, Syria and Venezuela. The policy also applies to countries the United States maintains an arms embargo with, including Burma, China, Liberia and Sudan.

Approved DSP-5 export licenses no longer need to be lodged with U.S. Customs

Effective December 21, 2015, the U.S. State Department approved DSP-5 export licenses allowing the permanent export of defense articles no longer need to be lodged with U.S. Customs. The U.S. State Department has coordinated with the U.S. Census Bureau to upload the relevant data into the Automated Export System (AES),a and allowing U.S. Customs to access the required information via AES.

Lockheed Martin Hellfire missile ends up in… Cuba

A Hellfire missile manufactured by Lockheed Martin was lawfully exported from the United States to Spain for NATO exercises. Upon completion of the NATO exercise, the missile was packed for shipment back to Lockheed Martin’s Florida facility. Apparently, the freight forwarder in Madrid, Spain was supposed to put the missile on a truck for shipment to Frankfurt, where the missile would be shipped via air cargo to the United States.

Instead, the missile was placed on a truck to Paris, France and delivered to Air France. Air France took possession of the missile, and shipped the cargo to Havana, Cuba. Not surprisingly, the Cubans do not want to return the missile to Lockheed Martin. Thankfully, it appears that the missile was a training missile, without the operational seeker or fuze system used in the live missiles.

The U.S. State Department issued a statement that “…[i]f it turns out that the Hellfire was lost because of human error, the criminal probe would end and the State Department would have to determine whether to pursue a settlement with Lockheed Martin over the incident.” This statement is more than a little ridiculous, as it appears that Lockheed Martin did not commit the violation and was not aware of the violation until after the fact. Rather, the Spanish freight forwarder committed the violation by shipping the missile to Paris instead of Frankfurt. Nevertheless, under a theory of strict liability applied to exporters for export violations, Lockheed Martin may face a civil penalty for the export violation.