2022-18504. Bureau of Political-Military Affairs; Administrative Debarment Under the International Traffic in Arms Regulations Involving Ryan Adams, Marc Baier, and Daniel Gericke

ACTION:

Notice.

SUMMARY:

Notice is hereby given that the Department of State has imposed administrative debarment under the International Traffic in Arms Regulations (ITAR) on Ryan Adams, Marc Baier, and Daniel Gericke.

DATES:

Debarment imposed as of August 29, 2022.

FOR FURTHER INFORMATION CONTACT:

Jae E. Shin, Director, Office of Defense Trade Controls Compliance, Bureau of Political-Military Affairs, Department of State [phone].

SUPPLEMENTARY INFORMATION:

Section 127.7(c)(2) of the ITAR authorizes the Assistant Secretary of State for Political-Military Affairs to debar any person who has been found pursuant to part 128 of the ITAR to have committed a violation of the Arms Export Control Act (AECA) or when such violation is of such character as to provide a reasonable basis for the Directorate of Defense Trade Controls to believe that the violator cannot be relied upon to comply with the AECA or ITAR in the future. Such debarment prohibits the subject from participating directly or indirectly in the export of defense articles or defense services for which a license or other approval is required by the ITAR.

Debarred persons are generally ineligible to participate in activity regulated under the ITAR (see, e.g., § 120.1(c) and (d), § 126.7, § 127.1(c), and § 127.11(a)). The Department of State will not consider applications for licenses or requests for approvals that involve any debarred person.

Between January 2016 and November 2019, Ryan Adams, Marc Baier, and Daniel Gericke (“Respondents”) were employed by DarkMatter Group (DarkMatter), a privately held technology and cyber services company headquartered and organized in the United Arab Emirates (UAE) that furnished cyber services to the UAE government. Prior to working at DarkMatter, a foreign corporation registered in the UAE, Respondents were employed by CyberPoint International LLC (CyberPoint) a U.S.-based company that furnished cyber services to the UAE government pursuant to ITAR licenses or other approvals, including technical assistance agreements. CyberPoint and DarkMatter were competitors, and in late 2015 and early 2016, the UAE government transitioned its contracts for cyber services from CyberPoint to DarkMatter. During this time period, DarkMatter hired certain U.S.-person former managers of CyberPoint, including Respondents.

Respondents possessed computer network exploitation (CNE) expertise that included the development, maintenance, deployment, and operation of software and hardware designed to obtain unauthorized access to electronic devices and accounts. Respondents used their CNE expertise to provide and support CNE services to persons and entities in the UAE and the UAE government on behalf of DarkMatter.

Among their other activities, Respondents created certain zero-click computer hacking and intelligence gathering systems that Respondents specially designed, developed, maintained, and operated to allow its users access to tens of millions of devices for the UAE government's intelligence purposes. The services Respondents performed in connection with the relevant systems constituted furnishing defense services under U.S. Munitions List (USML) Category XI(d) because: (a) the relevant systems were electronic systems, equipment, or software that were specially designed for intelligence purposes that collect, survey, monitor, exploit, analyze, or produce information from the electromagnetic spectrum as described in USML Category XI(b); and (b) Respondents assisted foreign persons in the use, design, development, engineering, production, modification, testing, maintenance, processing, or operation of the relevant systems. Respondents did not have a license or other approval to furnish such ITAR-controlled defense services.

As a result of these violations, on July 7, 2022 (Adams and Baier) and August 5, 2022 (Gericke), the Department of State and Respondents entered into Consent Agreements that administratively debarred Respondents until July 7, 2025 and August 5, 2025, respectively, and pursuant to order of the Assistant Secretary for Political-Military Affairs they are administratively debarred. Reinstatement after July 7, 2025 and August 5, 2025 is not automatic but contingent on full compliance with the terms of the July 7, 2022 and August 5, 2022, Consent Agreements and evidence that the underlying problems that gave rise to the violations have been corrected. At the end of the debarment period, Respondents may apply for reinstatement. Until licensing privileges are reinstated, Respondents will remain administratively debarred.

This notice is provided to make the public aware that the persons listed above are prohibited from participating directly or indirectly in any brokering activities and in any export from or temporary import into the United States of defense articles, related technical data, or defense services in all situations covered by the ITAR.

Exceptions may be made to this denial policy on a case-by-case basis at the discretion of the Directorate of Defense Trade Controls. However, such an exception would be granted only after a full review of all circumstances, paying particular attention to the following factors: whether an exception is warranted by overriding U.S. foreign policy or national security interests; whether an exception would further law enforcement concerns that are consistent with foreign policy or national security interests of the United States; or whether other compelling circumstances exist that are consistent with the foreign policy or national security interests of the United States, and law enforcement concerns.

This notice involves a foreign affairs function of the United States encompassed within the meaning of the military and foreign affairs exclusion of the Administrative Procedure Act. Because the exercise of this foreign affairs function is highly discretionary, it is excluded from review under the Administrative Procedure Act.

Kevin E. Bryant,

Acting Director, Office of Directives Management, Department of State.