How well do you need to know your customers?
Most folks in any kind of business want to know their customers. But perhaps not as intimately as the government seems to expect that technology companies need to get to know their customers.
A Boulder, Colorado, aerospace company was among 18 U.S. businesses raided during the past month as part of a probe into arms shipments to Iran, including components for fighter jets, missiles and other weapons.
Federal authorities announced in early July the searches had been made, including one at Aerospace Technologies International Inc., an aircraft parts supplier.
Agents with the Bureau of Immigration and Customs Enforcement and Defense Criminal Investigative Service also served seven grand jury subpoenas on the firms, but no charges were immediately brought and no arrests were made.
The companies are suspected of violating the Arms Export Control Act by supplying prohibited military items to Multicore Ltd., a London-based company and suspected front that supplies the Iranian military, according to U.S. officials. The items include parts for Hawk missiles, F-14 Tomcat and F-4 Phantom fighters, C-130 Hercules transport planes and military radar.
Multicore, also known as AKS Industries, has been under U.S. and British investigation since February 1999.
In a prepared statement, Aerospace Technologies said Multicore approached it two years ago and placed an order — representing “a very small sale” — for three antennas. It was the only transaction with Multicore, the company said. Aerospace sold antennas to Multicore in August 2001 for nearly $26,000, according to court documents.
“We are deeply disturbed to learn from our government that this British company was working with Iran. We would never support or knowingly conduct business with anyone who is not a friend of the United States,” the statement says.
U.S. authorities this year have disrupted a number of illegal arms and technology transfers, including attempts to send howitzer, radar and unmanned aerial parts to Pakistan; assault weapons bound for Colombia; military aircraft and engines to Libya; and satellite technology to China.
That’s vital and great work, obviously. But let’s also take the novel approach of assuming that Aerospace is innocent in this case. It raises the question as to just how much a technology company — in this case an antenna company — is responsible for knowing about its customers before risking severe penalties, including sharing a cell with Bubba for its principals.
It is a bit like making Internet service providers responsible for policing the information that their users exchange. It is probably impossible and the disadvantages to innovation and business far outweigh the societal advantages.
To put it another way, even if your customer is – say – someone as famous and well liked as basketball star Kobe Bryant, you should probably get to know him before you accept an invitation to his hotel room.
It is well worth watching to see how some of these cases play out in court to make sure we end up with reasonable boundaries. Otherwise, you can expect to spend a lot of your resources trying to figure out which customers might sympathize with the Access of Evil.
