Oct

31

Happy Halloween!


Posted by at 7:54 am on October 31, 2014
Category: General

ITAR Pumpkin by Kevin Wolf

Another regulatory carve-out by Kevin Wolf. . .

Kevin tells me that he considered carving an EAR pumpkin, but it would have been too complex and, in any event, not spooky enough once it was understood.

(Photograph by Kevin Wolf; used with permission)

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Oct

30

Designation by OFAC Can Be Dangerous to Your Health


Posted by at 8:18 pm on October 30, 2014
Category: Cuba SanctionsOFAC

Bupa booth via http://www.bupa.com/media/704558/bupa-corp-brochure_hires_singles.pdf [Fair Use]Global health care consortium Bupa agreed to cough up (sorry!) $128,704 to the Office of Foreign Assets Control to settle allegations that it provided health insurance to individuals on the SDN List and, in one instance, re-imbursed a policy holder for medical treatment received in Cuba. You might have assumed that there were limits to the injury that OFAC might try to inflict on SDNs or non-SDNs traveling in Cuba but you would, apparently, be wrong.

The SDN involved was designated under the Foreign Narcotics Kingpin sanctions. Unlike the Narcotics Trafficking Sanctions Regulations, the Kingpin Sanctions regulations do not provide an exception even for emergency medical services. (Of course, even though emergency medical services can be provided to SDNs under the Narcotics Trafficking Sanctions, the hospital or doctor cannot be paid for those services without an OFAC license authorizing such payment. Good luck getting treated in those circumstances.)

So the penalties for being a Narcotics Kingpen  extend far beyond simply having your bank account blocked and, potentially, can include dying from lack of needed medical care. I have no special sympathy for narcotics kingpens, but this seems a little harsh.

Trying to interfere with the health care of people traveling Cuba seems even harsher. Moreover, penalizing the reimbursement of a non-Cuban outside Cuba for services previously provided in Cuba seems not to further the U.S. policy of depriving Cuba of resources given that the payment in Cuba was already made. It also illustrates the strained reading that OFAC gives to the Cuban Assets Control Regulations in its effort to penalize anything and everything that has any connection with Cuba.

The fundamental prohibition of the Cuba sanctions prohibits U.S. persons from participating in “transactions [that] involve property in which … [a Cuban] national … has at any time … [or] had any interest of any nature whatsoever, direct or indirect.” Of course, no Cuban national has an interest in the insurance policy under which the reimbursement payment was made. The only such property in that case would have been the funds paid by the policy holder to the Cuban health care provider. To say that the reimbursement transaction “involves” that property obviously stretches the meaning of “involves” to the breaking point, but it shows how broadly OFAC reads these regulations to assure that if you blow your nose and someone in Cuba hears the noise, you’ve violated the rules.

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Oct

28

U.S. Indicts Exporter for Failing to Meet Halal Meat Standards


Posted by at 7:59 pm on October 28, 2014
Category: Agricultural ExportsCriminal Penalties

Midamar Halal Pizza via http://www.midamarhalal.com/Product/Pizza/Halal-Pizza/166/Halal-Beef-Pepperoni-Pizza-12in-bake-Rise.aspx [Fair Use]Who knew that the Islamic Religious Police had an office at Main Justice? You might justifiably wonder that reading this indictment in which an Iowa man, William B. Aossey Jr., is accused of violating federal law by exporting non-Halal meat to Indonesia and Malaysia, both Muslim countries where the importation of non-Halal meat is forbidden by law. Aossey is the owner of Midamar Corporation, a leading producer and exporter of Halal meat and food products.

Actually, the prosecutors get to this odd result by a familiar route, namely accusing the defendant of making false statements to the federal government in connection with the export. We saw this in the warm chicken case which we reported on back in 2012. In order to encourage U.S. exports, the U.S. Department of Agriculture agrees to certify to foreign governments that agricultural products exported from the United States comply with the importing country’s requirements. As part of that process, the exporter fills out a USDA Food Safety Inspection Service Form 9060-6, which is an application for the required export certificate. In that application, just above the signature line, is the following sentence:

Under penalty of law, I certify that the product covered by this application for export meets the inspection requirements for the country of destination.

If the importing country requires that the animal be slaughtered by a Muslim in a particular manner while invoking the name of the deity and that has not happened, then the statement on the Form 9060-6 is false and a violation of 21 U.S.C. § 611(b)(5), which prohibits false statements in applications for export certificates. Violation of that provision is made criminal by 21 U.S.C. § 676.  The indictment alleges that the defendant’s company represented in the export certificate that the meat came from a Halal-certified slaughterhouse when in fact it came from another, non-Halal slaughterhouse.

It is not quite clear why the charge was under 21 U.S.C.  § 611(b)(5), which provides for a maximum jail term of three years, rather than under 18 U.S.C. § 1001, which penalizes false statements to federal agencies and provides for a maximum jail term of five years. Perhaps it was because the defendant was recently appointed by the U.S. Secretary of Commerce to the position of Vice Chair of the Iowa District Export Council, a fact oddly omitted from the indictment. I suppose that’s worth cutting the guy just a little slack.

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Oct

20

Did Ron Jeremy Save This Export Defendant From Jail?


Posted by at 6:31 pm on October 20, 2014
Category: BISCriminal PenaltiesIran Sanctions

Touraj Ghavidel and Ron Jeremy via Ghavidel's Twitter Feed https://twitter.com/MrTouraj [Fair Use]
ABOVE: Touraj Ghavidel and Ron
Jeremy


The Bureau of Industry and Security just released settlement documents resolving allegations that Borna Faizy, Touraj Ghavidel and Signal Microsystems, Inc., illegally exported computer equipment from the United States to Iran. According to the BIS charges, Faizy, Ghavidel and Signal Microsystems transshipped the items through Dubai (where else?), used coded language in emails with Iranian customers to hide their customer’s identities and locations, and falsely stated on their Electronic Export Information filings that the ultimate end users were in Dubai. As a result, over at least 2 years, more than $1 million in computer equipment was shipped by the three to Iran. Under the settlement agreement, no fine is being imposed; rather the three exporters have agreed to a ten-year denial order.

The settlement agreement comes on the heels of a plea agreement entered by Faizy and Ghavidel where they plead to making false statements to federal agents in violation of 18 U.S.C. § 1001. Under the plea, the government and the defendants agree that a fine and one year probation would be an adequate sentence. The basis for the charge under 18 U.S.C. § 1001 is that Faizy and Ghavidel, when questioned by federal investigators, swore up and down that they were absolutely not doing any business with Iran and would never ever even think of doing so, cross their hearts and hope to, etc., etc.

It is hard to tell why such a favorable plea deal was reached here. The false EEIs and the coded emails certainly suggest that the defendants knew that they were breaking the law. And they also managed to ship a boat load, almost literally, of computers to Iran. All I can figure is that the prosecutors saw the picture of Ghavidel with Ron Jeremy, which Ghavidel put on his own Twitter feed, and decided that Ghavidel was too cool to go to jail.

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Oct

16

New York Times Futilely Calls for End to Cuba Embargo


Posted by at 9:52 pm on October 16, 2014
Category: General

Cuba Capitole by y.becart(Own work) [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://www.flickr.com/photos/yoh_59/13697566663Earlier this week the New York Times editorial board called for the end of the fifty-three-year-old embargo on Cuba. There is, of course, nothing unfamiliar or new about the arguments forwarded by the Times for the end of the embargo. The Board noted that Castro used the embargo as an excuse for his own regime’s shortcomings, that the embargo was ineffective in ending the Castro regime, and that it has caused needless suffering among ordinary Cubans.

Of course the chance that Congress will take any action to end the Cuban embargo is about the same as the chance that Castro will shave his beard and join the cast of Dancing with the Stars, and the opinion of the Times editorial board is unlikely to change these odds. The Times acknowledges that Congressional action would be necessary but suggests that the White House could still take some actions.

But there is much more the White House could do on its own. For instance, it could lift caps on remittances, allow Americans to finance private Cuban businesses and expand opportunities for travel to the island.

Section 204 of the Helms-Burton act purports to put restrictions on the President’s ability to end the embargo on Cuba. But that does not prevent amelioration or change of the scope of the embargo as long as the White House does not abrogate specific legislative restrictions such as the prohibition on investments in telecommunications, the prohibition on investments in confiscated property, or limits on vessels that have visited Cuban ports. Even so, it is far from clear that this or any subsequent White House is or will be willing to take the political hit involved in any major modifications of the embargo.

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