Jun

22

Stupid Quote of the Day


Posted by Clif Burns at 2:00 pm on June 22, 2012
Category: BISIran SanctionsOFAC

Red Penalty CardAhem. Here is what Nahal Iravani-Sami, president of the Iranian American Bar Association, has to say about whether retail clerks at Apple Store should sell items to customers even if it is disclosed they plan on illegally exporting those items to sanctioned countries:

“The responsibility for enforcement should fall on border patrol, law enforcement, the U.S. post office, customs — government agencies.” As it is, the law “promotes dishonesty and invites profiling. When you come down to it, it’s absurd.”

So, folks, it’s time to take that portion on red flags out of your export compliance program. Just let Customs worry about it. After all, that’s their job, not yours.

What’s even more amazing is that Ms. Irvani-Sami is a prosecutor. I wonder if she would say the same thing about selling a weapon to somebody who said he was going to use it to rob a bank? Make the sale! Don’t worry about stopping the bank robbery. That, after all, is what the police are for.

I’m quoted with Ms. Irvani-Sami in the above-linked article at MSNBC on shopping while Iranian at Apple. As you can see from what I said there, I am certainly aware of the conflicting interests involved and the need to balance export enforcement with human rights laws and local anti-discrimination provisions. Even so, just saying “leave it to Customs,” as Ms. Irvani-Sami does, is remarkably foolish.

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6 Comments:


Well stated… obviously, while the associates at the apple store in GA may be a bit misguided, Ms. Irvani-Sami as a prosecutor does not appear to possess sufficient understanding of US Export Laws or of OFAC regulations to claim that “…enforcement should fall on border patrol, law enforcement, the U.S. post office, customs — government agencies…”.

Keep up the good work!

Shaun Hassett, CAMS
Financial Examinations and Evaluations, Inc.

Comment by SHAUN HASSETT, CAMS on June 24th, 2012 @ 10:37 am

Counselor Irvani-Sami is by no means alone. When you get beyond the Beltway a lot of folks feel that way. In fact, one of the greatest obstacles to convincing management or new clients that they need a comliance program is the perception that because Customs has permitted their widgets and gadgets to be exported without licenses before, that a license is not really required. In the case of Iran, the perception that controls don’t apply to individuals for ordinary consumer prodcts is perhap unintentionally enhanced by the lack of travel restrictions to and from Iran and that Iranians can get student visas.

Perhaps OFAC should expand the exception for information to include consumer IT.

Comment by Hillbilly on June 25th, 2012 @ 8:07 am

I was a little concerned with the quote in the article attributed to State:

“There is absolutely no U.S. policy or law that would prohibit Apple or any other company from selling its products in the United States to anyone intending to use the product in the United States, including Iranians and Persian-speakers,” said Pooja Jhunjhunwala, a spokesperson for the U.S. State Department.

Can we take this as evidence of a change in policy from State regarding delivery of controlled items to foreign persons in the US? Hey, a girl can dream…

On a serious note, did State consult OFAC before making that statement because I’m pretty sure OFAC would have a different view on whether or not such a policy or law exists. I know State doesn’t like the term “deemed export,” but they implement basically the same rule for USML items (they just call it a straight export), so this statement is vastly oversimplified and seriously misleading to the casual reader (i.e. they aren’t helping those of us in the trade to get our message across in our organizations!).

Comment by Xena Export Warrior Princess on June 28th, 2012 @ 11:31 am

    I was equally troubled by that quotation. If true, they would have to release Dr. Roth from jail given that his conviction was premised on letting an Iranian grad student in the U.S. use a USML item in his labs. I have never heard of the spokesman to whom that gem was attributed. Perhaps the reporter mangled what he said or, perhaps, he actually didn’t know what he was talking about and actually said it.

    Comment by Clif Burns on June 28th, 2012 @ 1:01 pm

The upshot with regard to Pooja Jhunjhunwala’s statement is that, as far as I’m aware, Apple does not sell defense articles. And, most certainly, iPads or iPhones and the like are certainly not defense articles. And most other similar IT firms are also not into developing defense articles. Therefore, since the EAR itself does not prohibit transfers of items within the US to foreign nationals (unless there is knowledge that the item will be taken outside the US), then Ms. Jhunjhunwala’s statement makes sense from that perspective. And the statement is also consistent with US sanctions with Iran. (I won’t quote the language, but you can find the summary here http://www.treasury.gov/resource-center/sanctions/Programs/Documents/iran.pdf.)

Imagine if the language in both were similar to that of the ITAR. If so, then, theoretically, every single sale to every single person would need to be checked to see if the individuals were citizens of embargoed countries etc. And this, quite frankly, would run afoul of other laws preventing not just discrimination based on national origin etc., and would be more invasive than Arizona’s mainly overturned immigration law. And it would put a halt to commerce in general.

Lastly, “deemed exports” deal with technology as opposed to commodities. Since we are dealing with commodities instead of technology, deemed exports really don’t belong in the conversation – and we really need to let the two regs remain that way until / unless export reform somehow combines them into one.

Comment by C. Brown on June 28th, 2012 @ 7:38 pm

    C. Brown: I’m afraid you’re wrong. Transfer of an item may well be a transfer of technology under the EAR just as it can be under the ITAR. This is even leaving aside the issue of the manuals that come with the item, since the EAR says that technology can be transferred by “visual inspection.” The reason that this is not normally a problem is because the visual inspection doesn’t provide technology relating to the “production,” “development” or “use” of the item. That would be (and was) a different story when “use” technology was defined in such a way that it information on the operation of the item alone was “use” technology. Now “use” technology requires that information on how to install, maintain, repair and refurbish the item is also transferred, something that will not normally occur simply through visual inspection.

    Comment by Clif Burns on June 29th, 2012 @ 12:13 am