An excellent article that appeared today on the Bloomberg website indicates that Malaysia may be nudging the U.A.E. out of the position as top transhipment destination for items headed from the U.S. to Iran. According to that article, increasing crackdowns by the U.A.E. on exports to its neighbor across the Strait of Hormuz has caused Iran to increase its usage of middlemen and front companies in Malaysia to source equipment that Iran seeks to acquire from the United States.

One case in particular that is highlighted by the article involves the criminal prosecution of Majid Kavakand, an Iranian citizen who was provisionally arrested in France on March 6, 2009, where he is awaiting a determination by French courts on the United States’ request for extradition. The criminal complaint filed in the case provides interesting details on Kakavand’s modus operandi. Typically Kakavand would receive requests from Iran and then would use his company in Malaysia, Evertop Services, to solicit over the Internet small businesses in the U.S. to ship the items to Evertop, at which point the goods would be shipped to Iran.

Although the complaint doesn’t identify the U.S. companies in question, it provides enough detail (product model numbers, company addresses, etc.) that it was a simple matter for me to ascertain the identity of the companies. I won’t specifically name them here, but suffice it to say that each of the companies was a small business with a website that advertised the companies’ willingness to export items to overseas customers. In other words, they all were companies that Kakavand might suspect lacked the sophistication or motivation to make much inquiry into Kakavand’s purchase orders.

And, inf fact, not one of the companies involved in the charges filed against Kakavand appeared to perform any due diligence on Evertop or Mr. Kakavand other than to ask for confirmation that the end-user was Evertop in Malaysia. And none seemed to have been bothered by a substantial, no, gigantic red flag. In each case, Kakavand asked that the items be shipped to Evertop in care of “K” Line Logistics, it’s freight forwarder in Malaysia. If Evertop was the end user, why on earth would it want the goods sent to a freight forwarder in Malaysia? Needless to say, “K” Line Logistics appeared to have had instructions to ship the goods immediately upon receipt to Tehran.

Another interesting detail from the Kakavand case is that the prosecution made a large part of its case from emails sent by Kakavand from his Yahoo! mail account. Yahoo! coughed up all the emails after it was served a search warrant. Similarly, as Sharon Weinberger recently noted, the case made against Monsieur Monsieur was aided by a search warrant served by the government on Google to obtain emails sent by M. Monsieur through his gmail account. It’s hard to imagine why people busy trying to violate U.S. export laws would use a U.S.-based email provider, but there you have it. It’s not much different, I suppose, from a bank robber writing his demand note on the back of one of his own personal checks.

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