Archive for the ‘BIS’ Category



New Cuba Rules Admit the Embargo Threatened the Safety of Civil Aviation

Posted by at 8:54 pm on September 22, 2015
Category: BISCuba SanctionsOFAC

A Cubana Ilyushin Il-96-300 at Domodedovo International Airport by Dmitriy Pichugin [GNU Free Documentation License, Version 1.2 ], via [cropped]

This blog has noted before that comprehensive embargoes by the United States that cover civil aircraft parts flaunt the Convention on International Civil Aviation to which the United States is a party inasmuch as they endanger the lives of people in the air and on the ground in countries not subject to the embargo.  The new Cuba rules proposed by the Bureau of Industry and Security (found here) and by the Office of Foreign Assets Control (found here) begin to correct this problem, at least as far as the Cuba embargo and BIS are concerned.

Articles 4 and 44 of the Convention make clear that member states are not to compromise the safety of civil aviation  as an instrument of national policy against other countries or to take actions in pursuing national goals that would endanger civil aviation in other member states. Use of an embargo to withhold essential parts for civilian aircraft clearly conflicts with these principles and with the United States’ obligation under the Convention.

The proposed amendments forthrightly admit that the U.S. embargo endangers civil aviation by now adding section 746.2(b)(6) which, as now amended, states:

License applications for exports or re-exports of items to ensure safety in civil aviation, including the safe operation of commercial passenger aircraft will be considered on a case-by-case basis.

Not only does this admit that the embargo had a deleterious effect on flight safety, but it leaves open the possibility that the U.S. could continue to endanger flight safety on a “case-by-case basis.” One has to wonder why there would ever be a question with respect to “items to ensure safety in civil aviation.”

Of course, OFAC is up to its neck as well in this problem, because it also regulates exports and re-exports to Cuba. The general license in section 515.533* for exports of items licensed by BIS only covers items exported from the United States or items re-exported from the United States with 100% U.S. content. In the case of items with less than 100% U.S. content re-exported from outside the U.S., an OFAC license will be required (which will be in addition to a BIS license if the item is subject to the EAR, i.e., has 25% or more U.S. content.)

The new OFAC rules, however, do not contain an explicit statement of the licensing policy for Cuba. And unlike the case with Iran, where OFAC published a licensing policy for exports “to ensure the safe operation of Iranian commercial passenger aircraft,” there is no such published policy with respect to Cuban commercial passenger aircraft, although OFAC may informally be applying that policy. So, at least with respect to re-exports of goods with less than 100% U.S. content, OFAC appears to be free to continue to violate the Convention to the detriment of international civil aviation, although whether it will do so remains to be seen.

*Because the Internet is hard, OFAC has, apparently by mistake, removed the complete text of the Cuba regulations from its site and now links instead only the text of the public notice announcing the new amendments.

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Friday Grab Bag

Posted by at 5:32 pm on September 18, 2015
Category: BISCuba SanctionsOFAC

Grab BagHere are a few recent developments that you may have missed:

  • Adam Szubin, former OFAC head, threatens to re-impose sanctions on Iranian banks in confirmation hearings on his nomination as Treasury Department Under Secretary for Terrorism and Financial Intelligence.
  • DC  tabloid Washington Examiner suggests that BIS is about to realize more rules lifting parts of the Cuba embargo; quotes DC attorney and embargo cheerleader who predicts end of the world as we know it if that happens. UPDATE: New BIS regulations are here and new OFAC regulations are here. They will be effective when published on Monday (9/21/2015). World to end on following day.
  • Sony’s deal to distribute Cuban music is premised, naturally, on the informational materials exception, and has been in the works for two years with OFAC granting travel licenses for Sony executives to go to Cuba to negotiate the deal.
  • Foreign Policy magazine’s blog is all worked up about military applications of mind-reading machines and possible proliferation of this “dual use” technology. Next week, the folks at Foreign Policy blog are going to urge that warp speed space ships be added to the USML.
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Skateboarding on Thin Concrete

Posted by at 9:02 pm on August 25, 2015
Category: BISCuba SanctionsOFAC

Santa Monica Skateboarder by Clif BurnsAn article in today’s Washington Post may be attracting some attention over in the halls and cubicles of the Office of Foreign Assets Control (“OFAC”).  It describes in some detail how Miles Jackson, a local DC man and skateboarding enthusiast, appears to have been skating around the U.S. embargo on Cuba to deliver skateboards to Cuba and to spend time with his skateboarding buds in Havana.

Apparently the skateboarder became interested in Cuban skateboarding while studying abroad in Cuba during college.  So far, so good; nothing wrong with that.

The dicey stuff starts after he returns to the United States and wants to keep up with his skateboarding buddies in Cuba and send them real skateboards, notwithstanding the travel and export bans for Cuba.

Jackson and [a friend] Bradley began traveling to Cuba that September to drop a few boards off. Because direct travel from the United States was limited, their first trips went through Toronto, Bradley said.

That sentence probably should be re-written to remove the word “limited” — “Because direct travel from the United States was illegal, their first trips went through Toronto.” Of course, direct travel would be legal with a license, but then you wouldn’t go through Canada. Of course, maybe Jackson did get an OFAC license to go skateboarding in Cuba and decided to take the long route through Toronto.

On top of that, Jackson started exporting skateboards to Cuba:

Jackson … regularly travels with up to 50 skateboards at a time. He and his friends, through their nonprofit organization Cuba Skate, have ferried more than 200 skateboards in the past five years to aspiring skaters in the island country.

Of course, that would be okay if licensed, but there is no indication that such licenses were obtained. Another possibility would be export pursuant to BIS License Exception GFT. But that covers parcels addressed to an individual containing quantities normally given as gifts; it does not cover carrying 50 skateboards to Cuba through Canada if that is what happened.

Now Jackson wants to fix up the skateboard parks in Havana. He and some friends

plan to travel again to Havana in September, when they hope to start an ambitious renovation of the country’s only official skatepark, El Patinodromo, on the outskirts of the city. During the rainy season, the park floods, and the metal ramps and rails have begun to rust.

With the embargoes relaxed, Jackson hopes to replace the aging ramps and rails over five to eight weeks, pending permission from the State Department.

The State Department? Really?? Apparently the editors at the Washington Post (like their colleagues at the Wall Street Journal) must also be on vacation.

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Don’t Believe Everything You Read in the Newspaper

Posted by at 11:32 am on July 27, 2015
Category: BISCriminal PenaltiesIran Sanctions

Republian Herald HQ via Google Maps [Fair Use]

From the Republican Herald (Pottsvile, PA) story on a guilty plea by Falcon Instrumentation and Machinery FZE in connection with an attempted shipment by Pennsylvania-based Hetran, Inc. of a bar peeling machine to Iran:

Federal prosecutors allege the machine, valued at more than $800,000 and weighing more than 50,000 pounds, has both military and civilian uses, which meant Hetran could not ship it to Iran without obtaining a license from the U.S. government. The machine is used in the production of high-grade steel, which is used in making automobiles and aircraft parts, according to prosecutors.

As astute readers of this blog will no doubt already know, U.S. companies like Hetran can’t ship anything at all (including EAR99 items) to Iran without a license or an applicable exception. But before we jump down the throat of a poor reporter in Pottsville, let’s think about what likely happened. In doing that, realize first that local reporters like DOJ press releases more than cats love catnip. Just rewrite it a little and push send and the day’s work is done.

And, indeed, as suspected there is a DoJ press release and it says this:

Under U.S. law and regulations, American companies are forbidden to ship “dual use” items (items with civilian as well as military or proliferation applications), such as the peeler, to Iran without first obtaining a license from the U.S. Government.

Sigh. I realize the export law and economic sanctions are a somewhat complicated area of law, but it does not seem unreasonable to suggest that the government employees who are charged with sending people to jail for export violations at least make an effort to understand the laws that they enforce.

[Note: I’m on vacation this week, so this is the last post for this week; normal posting resumes next week.]

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BIS Amends EAR to Remove Cuba as a State Sponsor of Terrorism

Posted by at 3:59 am on July 23, 2015
Category: BISCuba Sanctions

Cuba Capitole by y.becart(Own work) [CC-BY-SA-2.0 (], via Flickr[cropped]On Wednesday, the Bureau of Industry and Security amended the EAR to reflect the removal of Cuba from the list of state sponsors of terrorism. Somewhat surprisingly, the impact of this removal is much less than might be imagined.

Of most importance, even though Cuba is no longer on the list of State Sponsors of Terrorism, all items exported to Cuba will still either need a license or an applicable license exception. The biggest change is that, by removing Cuba from the E:1 country group, a few license exceptions relating to countries in that group will no longer apply.

First, certain aircraft (principally private civil aircraft not operating under certain FAA carrier certificates) will be able to use License Exception AVS for temporary sojourns to Cuba. Second, certain encryption items that were excluded from being taken by travelers to Cuba in their luggage will now be covered by License Exception BAG. Third, License Exception RPL can now be used to export replacement parts to Cuba for explosive detection equipment and concealed object detectors lawfully exported to Cuba.

If the change in RPL causes you to raise your eyebrows — explosive detection equipment and concealed object detectors in Cuba?! — settle down and take a deep breath. This is just CCL-ese for the stuff they use in airports to screen you and your luggage before you get on the plane. Nobody wants the real terrorists to target planes flying from Cuba, particularly now that they will have more Americans on them.

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