Archive for the ‘General’ Category


Oct

20

Did Ron Jeremy Save This Export Defendant From Jail?


Posted by at 6:31 pm on October 20, 2014
Category: General

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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Jul

23

Comment Notifications


Posted by at 12:26 am on July 23, 2014
Category: General

For some reason, there was a period of about a week during which I was not getting notifications of comments pending approval, so there were a number that I just discovered and approved. I am trying to figure out why that happened and fix it. In the meantime my apologies to commenters who were stranded in the moderation queue.

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Jun

23

Seeing Through the Smoked-Filled Rooms of Sanctions


Posted by at 6:37 pm on June 23, 2014
Category: Economic SanctionsGeneralOFACRussia SanctionsSanctionsSDN List

By Erifnam at en.wikipedia [GFDL (www.gnu.org/copyleft/fdl.html) or CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0/)], from Wikimedia Commons http://commons.wikimedia.org/wiki/File%3AK_Street_NW_at_19th_Street.jpg

The Canadian newspaper The Globe and Mail reported last week that lobbying records made public this month show the CEO and a lobbyist for Kinross Gold Corp., a Canadian gold mining company and one of the world’s largest, “have had numerous communications” with Prime Minister Stephen Harper’s foreign affairs policy adviser, Canada’s deputy minister of foreign affairs and the Canadian ambassador to Russia in order to discuss “policies and regulations related to the imposition of economic sanctions.”

With almost a third of Kinross’s global gold production reportedly coming from its two mines in Russia, Kinross has good reason to to try to find out, to the best extent possible, whether the Canadian government plans to impose sanctions relating to Russia that may affect Kinross business in that country.

Canadian sanctions against Russia, like U.S. and EU laws, involve prohibitions on dealings with targeted persons and give government authorities wide latitude to designate individuals and entities with essentially no public notice or consultation.  Under U.S. law, for example, OFAC can designate an SDN at any time without having to comply with public notice and review requirements imposed on almost all government agencies so long as the person meets the often broad criteria of a sanctions target under an executive order.

Moreover, OFAC deems any entity owned 50% or more by an SDN to be treated as an SDN itself.  As we previously reported, the so-called 50% rule has caused a variety of compliance conundrums relating to Russia as a few individuals, like Gennady Timchenko, Arkady Rotenberg and Boris Rotenberg, own major companies in many sectors of the Russian economy.  To boot, Kinross may have gotten understandably skittish when, south of the border, President Obama issued his latest Russian sanctions-related executive order in late March permitting imposition of sanctions on those operating in various sectors of the Russian economy, including metals and mining.  Under that criteria, Kinross itself might later be designated an SDN.

Sanctioning governments have, of course, reasons for their secrecy.  Intended targets can’t be announced prior to sanctions being imposed and, therefore, given a head start in transferring their property and money to safe haven countries.  But with little guidance and a lot at stake, Kinross has every reason to reach out to government officials to gain any clarity possible and do one’s best to make sure business can continue as usual or, if not, how to adjust its operations to comply with applicable laws.

Kinross is not alone.  U.S. federal lobbying records for this year’s first quarter are now publicly available.  For example, Coca-Cola, Xerox and Citgo are among the variety of companies that have reported lobbying efforts relating to sanctions against Russia.  Because sanctions against Russia weren’t imposed until the end of the first quarter in March, we expect to see disclosures in subsequent quarters from more companies involved in such efforts.

If there are smoke-filled rooms in economic sanctions, the smoke is mostly from government cigars (and maybe Cuban-origin for the Canadians).  The smoke arises where statutes, regulations and executive orders give government agencies dangerously broad discretion in identifying the sanctions targets and enforcing sanctions laws in ways that are not readily apparent from the laws themselves.

Future economic sanctions laws are not likely to be written any clearer.  Much of their effectiveness lies in not knowing who will be targeted and, as a result, the better chance there is that companies and individuals will police themselves in order to avoid possible violation.  In such an uncertain environment, finding people who can get as much information as possible from government officials enforcing sanctions will always be an invaluable resource.

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Apr

21

Oh, The Errors You’ll Make!


Posted by at 8:04 am on April 21, 2014
Category: General

By Thomas Erdbrink/The New York Time via http://www.nytimes.com/2014/04/18/world/middleeast/mystery-shrouds-american-plane-at-tehran-airport.html [Fair Use - Commentary on News Story Using Picture]Yesterday the New York Times followed up on its article about the mysterious U.S. plane seen on the runway of an airport in Tehran. According to the follow-up article, the plane was leased by the Bank of Utah by a Ghanaian mining company owned by a brother of Ghana’s president. Naturally, this story was an opportunity for the New York Times to quietly correct the mistake we pointed out in the first article but to go on and make yet another mistake about U.S. sanctions laws. All the news that fits to mess up could be the new slogan for the Times.

As we pointed out in our post on the first article, the Times mistakenly claimed that a license from the Department of Commerce was required for the plane to land in Iran. In the latest story, and without acknowledging the previous error, the Times gets this part right:

To travel to Iran, the aircraft would typically need a license from the Treasury Department’s Office of Foreign Assets Control, the primary enforcer of American sanctions against Iran.

(What do you want to bet they saw our post?)

Of course, fixing one mistake didn’t stop the Times from making a brand new, and even bigger, mistake:

While the Ghanaian company is not subject to the patchwork of sanction rules constricting trade between Iran and the United States, the Utah bank, based in Ogden, is bound by sanctions.

The Ghanaian company isn’t subject to U.S. sanctions? Really? Maybe Times reporters should, you know, pick up the phone and call a sanctions lawyer before opining incorrectly on the scope of U.S. sanctions against Iran. I mean, after all, that’s what that shiny little iPhone in your pocket is for.

Because the plane is classified as ECCN 9A991, it needs an OFAC license in order to be re-exported by a foreign person to Iran. That, after all, is the whole point of 31 C.F.R. § 560.205, which I’ll cite in full here for the benefit of the Times reporters who might not otherwise be able to find it on their own:

(a) Except as otherwise authorized pursuant to this part, and notwithstanding any contract entered into or any license or permit granted prior to May 7, 1995, the reexportation from a third country, directly or indirectly, by a person other than a United States person, of any goods, technology, or services that have been exported from the United States is prohibited, if:

(1) Undertaken with knowledge or reason to know that the reexportation is intended specifically for Iran or the Government of Iran; and

(2) The exportation of such goods, technology, or services from the United States to Iran was subject to export license application requirements under any United States regulations in effect on May 6, 1995, or thereafter is made subject to such requirements imposed independently of this part (see §560.414).

http://www.exportlawblog.com/wp-content/uploads/2014/04/IRAN-master675.jpg

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