Archive for the ‘Iran Sanctions’ Category


Jul

27

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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Jul

15

Iran Deal Leaves Many Sanctions Still in Place


Posted by at 12:33 am on July 15, 2015
Category: Iran Sanctions

Imam Khomeini by Kaymar Adl [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://www.flickr.com/photos/kamshots/515002010/ [cropped]After the deal with Iran was announced today, a colleague asked me whether I’d have any work left to do. At that point, I had not yet read the Joint Comprehensive Plan of Action (“JCPOA”). Now that I have, it seems clear that if you were hoping that the JCPOA would reduce legal compliance costs, you are going to be disappointed.

One key point to realize is that Executive Order 13059, which was signed by President Clinton in 1997 and which banned the exportation of all goods and services to Iran, stays in place. The ban on imports, first adopted in Executive Order 12613, also is not going anywhere. What the JCPOA does is carve out various sectors that will be exempted from this ban, including the energy and petrochemical sector, the shipping, shipbuilding and port sector; gold and other precious metals, raw and semi-finished metals, the automotive sector, and aircraft and parts. In addition, what appears to be most Iranian SDNs, including individuals, companies, ships and aircrafts, will be removed from the SDN List.

None of this is going to happen immediately, of course. To begin with, lifting these sanctions depends on endorsement of the JCPOA by the U.N. Security Council. Additionally, the IAEA will need to verify that Iran has taken the agreed steps with respect to its nuclear program and the U.N. will have to terminate the various Security Council Resolutions relating to Iran, including the arms embargo, subject to their reimposition if Iran does not keep its commitments with respect to its nuclear program.

How long will it take before the sanctions are lifted? It’s hard to say. There is an initial 90-day delay between the endorsement of the JCPOA by the parties involved and the United Nations Security Council and the first steps towards implementing the obligations under the JCPOA. After that, the IAEA needs to verify Iran’s compliance, and there is no way to tell how long that will take. And, of course, OFAC has to adopt new rules which, of course, if history is any guide, might take quite some time.

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Jul

3

The Perils of Travel, or Welcome to Batam


Posted by at 10:31 am on July 3, 2015
Category: Crimea SanctionsExtraditionIran Sanctions

User:Abelard Fuah, via Wikimedia https://en.wikipedia.org/wiki/File:Batam_City_Mix.jpg#/media/File:Batam_City_Mix.jpg licensed under CC BY-SA-3.0 [http://creativecommons.org/licenses/by-sa/3.0/][cropped]Ling Yong Nam, a Singaporean national under indictment in the United States, will be extradited to the United States after a ruling by a court in Batam, Indonesia. Lim is accused of having arranged the shipment of radio modules from the United States to Iran.

Interestingly, Lim could have avoided extradition if he just had stayed home. In 2011, Singapore had refused Lim’s extradition relying on the dual criminality provision in the extradition treaty between the United States and Singapore, which requires that the conduct serving as the basis for extradition be a criminal offense both in Singapore and the United States. Since the unlicensed shipment of radio modules to Iran was not illegal under the law of Singapore, the dual criminality test was not met, and the extradition request was denied.

Fast forward to October 2014. Lim hopped a ferry from Singapore to Batam to attend a trade show. He was nabbed as he stepped off the ferry and has been sitting in jail in Batam ever since.

The United States has no extradition treaty with Indonesia, so the judge issuing the extradition order engaged in some creative legal reasoning to reach his decision:

The judge said he had taken into consideration the two countries’ good relations and America’s help in returning two Indonesian criminals to Indonesia.

“As a result of this, we will grant the extradition request and detain Lim Yong Nam till this extradition process is carried out,” said Judge Cahyono on behalf of the three-judge panel.

He might as well have added that he once visited Disneyland and enjoyed it immensely.

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Jun

9

OFAC Announces Travel Ban to Iran


Posted by at 3:22 pm on June 9, 2015
Category: Iran SanctionsOFAC

Imam Khomeini by Kaymar Adl [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://www.flickr.com/photos/kamshots/515002010/ [cropped]Okay, yes, the headline is clickbait, but it’s also not too far from the truth. (Unlike typical clickbait — such as “Four Foods You Eat That Are Poisonous: Number 4 Will Really Surprise You” or “Twelve Really Famous Movie Stars With Really Bad Teeth” — which is largely untrue.) The basis for this (slightly) sensationalized headline is something an official from the Office of Foreign Assets Control (“OFAC”) said yesterday at the meeting here in DC of the Association of University Export Control Officers.

During a Q&A period, an audience member posed three scenarios and asked which ones, if any, would require an OFAC license. Scenario 1: a faculty member goes to Tehran to attend an open conference and presents a paper in collaboration with Iranian professors that is intended to be published. Scenario 2: a faculty member goes to Tehran to attend the same open conference and reads an already published paper and answers no questions from the audience. Scenario 3: a faculty member goes to Tehran to attend the conference and does nothing but listen.

Easy, said the OFAC representative. (And the answer will really surprise you.) “All three require a license. Merely attending the conference is the provision of a service in Iran.”

By that logic, of course, all travel to Iran is banned. If you go to Iran to see your relatives, you’re providing a service in Iran to your relatives. If you go to Iran to write a story on contemporary Iranian youth, you’re providing a service to contemporary youth in Iran. If you go to Iran to ski, you’re providing a service to Iranian ski resorts. If you go as a tourist and give a fellow tourist directions, you’re providing a service in Iran to your fellow tourist.

Okay, I’m being somewhat unfair. Not all travel is banned to Iran. If you are a penniless, uneducated vagrant unable to speak, hear or otherwise communicate, you can go to Iran without a license. Bon voyage.

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May

12

Federal Court Strikes Down Warrantless Border Search in Iran Export Case


Posted by at 11:23 pm on May 12, 2015
Category: Criminal PenaltiesIran Sanctions

Los Angeles International Airport by Daniel Betts [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://www.flickr.com/photos/redlegsfan21/13789084574A federal district court judge in the District of Columbia last week granted a motion to suppress evidence obtained by a DHS Special Agent after a laptop was seized from a departing passenger at LAX and subsequently subjected to a comprehensive forensic search. Prosecutors attempted to defend the search as a routine border search which could be conducted without reasonable suspicion of any kind and without any warrant. The court held that the search was impermissible both because the government had no reasonable suspicion of “ongoing or imminent” criminal behavior and because the search was an extensive forensic search conducted away from the border after the passenger had long departed the country.

In the case at issue, the DHS had some evidence that the defendant, five years prior to the search, had shipped items to China knowing that they were going to be transshipped to Iran. When the investigating special agent learned that the defendant had traveled to the United States, the agent decided to have CBP seize the defendant’s laptop at LAX when he departed the country. The laptop was then shipped to San Diego where the hard drive was imaged. Specialized software was then used to search the contents of the hard drive. More than 20,000 files and a large number of emails were retrieved which, after review by the special agent, provided evidence of the Iran exports that occurred five years earlier. The special agent then applied for, and obtained, a search warrant seeking authority to seize those emails and documents which then served as a basis for the prosecution before the federal district court in the District of Columbia.

The Court’s decision that the search was unreasonable relied on a number of factors. First, the court noted that suspicion of prior criminal activity was not a reasonable suspicion that could support a warrantless search at the border. Such a search could only be justified on the basis of a suspicion of imminent or ongoing criminal activity, not past criminal activity, and there was no reason for the agent to suspect ongoing or imminent criminal activity. Instead he was just fishing for evidence of past criminal activity.

Second, the court distinguished the type of search that occurred from a routine border search that could be justified by reasonable suspicion of ongoing or imminent criminal activity. The court noted that the actual search occurred long after the passenger had departed and at hundreds of miles from the border where the laptop was seized. Additionally, it was a search of unlimited scope and unlimited duration. This, the court felt, was far different from opening and examining a passengers luggage or briefcase at the border for a search prior to departure.

The court also seemed troubled by misrepresentations made by the DHS Special Agent when he did finally apply for a warrant to seize the documents obtained from the defendant’s hard drive. The affidavit in support of the application for a warrant represented to the court that the warrant was needed to enable a search of the “mind-boggling” amount of data on the hard drive and that the extraction of the data “may take weeks or months.” In fact, this was all a charade (to use a polite term); all of the extraction had already occurred and no further searches of the hard drive were thereafter conducted by the DHS special agent or the government.

Although the court did not directly focus on this, another factor seems dispositive here. Warrantless searches are normally justified by some exigency for the search which makes it difficult to obtain a warrant in advance. In a typical border search, the luggage or briefcase being examined is about to leave the country and seeking a warrant before that departure would be impractical. Here, however, the government had the luxury of all the time in the world to image the hard drive and examine its contents. There is no possible reason as to why it was impractical to get a warrant before extracting the data and rifling through its contents.

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