Archive for the ‘Iran Sanctions’ Category



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 (], via Flickr [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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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 (], via Flickr 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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Houston CEO Indicted For Not Having an Export License That He Didn’t Need

Posted by at 7:23 pm on April 22, 2015
Category: BISCriminal PenaltiesIran SanctionsOFAC

Smart Power Systems and Bahram Mechanic via [Fair Use]Houston-based Smart Power Systems and its CEO Bahram Mechanic (as well as various other individuals) were indicted last week on charges that they exported certain export-controlled items to Iran without a license. The indictment alleges that certain uninterruptible power supplies, microcontrollers and digital signal processing chips, all allegedly classified as ECCNs 3A991,  were transshipped through third countries to a company in Tehran, allegedly controlled by Mechanic.

Not surprisingly, the indictment tries to make the case that these run-of-the-mill electronic items are critical military goods that Iran can use to launch missiles and build nuclear bombs. Of course, the government’s credibility in its assessment of the alleged capabilities of these items is rather diminished by its claim that these items are classified as ECCN 3A991, one of the least stringent export controls under the Export Administration Regulations. At best, however, the microcontrollers are 3A991.a, which covers microprocessors meeting certain computational benchmarks. The uninterruptible power supplies are not covered at all by 3A991 and are almost certainly EAR99.

Worse, for the government, if the uninterruptible power supplies are EAR99,  then the government’s theory of what laws were broken by their exports to Iran completely collapses. The indictment alleges that the defendants violated the International Emergency Economic Powers Act because no license was obtained from the Bureau of Industry and Security (“BIS”). Apparently, no one at the DOJ looked at EAR Section 746.7, which indicates that a BIS license is required only for certain items. EAR99 items are not among them.

Of course, a license from the Office of Foreign Assets Control (“OFAC”) is required to export EAR99 items from the United States to Iran. But the government is not alleging Mechanic and Smart Power needed an OFAC license; instead, it is saying they  didn’t have a BIS license even though they did not need that license. If the government can’t get the law it is enforcing right, it should not try to send people to jail for violating it.

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Thursday Grab Bag

Posted by at 8:05 am on April 16, 2015
Category: Crimea SanctionsCriminal PenaltiesCuba SanctionsIran SanctionsOFACSudanSyria

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

  • Last month we criticized the Department of Justice for conspiring with foreign luxury car makers to jail U.S. citizens who exported luxury cars to China to arbitrage the difference between U.S. and Chinese prices for these vehicles. Apparently, the DoJ now is having second thoughts about wasting taxpayer money and its resources on this nonsense. According to the  New York Times, settlements have recently been reached in nine states where prosecutors have agreed to return seized cars to, and drop charges against, luxury car exporters. Good.
  • On Monday we reported that Obama was going to drop Cuba from the list of state sponsors of terrorism, a move we thought was largely symbolic. Yesterday he did just that, and provided the 45-day notice required under the three acts that provide the basis for the list: § 6(j)(4)(A)(i)-(iii) of the Export Administration Act of 1979; § 40(f)(1)(A)(i)-(iii) of the Arms Export Control Act; and § 620A(c)(1)(A)-(C) of the Foreign Assistance Act of 1961. The linked New York Times article wrongly states that Congress can block this action with a joint resolution. Only the Arms Export Control Act provides for this blocking mechanism, and, as we noted, there’s no way that the White House will remove Cuba from the current arms embargo. So a joint resolution under the AECA would be, like the removal itself, largely symbolic
  • The Office of Foreign Assets Control (“OFAC”) revised its rules on Monday to amend the Syrian Sanctions Regulations to permit certain activities with respect to written publications, including the ability to pay advances and royalties, to substantively edit manuscripts and to create marketing campaigns. These activities have been permitted for Cuba, Sudan and Iran since 2004. Don’t try this yet in Crimea which remains, bizarrely and incomprehensibly, the most heavily sanctioned place on the face of the planet
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UMass Bans Iranian Students

Posted by at 7:34 pm on February 17, 2015
Category: Deemed ExportsIran Sanctions

UMass Amherst Student Union by Trace Meek [CC-BY-SA-2.0 (], via Flickr [cropped]


Why solve a problem with a scalpel when there is a sledgehammer nearby? That is the question that UMass Amherst administrators must have asked themselves when they decided to ban all Iranian students from their graduate-level science and engineering programs. The problem, of course, that had the administrators in a tizzy was the fear that the university might engage in deemed exports of export-controlled technology to those Iranian students.

It seems, however, that the UMass administrators perhaps need themselves a little education in export law. For starters, the Export Administration Regulations (“EAR”) make clear in section 734.9 that information “released by instruction in catalog courses and associated teaching laboratories of academic institutions” is not subject to the EAR and that, therefore, teaching this information to Iranians (or any other foreign student) is not a violation of the EAR.

Perhaps the administrators are afraid that school labs might have export-controlled equipment and that Iranians, if they have access to these machines, might be considered to have received export-controlled technology. That may be a legitimate concern, but it is not one that is restricted to Iranians. To solve this problem, UMass would have to boot all foreign students.

Nor is there any merit in the argument, apparently made by a “policy analyst” at a small DC firm cited in the linked article, that this result is mandated by section 501 of the Iran Threat Reduction and Syria Human Rights Act. That section prohibits the State Department from issuing visas to an Iranian to attend a U.S. university “to prepare … for a career in the energy sector of Iran or in nuclear science or nuclear engineering or a related field in Iran.” To begin with, this section imposes on obligation only on the State Department and not on any university in regard to its relation with a student once such a visa was granted. Nor does the prohibition extend to all fields in science and engineering, unless, somehow, a graduate degree in biology prepares one to work in the energy or nuclear field.

Beyond that, the University runs the risk of violating the anti-discrimination provisions of the Immigration and Nationality Act. Those provisions prohibit discrimination in employment against a legally-admitted foreign national based on his or her national origin. Since graduate students normally receive employment from their universities, a total ban on Iranian graduate students could very likely be seen as a violation of those prohibitions.

UPDATE: An email from the DC firm discussed in this post indicates that their policy analyst did not state in the interview cited in the linked article that section 501 of the Iran Threat Reduction and Syria Human Rights act mandated the position taken by UMass Amherst.  The email goes on to state that the law firm also believes, as I do, that the UMass Amherst policy is overbroad.

SECOND UPDATE:  Do you think maybe the folks at UMass Amherst read this post?  Probably not, but for whatever reason they’ve already reversed their policy banning Iranian graduate students in science and engineering.


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