Archive for the ‘Sanctions’ Category



OFAC Filches Professor’s Good Name

Posted by Clif Burns at 8:17 pm on February 12, 2014
Category: OFACSanctionsSDN List

Sources: and [Fair Use]Stephen Law is a distinguished scholar, a philosopher and a senior lecturer at Heythrop College, University of London. Steven Law, on the other hand, is a Burmese man, also known as Tun Myint Naing, who helps to run his father’s drug trafficking empire as Managing Director of Asia World Co., Ltd. Guess which one of these men is on the Office of Foreign Assets Control’s List of Specially Designated Nationals and Blocked Persons? Guess which one on these men pays the price for this and is unable to conduct basic business transactions? If you guessed Steven and Stephen, respectively, then you were right.

Professor Stephen Law recounted his travails at the hands of OFAC in this recent blog post.

I have discovered that, as a result of this listing, US Customs block shipments of goods to me here in the UK. Also when people try to wire me money from abroad (not just from the US, but from anywhere), for e.g. occasional travel expenses for academic conference attendance, the payment is interrupted and various checks are made before the funds are released. This became so bad during one period (a series of payments every single one of which triggered a block) that I had to switch to a different bank account. At no point was I told why this was happening (i.e. that you, OFAC, are responsible). The banks concerned believe they must keep this information from me (I was told this by my bank branch). Hence it took me many months to figure out what the source of the problem was: OFAC/US Treasury.

Long-time readers will know that we’ve been highlighting for quite some time the injustice caused to innocent people by OFAC designations of similarly named individuals. Back in 2007, we described in one post cases of people who had mortgages and car loans denied, PayPal accounts closed, and basic consumer transactions refused because they had a name similar, in whole or in part, to someone else on the SDN list.

The irony, then and now, is that kingpin Steven Law, the narcotics trafficker, has a right to seek removal from the SDN List but that, according to OFAC, a non-designated individual, such as Professor Stephen Law, has no right to request any relief from OFAC, whether it be a clearance letter or the inclusion on some kind of white list. OFAC officials have said that the reason for not providing such documentation is that the person involved might later need to be designated, a foolish and unconvincing rationale at best.

Of course, there is a recent development that suggests that OFAC’s rule might not be so hard and fast with respect to collateral victims of OFAC designations. In June 2011, OFAC designated Tidewater Middle East Co., which is the company in charge of managing seven of Iran’s ports and which was accused by OFAC of facilitating Iran’s export and imports of arms and materiel. Oddly, however, the announcement designating Tidewater went out of its way to say this:

There is no relationship between today’s target, Tidewater Middle East Co., and Tidewater (US), an international shipping company headquartered in the United States, listed on the New York Stock Exchange as TDW.

It seems to me that OFAC’s special concession to a similarly named U.S. company erodes its already risible reason for not providing some assistance to collateral victims of the designation process and that if the innocent Stephen Law demanded that OFAC distinguish him from the other Steven Law, OFAC would find it harder to tell him to change his name if he didn’t like being treated like an SDN. This is not to say it wouldn’t do so, just that it would be even more shameless than it used to be and that such a position would possibly be more vulnerable now to challenge by litigation.

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OFAC Likely Meets Tough Sell on Iran Sanctions Road Show to the Middle East

Posted by George Murphy at 6:14 pm on January 29, 2014
Category: Economic SanctionsIran SanctionsOFACSanctions

By Jean-Pierre Bazard Jpbazard (Own work) [GFDL ( or CC-BY-SA-3.0-2.5-2.0-1.0 (], via Wikimedia Commons

The Treasury Department announced on Monday that Under Secretary David Cohen is traveling to Turkey and the UAE this week to discuss the implementation of the U.S. sanctions relief under the Iranian nuclear pact.  As important as the trip itself, the message to be delivered, according to the Treasury Department, will include a focus on “the limited and temporary sanctions relief provided under the [pact] and continued enforcement of existing international economic sanctions against Iran.”

Both Turkey and the UAE are critical to Iran’s foreign trade.  Turkey is Iran’s third-largest export and import partner, and Iran imports more from the UAE than anywhere else, accounting for approximately a third of Iran’s total imports.  Almost six years ago, we reported on Iran’s reliance on trade with the UAE and, respectively, the UAE’s apparent complicity to trade with Iran in ways that would be in violation of U.S. law.  In fact, Sheikh Mohammed Bin Rashid al-Maktoum, crown prince of Dubai and prime minister of the UAE, told the BBC earlier this month, that international sanctions against Iran should be lifted.  He added that “Iran is our neighbor and we don’t want any problem” and, if international sanctions are lifted, “everybody will benefit.”  Not exactly on point with U.S. sanctions policy.

As the Treasury Department appropriately describes, the U.S. sanctions relief under the nuclear pact is “limited” and is rather more of a U.S. pledge that sanctions will not be imposed against non-U.S. persons engaging in certain activities vis-à-vis Iran.  The emphasis to Turkey and the UAE, therefore, must be that U.S. sanctions are, in effect, at status quo in order to stem off any impression in the Middle East that U.S. sanctions against Iran are softening.

The challenge remains as it always has been: getting Turkish, UAE and other Middle Eastern buy-in to U.S. sanctions policy against Iran.  While Under Secretary Cohen may present some carrots on his trip, the stick to wield was announced along with his trip in highlighting “continued enforcement of existing international sanctions.”  The message, of course, would be that U.S. sanctions enforcement of Iran-related activities taking place in Turkey and the UAE will be bad for business in both countries.

Our advice to exporters remains the same as it was almost six years ago: know your customers especially well in Turkey and the UAE to ensure as best as possible that your business does not involve dealings with Iran.

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Name That Country!

Posted by Clif Burns at 6:31 pm on December 18, 2013
Category: BISDoJSanctionsSyria

Dell HQ [Fair Use]The Securities and Exchange Commission just released on Monday, according to this article, correspondence that it had with Dell regarding an on-going  investigation by Dell, the DOJ, and the Bureau of Industry and Security (“BIS”) regarding sales of Dell computers to Syria.  These sales were made by a Dell distributor based in the U.A.E. In that correspondence, Dell indicated that it was conducting an internal investigation with outside counsel into sales by one of its Dubai-based distributors, was regularly communicating with the U.S. Attorney regarding that investigation, and had responded to a BIS subpoena requesting information about the sales in question. The company said that the investigation was not yet complete so that the company could not yet respond to the SEC’s questions as to whether Dell had any liability under U.S. export and sanctions law arising from the distributor’s sales to Syria.

The company, however, did try to suggest that it might not be liable because of a clause it cited in its distribution agreement:

Distributor acknowledges that Products licensed or sold hereunder or in respect of which services (including Dell Branded Services) are provided, which may include software, technical data and technology, are subject to the export control laws and regulations of the USA, the European Union, the Territory in which Distributor operates and the territory from which they were supplied, and that Distributor will abide by such laws and regulations. Distributor confirms that it will not export, re-export or trans-ship the Products, directly or indirectly, … to … any countries that are subject to the USA’s or those other relevant territories’ export restrictions or any national thereof … .

To paraphrase someone else, I guess you go to war with the language you have — that is to say, this language is hardly ideal. It relies on the distributor to know what countries are subject to U.S. export restrictions. Do you really think that a distributor in the U.A.E. is aware of the details of U.S. sanctions programs or even which countries are on the current U.S. bad country list? Probably not.

I certainly do not mean to imply that Dell has criminal or civil liability because of this drafting issue. Rather, my point only is that companies should be explicit in these clauses about which countries are subject to sanctions and to affirmatively advise distributors in writing when those countries change. Don’t count on your distributor to know who the U.S. has sanctioned anymore than you would count on him to know the name of last year’s winner of American Idol.

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What Happens in Panama Stays in Panama (including 200,000 bags of brown sugar)

Posted by George Murphy at 7:08 pm on November 19, 2013
Category: Cuba SanctionsEconomic SanctionsNorth Korea SanctionsSanctionsU.N. Sanctions

By jonprc (Flickr: north korean ship) [CC-BY-2.0 (], via Wikimedia Commons

We reported last July on Panama’s seizure of the North Korean vessel Chong Chon Gang sailing from Cuba to North Korea and carrying, among other things, disassembled Soviet-era MIG jets and missiles hidden in 200,000 bags of brown sugar. Cuba claimed it was sending these items to North Korea “for repair.” As was reported at the time, the North Korean crew tried to fend off Panamanian boarders with sticks while the vessel’s captain initially claimed to have a heart attack and subsequently attempted suicide.  The entire ordeal resulted in the rare Cuba-Panama-North Korea diplomatic tiff.  While we explained in July the UN sanctions against North Korea that were implicated, recent developments also provide telling aspects of U.S. sanctions policy against Cuba.

The United States has remained notably close-lipped and little has developed in almost four months since the seizure until this last week.  On Wednesday, the Panamanian foreign minister was in Washington and was thanked by Secretary Kerry for Panama’s “very important interdiction of a North Korean ship with illicit cargo.”  According to Panamanian media, the Panamanian foreign minister announced on Friday that Panama has granted visas to a North Korean delegation to come to Panama this week to claim the Chong Chon Gang and most of its crew.   The captain, two senior officers, the disassembled weaponry and the brown sugar will not be released.  Finally, Vice President Biden arrived yesterday in Panama to tour expansion sites of the Canal.

The upshot of the entire incident is that the United States got the best promotion of sanctions against Cuba it could have asked for.  Panama was the one who exposed Cuba engaging in concealed international arms trafficking with North Korea.  The United States, as a result, was not thrust into a position to defend an embargo unsupported by most of  its allies, but rather could let Cuba be scolded by another Latin American country.

The United States, of course, most likely played critical behind-the-scenes intelligence and direction related to the seizure, and the recent diplomatic visits between the two countries are reminders that Panama relies heavily on U.S. support and, therefore, would be willing to comply with the occasional Soviet-era arms seizure at the behest of the United States.  Perhaps not coincidentally, the North Korean crew have been detained at Fort Sherman, a former U.S. military base on the Atlantic side of the Canal.

While Iran takes current front page news on U.S. sanctions policy, the activities onboard the Chong Chon Gang is a singular example of why the United States is not inclined to ease sanctions meaningfully against Cuba soon and will use this episode as support that sanctions should remain as is.

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Iran’s Newest Diplomacy Tool with the West: PowerPoint

Posted by George Murphy at 11:51 pm on October 22, 2013
Category: Economic SanctionsIran SanctionsSanctions

By Max Talbot-Minkin (Flickr: Iran's Ambassador to the UN) [CC-BY-2.0 (], via Wikimedia Commons
ABOVE: Mohammad Javad Zarif

According to press reports last week, Iranian Foreign Minister Mohammad Javad Zarif used a Microsoft PowerPoint presentation last week in Geneva to explain to U.S. and EU diplomats what Iran may do to address their concerns with Iran’s nuclear activities. Putting aside the permissibility under U.S. law of how Mr. Zarif obtained PowerPoint, the bigger story is that Iran’s amicable overtures may be working. The New York Times reported on Friday that the Obama Administration is considering a plan that would unfreeze some portion of blocked Iranian assets in exchange for Iranian government commitments with respect to its nuclear program.

While even such a proposed plan is significant given U.S. foreign relations with Iran over the past few decades, there may be some obstacles to loosening sanctions on Iran. Members of Congress quickly responded to news of the Geneva talks with proposals for tighter sanctions on Iran

The United States is not, however, the only one on Iran’s dance card. How the EU responds, for example, to actions by a new Iranian government is a critical component to how effective U.S. sanctions are. Although some U.S. politicians would like to believe Iran’s current pains from sanctions are felt exclusively because of increased U.S. sanctions, the success of sanctions is not properly evaluated without considering the increase of other sanctions, principally those of the EU and Switzerland, within the last few years.

Using PowerPoint should not be underestimated as a calculated gesture by Iran even if it may have required a U.S. export license. Gestures are important aspects of diplomacy and can lead to significant developments in foreign relations. Just ask Reagan and Gorbachev about their walk along Lake Geneva almost thirty years ago. Congress and the Obama Administration need to find some common ground before talks with Iran resume in Geneva next month in order for the United States to take part in meaningful discussions. If not, the United States may not be part of any lakeside strolls, which can be especially cold when alone in Geneva this time of year.

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