Archive for the ‘Sudan’ Category


Nov

29

Why It’s Called The Hill Rag


Posted by at 8:46 pm on November 29, 2016
Category: OFACSudan

The Hill Front Page via https://www.facebook.com/TheHill/photos/a.445406209086.230191.7533944086/10150235234964087/?type=1&theater [Fair Use]

The Washington political gossip sheet officially called The Hill, but more commonly known as “The Hill Rag,” wanders into the world of OFAC regulations and, no big surprise, gets it wrong.   The occasion for the Hill Rag’s regulatory blunder is a blurb on the representation by a DC firm of the government of Sudan in federal court litigation

[The firm] is working for the Republic of the Sudan on “several litigation matters pending before [U.S.] federal courts.” … Because of U.S. sanctions on Sudan, [the firm] must obtain a license from the Treasury Department’s Office of Foreign Assets Control (OFAC) to work on the contract. OFAC approves some activities that would be otherwise prohibited by sanctions, including legal services.

Er, no. Section 538.505 of the Sudanese Sanctions Regulations provides that law firms may provide legal services without a specific license to the Government of Sudan when “made a party to domestic U.S. legal, arbitration, or administrative proceedings.” It also covers suits where Sudan is the plaintiff and which are filed to protect property interests subject to U.S. jurisdiction. These two provisions cover just about any federal court law suit involving Sudan.

The only thing that requires a specific license in these two instances is the receipt of fees by the law firm for the services provided. But licenses are not required, as The Hill says, for all legal services.

I guess the Hill Rag reporters could not find anybody in DC who could talk to them about OFAC or show them how to use The Google.

Permalink Comments (0)

Bookmark and Share


Copyright © 2016 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Apr

7

Save the Fokkers


Posted by at 11:40 pm on April 7, 2016
Category: Burma SanctionsCriminal PenaltiesEconomic SanctionsGeneralIran SanctionsSudan

Fokker Services Building in Hoofddorp via http://www.fokker.com/sites/default/files/styles/carousel_innovations/public/media/Images/Services/Contact_Fokker_Services_Location_Hoofddorp_637x286.jpg?itok=NYP0cc2k [Fair Use]

The United States Court of Appeals for the District of Columbia Circuit just reversed the decision of a lower federal district court which tossed out the deferred prosecution agreement between the Department of Justice and Fokker Services B.V.  Fokker had admitted, in a voluntary disclosure to the Office of Foreign Assets Control (“OFAC”), that  it had obtained U.S. origin aircraft parts which it then re-exported to Iran, Sudan and Burma without the required licenses. This blog has previously criticized both the highly unusual decision of the DoJ to turn a voluntary disclosure to OFAC into a criminal prosecution and the district court’s decision to toss aside the DPA as too lenient, apparently in the belief that Iran was somehow involved in the 9/11 terrorist attacks.

The Court of Appeals decision, which restores the DPA and reverses the lower court, is based simply on its interpretation of the Speedy Trial Act. Because a DPA starts the Speedy Trial Act’s seventy-day clock running, the Act provides, in 18 U.S.C. § 3161(h)(2), that a DPA can turn off this clock “with the approval of the court.” Otherwise, of course, the defendant could escape prosecution after seventy days, despite provisions of the DPA that prosecution would be avoided only upon good behavior by the defendant during a longer period, typically one to three years.

The Court of Appeals held that this requirement of approval did not give the district court the authority to question the leniency of the DPA, the charges brought by the government or the parties prosecuted under those charges. Rather the court reviewing a DPA is limited to determining if the DPA is

geared to enabling the defendant to demonstrate compliance with the law, and is not instead a pretext intended merely to evade the Speedy Trial Act’s time constraint.

The only other authority of the lower court, according to the Court of Appeals, would be to reject “illegal or unethical provisions” of the DPA, noting that the District Court had not argued that anything in the DPA was either illegal or unethical.

The Court of Appeals opinion is, thus, good news and bad news. The bad news is that a court can’t refuse to approve a DPA on the grounds that it was unfair for the government to turn a voluntary disclosure to an administrative agency into a criminal prosecution. The good news is that if the exporter does agree to a DPA, it can have a high degree of certainty that the district court cannot condition approval of the DPA on the insertion of more onerous provisions.

Photo Credit: Fokker Services Building in Hoofddorp via Fokker http://bit.ly/23bmktC [Fair Use] [cropped]

Permalink Comments Off on Save the Fokkers

Bookmark and Share


Copyright © 2016 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Feb

4

Don’t Just Stand There Doing Nothing, People Will Think You’re a Supervisor!


Posted by at 9:46 pm on February 4, 2016
Category: OFACSudan

Meroe (49) by joepyrek [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://https://flic.kr/p/dD4ue9 [cropped]The Office of Foreign Assets Control (“OFAC”) announced today that it had issued a “notice of violation” (but no fine) to Johnson and Johnson (Middle East), Inc. (“JJME”), a New Jersey Corporation, in connection with five shipments by Johnson and Johnson (Egypt) S.A.E. (“JJE”) to Sudan in violation of the Sudanese Sanctions Regulations. No description was given of the shipped goods other than that they were worth $227,818.

Not surprisingly, the violation involved “facilitation” by JJME of the shipments by JJE to Sudan in violation of section 538.206 of the Sudanese Sanctions Regulations. OFAC did not detail how JJME facilitated the shipments other than by saying that it did so by “coordinating and supervising” those shipments. It’s hard to discern exactly what is meant by “coordinating” a shipment and perhaps some things that might be called “coordination” might also be facilitation.

But the use of the word “supervising” is a bit odd. The Sudanese Sanctions Regulations, in section 538.407, provide the only clarification in all of OFAC’s regulations of the meaning of the slippery term “facilitation.” That section says:

Activity of a purely clerical or reporting nature that does not further trade or financial transactions with Sudan or the Government of Sudan is not considered prohibited facilitation. For example, reporting on the results of a subsidiary’s trade with Sudan is not prohibited, while financing or insuring that trade or warranting the quality of goods sold by a subsidiary to the Government of Sudan constitutes prohibited facilitation.

Supervising the shipments could simply be keeping track of the shipments and perhaps reporting their progress, and that would fall clearly on the side of reporting the trade with Sudan, which is not facilitation according to this definition. Who among us has not been “supervised” by someone sitting on a sofa while we perform some task? And how did that ever “facilitate” that task?

It’s no secret that OFAC has consciously tried to leave the scope of facilitation vague in order to have exporters over-regulate themselves out of fear of transgression and the attendant punishment. By suggesting that supervising is somehow facilitating it contributes to this regulatory ambiguity. If OFAC truly wanted to provide guidance on what it means by facilitation, it would would have described exactly what JJME did with respect to the shipments rather than fall back on vague terms that might not really even describe facilitation as anyone understands it.

Permalink Comments (1)

Bookmark and Share


Copyright © 2016 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Nov

24

Egyptair Shot Down by BIS for Sudan Airways Lease


Posted by at 9:58 pm on November 24, 2015
Category: Sudan

Tasty Meal on Sudan Air via http://www.sudanair.com/uploads/photos/97226DSC00043.JPG [Fair Use]
ABOVE: A Tasty Meal on
Sudan Air


Today the Bureau of Industry and Security (“BIS”) announced that Egyptair has agreed to pay a penalty of $140,000 to settle charges that Egyptair leased two Boeing 737-566 commercial aircraft to Sudan Airways.  The penalty is payable in four equal installments every three months starting on February 1, 2016. The Settlement Agreement further provides that should Egyptair not make any of these payments in a timely fashion, BIS can enter a one-year export denial order. Since such an order, which would forbid any U.S. person to export any item to the airline, would be a one-year kiss of death, it seems likely that Egyptair will make each $35,000 payment in a timely fashion.

It was hardly a secret that Egyptair had leased these aircraft to Sudan Airways. BIS hardly had to use its secret decoder rings and shoe phones to uncover the deal. It was publicly reported in various aviation databases such as this one here. The highly public nature of the transaction also suggests that Egyptair thought the lease was permissible and simply was unaware of the meglomaniacal position of BIS and the U.S. government that the U.S. has jurisdiction over anyone anywhere in the world who touches any item that was ever in the United States.

One more thing: Sudan Airways is on the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control, so it should not be too long before OFAC chimes in and gets more cash from Egyptair for leasing these aircraft not just to Sudan but to an SDN in Sudan.

Permalink Comments Off on Egyptair Shot Down by BIS for Sudan Airways Lease

Bookmark and Share


Copyright © 2015 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Apr

16

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
Permalink Comments Off on Thursday Grab Bag

Bookmark and Share


Copyright © 2015 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)