Comments for ExportLawBlog http://www.exportlawblog.com Latest News on DDTC, BIS, OFAC, and other export law matters Sat, 13 Mar 2010 17:43:29 +0000 http://wordpress.org/?v=2.9.1 hourly 1 Comment on GAO Report on Iran Sanctions Blasts OFAC’s Dead Tree Licensing System by Mike Liberto http://www.exportlawblog.com/archives/1424/comment-page-1#comment-93391 Mike Liberto Sat, 13 Mar 2010 17:43:29 +0000 http://www.exportlawblog.com/?p=1424#comment-93391 It wont take too many trips to Dubai (especially in Winter) to be awakened by "the call" from your open window in the dawn and see the 30 ft Dows being loaded on the canal with every conceivable type of merchandise Made in USA and elsewhere, leaving for Iran. It has been this way forever, before there was a USA. Not unlike the OFAC desk, it is no far stretch to understand that even a buyer in UAE will not know if a few of the items being purchased will eventually go to Iran, or if he would be able to read a dows manifest if they were. It wont take too many trips to Dubai (especially in Winter) to be awakened by “the call” from your open window in the dawn and see the 30 ft Dows being loaded on the canal with every conceivable type of merchandise Made in USA and elsewhere, leaving for Iran. It has been this way forever, before there was a USA. Not unlike the OFAC desk, it is no far stretch to understand that even a buyer in UAE will not know if a few of the items being purchased will eventually go to Iran, or if he would be able to read a dows manifest if they were.

]]> Comment on GAO Report on Iran Sanctions Blasts OFAC’s Dead Tree Licensing System by John Pisa-Relli http://www.exportlawblog.com/archives/1424/comment-page-1#comment-93339 John Pisa-Relli Thu, 11 Mar 2010 17:15:53 +0000 http://www.exportlawblog.com/?p=1424#comment-93339 Hey, Clif, I didn't give you permission to use that archive photo of my old desk at OFAC.... Seriously, I worked at OFAC in the mid/late-90s, and I can tell you that while certainly they are not on par with DDTC and BIS regarding licensing automation, they continue to slouch toward the 21st century. At one point in my OFAC youth, I handled blocked assets licensing requests, and my big claim to fame was designing the PDF application form that they ended up using to make disposition of such cases more routine. At the time, there was great resistance to my effort to impose such formality on the licensing process by using a standard application. One manager there who shall remain unnamed chided me by saying words to the effect that "we're not bureaucrats like the folks at State and Commerce", with the implication being that OFAC licensing matters were lofty, unique, and not susceptible of being reduced to a routine exercise. Indeed.... For what it's worth, my current portfolio in-house is almost exclusively ITAR-related, so undoubtedly I'm being punished for whatever sins I committed when I was a bureaucrat myself. Just an anecdote from my wayward days at the Treasury Annex. Back to your regularly scheduled programming.... Hey, Clif, I didn’t give you permission to use that archive photo of my old desk at OFAC…. Seriously, I worked at OFAC in the mid/late-90s, and I can tell you that while certainly they are not on par with DDTC and BIS regarding licensing automation, they continue to slouch toward the 21st century. At one point in my OFAC youth, I handled blocked assets licensing requests, and my big claim to fame was designing the PDF application form that they ended up using to make disposition of such cases more routine. At the time, there was great resistance to my effort to impose such formality on the licensing process by using a standard application. One manager there who shall remain unnamed chided me by saying words to the effect that “we’re not bureaucrats like the folks at State and Commerce”, with the implication being that OFAC licensing matters were lofty, unique, and not susceptible of being reduced to a routine exercise.

Indeed…. For what it’s worth, my current portfolio in-house is almost exclusively ITAR-related, so undoubtedly I’m being punished for whatever sins I committed when I was a bureaucrat myself.

Just an anecdote from my wayward days at the Treasury Annex. Back to your regularly scheduled programming….

]]> Comment on GAO Report on Iran Sanctions Blasts OFAC’s Dead Tree Licensing System by Erich Ferrari http://www.exportlawblog.com/archives/1424/comment-page-1#comment-93335 Erich Ferrari Thu, 11 Mar 2010 13:42:18 +0000 http://www.exportlawblog.com/?p=1424#comment-93335 The U.A.E. huh? You don't say...... As for the mass of paper clogging up the halls of the the Treasury Annex, quite a bit of it has gone through my printer at some point. When doing document productions for responses to OFAC administrative subpoenas, I always ask the investigator: can I just put these documents on a disc for you? I inevitably get the same answer everytime: "We like everything in hard copy." Worth a shot I guess...maybe someday. I can only imagine how many trees have given their lives for the enforcement and administration of U.S. economic sanctions. The U.A.E. huh? You don’t say……

As for the mass of paper clogging up the halls of the the Treasury Annex, quite a bit of it has gone through my printer at some point. When doing document productions for responses to OFAC administrative subpoenas, I always ask the investigator: can I just put these documents on a disc for you? I inevitably get the same answer everytime: “We like everything in hard copy.” Worth a shot I guess…maybe someday.

I can only imagine how many trees have given their lives for the enforcement and administration of U.S. economic sanctions.

]]> Comment on Some Things Change; Some Things Don’t by Erich Ferrari http://www.exportlawblog.com/archives/1418/comment-page-1#comment-93334 Erich Ferrari Thu, 11 Mar 2010 13:31:28 +0000 http://www.exportlawblog.com/?p=1418#comment-93334 Clif, thanks for pointing that out. I went back and looked at the regs in the Federal Register and now I see the knowledge requirement. I knew I had to be missing something. I don't recall seeing that requirement in the 21 page document that was on OFAC's website on Tuesday. I tried to go back and find that link, but the link now takes you to the Federal Register section containing the new regulations. Oh well. Thanks for clearing that up, makes more sense now. Clif, thanks for pointing that out. I went back and looked at the regs in the Federal Register and now I see the knowledge requirement. I knew I had to be missing something.

I don’t recall seeing that requirement in the 21 page document that was on OFAC’s website on Tuesday. I tried to go back and find that link, but the link now takes you to the Federal Register section containing the new regulations. Oh well. Thanks for clearing that up, makes more sense now.

]]> Comment on GAO Report on Iran Sanctions Blasts OFAC’s Dead Tree Licensing System by Clif Burns http://www.exportlawblog.com/archives/1424/comment-page-1#comment-93333 Clif Burns Thu, 11 Mar 2010 12:39:28 +0000 http://www.exportlawblog.com/?p=1424#comment-93333 @Hillbilly: Excellent point. In that regard, the picture illustrating the post is an imaginative reconstruction of OFAC's licensing office and shouldn't be introduced as actual evidence. @Hillbilly: Excellent point. In that regard, the picture illustrating the post is an imaginative reconstruction of OFAC’s licensing office and shouldn’t be introduced as actual evidence.

]]> Comment on GAO Report on Iran Sanctions Blasts OFAC’s Dead Tree Licensing System by Hillbilly http://www.exportlawblog.com/archives/1424/comment-page-1#comment-93331 Hillbilly Thu, 11 Mar 2010 11:40:26 +0000 http://www.exportlawblog.com/?p=1424#comment-93331 When I read the GAO report last week, I thought back to the criminal cases in which OFAC would send a licensing officer to testify for the prosecution that the defendant had not applied for or received a license. With the GAO report in hand, Defense counsel should cross-examine that OFAC licensing officer and ask: "How do you know?" When I read the GAO report last week, I thought back to the criminal cases in which OFAC would send a licensing officer to testify for the prosecution that the defendant had not applied for or received a license. With the GAO report in hand, Defense counsel should cross-examine that OFAC licensing officer and ask: “How do you know?”

]]> Comment on Some Things Change; Some Things Don’t by Clif Burns http://www.exportlawblog.com/archives/1418/comment-page-1#comment-93330 Clif Burns Thu, 11 Mar 2010 08:46:34 +0000 http://www.exportlawblog.com/?p=1418#comment-93330 @Erich. The general license doesn't prohibit exports to the governments of Iran, Cuba or Sudan. It prohibits exports when the exporter "knows or has reason to know" that the export is intended for the Government. In most cases of anonymous downloads, that knowledge or reason to know won't exist. @Erich. The general license doesn’t prohibit exports to the governments of Iran, Cuba or Sudan. It prohibits exports when the exporter “knows or has reason to know” that the export is intended for the Government. In most cases of anonymous downloads, that knowledge or reason to know won’t exist.

]]> Comment on Some Things Change; Some Things Don’t by Erich Ferrari http://www.exportlawblog.com/archives/1418/comment-page-1#comment-93325 Erich Ferrari Thu, 11 Mar 2010 02:07:13 +0000 http://www.exportlawblog.com/?p=1418#comment-93325 The general license(s) don't necessarily make sense to me. Perhaps someone else can clear it up. The way I see it these general license(s) place U.S. exporters of internet based personal communications software/services in a tough spot. On one hand, they are still prohibited from exporting to the governments of Iran, Sudan, and Cuba. Yet, they need to ensure that the product is publicly available at no cost. In such a scenario, how are they supposed to monitor whether or not government agents in Iran, Cuba, or Sudan are downloading this software which is, according to the new regulations, required to be publcly available for free. The regulations require the exporter to make such services available to everyone at no cost, yet at the time places restrictions on who it can be exported to. Since many of these services require nothing more than the creation of an alias and a password to use an internet based service or software (for example, Yahoo Messenger), how is the exporter supposed to monitor and block certain parties from downloading it. There might be a solution I'm not thinking of, but I forsee this leading to problems down the road. OFAC needs to address this issue as it is bound to come up in the future when some exporter runs afoul of the regulations by unwittingly providing their services to agents of the governments of Iran, Cuba, or Sudan. The general license(s) don’t necessarily make sense to me. Perhaps someone else can clear it up.

The way I see it these general license(s) place U.S. exporters of internet based personal communications software/services in a tough spot. On one hand, they are still prohibited from exporting to the governments of Iran, Sudan, and Cuba. Yet, they need to ensure that the product is publicly available at no cost.

In such a scenario, how are they supposed to monitor whether or not government agents in Iran, Cuba, or Sudan are downloading this software which is, according to the new regulations, required to be publcly available for free.

The regulations require the exporter to make such services available to everyone at no cost, yet at the time places restrictions on who it can be exported to.

Since many of these services require nothing more than the creation of an alias and a password to use an internet based service or software (for example, Yahoo Messenger), how is the exporter supposed to monitor and block certain parties from downloading it. There might be a solution I’m not thinking of, but I forsee this leading to problems down the road. OFAC needs to address this issue as it is bound to come up in the future when some exporter runs afoul of the regulations by unwittingly providing their services to agents of the governments of Iran, Cuba, or Sudan.

]]> Comment on Some Things Change; Some Things Don’t by Scott K. http://www.exportlawblog.com/archives/1418/comment-page-1#comment-93324 Scott K. Thu, 11 Mar 2010 00:29:35 +0000 http://www.exportlawblog.com/?p=1418#comment-93324 Thanks to the existence of TwitPay (www.twitpay.me, note the hosting in Montenegro), support for the revolution isn't the only thing that tweets to Iran will carry. Using this service, PayPal will send money to and from Twitter accounts. Thanks to the existence of TwitPay (www.twitpay.me, note the hosting in Montenegro), support for the revolution isn’t the only thing that tweets to Iran will carry. Using this service, PayPal will send money to and from Twitter accounts.

]]> Comment on Some Things Change; Some Things Don’t by Kelly Yip http://www.exportlawblog.com/archives/1418/comment-page-1#comment-93300 Kelly Yip Wed, 10 Mar 2010 13:55:37 +0000 http://www.exportlawblog.com/?p=1418#comment-93300 That is truly funny about the fine of $575.00...and so true! In truth, like you, I was not overly impressed with yesterday's release of OFAC fines and penalties. I have also noticed that there doesn’t seem to have been many enforcement actions or fines taken against firms for using sanctioned vessels. Do you think this is down to OFAC resource levels or do you think there is another reason? Did you happen to read "U.S. Enriches Companies Defying Its Policy on Iran" in the New York Times this past Saturday? http://www.nytimes.com/2010/03/07/world/middleeast/07sanctions.html?hp=&pagewanted=print If financial institutions inadvertently effected transactions to Iran, they would be severely ($$$$) penalized. However, our federal government for the past ten years has awarded billions "to companies that defied American sanctions law by making large investments that helped Iran develop its vast oil and gas reserves." It appears there are two set of policies; one for financial institutions and the other for Corporate America. Regards, Kelly Yip That is truly funny about the fine of $575.00…and so true! In truth, like you, I was not overly impressed with yesterday’s release of OFAC fines and penalties.
I have also noticed that there doesn’t seem to have been many enforcement actions or fines taken against firms for using sanctioned vessels. Do you think this is down to OFAC resource levels or do you think there is another reason?

Did you happen to read “U.S. Enriches Companies Defying Its Policy on Iran” in the New York Times this past Saturday?
http://www.nytimes.com/2010/03/07/world/middleeast/07sanctions.html?hp=&pagewanted=print

If financial institutions inadvertently effected transactions to Iran, they would be severely ($$$$) penalized. However, our federal government for the past ten years has awarded billions “to companies that defied American sanctions law by making large investments that helped Iran develop its vast oil and gas reserves.” It appears there are two set of policies; one for financial institutions and the other for Corporate America.

Regards,
Kelly Yip

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