Glaring Omissions from OFAC LIst of Medical Items Criticized

Posted by at 8:34 pm on September 16, 2015
Category: OFAC

GE Giraffe Baby Warmer via [Fair Use]As regular readers probably know, the Office of Foreign Assets Control (“OFAC”) has issued a list of medical devices and items that are eligible to be exported to otherwise sanctioned countries under a general license, such as this list of medical devices and items that can be exported to the Crimea region of Ukraine.

There has been considerable criticism of these lists because of what appears to be arbitrary omissions of necessary and common medical items that should be eligible for a general license. But no one has put it better than Kathleen Palma, GE’s senior counsel for international trade compliance, did on Monday at meeting of the President’s Export Council Subcommittee on Export Administration [WARNING: EXPLICIT LANGUAGE AHEAD! NSFW!!] when she said this:

I would note that condoms are on the list but baby warmers and units for neonatal intensive care are not on the list.

Unflustered, an OFAC official at the meeting said that the agency was in the process of reviewing proposals to add more items to the list. No time frame, other than sometime before the zombie apocalypse, was given, nor was any indication offered of what items might be added.

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US Drops Charges Against Prof Accused of Emailing While Chinese-American

Posted by at 6:42 pm on September 13, 2015
Category: Criminal Penalties

Prof. Xiaoxing Xi via [Fair Use]
ABOVE: Dr. Xiaoxing Xi

In May of this year, federal agents raided the home of a Chinese-American physics professor, Dr. Xiaoxing Xi,  and dragged him from his home in handcuffs before his young daughters on charges that he emailed to a colleague in China design schematics for a pocket heater, a device used in superconductor research, despite a written agreement not to share such information. Temple University, where Dr. Xi taught, unceremoniously stripped him of his title of Chairman of the Physics Department, put him on administrative leave and restricted his communications with others at the university.

The DOJ shortly afterwards sent out an overheated press release, noting, for some reason, that Professor Xi, who is a naturalized U.S. citizen, was a “native of the People’s Republic of China,” apparently based on the heretofore unknown jurisprudential principal in criminal trials that defendants are innocent until proven Chinese.

Last Friday the government dropped all charges against Professor Xi, alluding obliquely in the court papers that, after the indictment, unspecified “additional information came to the attention of the government.” According to this New York Times article, the unspecified information was that the design schematics were not for the device that the government thought they were. More bluntly, the government was too stupid to understand what the designs were for, got the designs for another device confused with the one Professor Xi had agreed not to share, and then tried to wreck his life. Oh, and did the DOJ promptly issue a press release admitting its mistake? Of course not. Are you crazy? They apparently did not even tell Professor Xi they were sorry.

Dr. Xi said this to the New York Times:

I don’t expect them to understand everything I do. … But the fact that they don’t consult with experts and then charge me? Put my family through all this? Damage my reputation? They shouldn’t do this. This is not a joke. This is not a game.

Dr. Xi’s lawyer, according to the Times, went further and suggested that the prosecution targeted Dr. Xi because he was Chinese.

If he was Canadian-American or French-American, or he was from the U.K., would this have ever even got on the government’s radar? I don’t think so

Of course not. The DOJ press release which notes that Xi was born in China makes that clear. Apparently the folks at DOJ don’t think that they are bound either by actual science or by federal laws prohibiting discrimination based on national origin.


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Russian Export Case Larded with Bogus Spying Charges: Part 2

Posted by at 9:10 pm on September 10, 2015
Category: Criminal Penalties

Alexander Fishenko
ABOVE: Alexander Fishenko

Almost two years ago, this blog reported on the charges against Alexander Fishenko who, among other things, was accused of shipping various USML and CCL items to the Russian government without a license. Yesterday, according to this DOJ press release, Fishenko pleaded guilty to all the charges against him.

These charges included charges that Fishenko failed to register under the Foreign Agents Registration Act, a charge calculated to elicit a frenzy of headlines about the charges against a “Russian Spy.” And the press predictably took the bait then and took the bait again in reporting the plea agreement. The nominally respectable Bloomberg News headlined the plea deal as “Military Technology Exporter Admits to Spying for Moscow.” Even the previously mentioned DOJ press release only called Fishenko a “Russian Agent.”

The statute involved is the Foreign Agents Registration Act, which requires that any person in the United States acting on behalf of any foreign person, not just foreign governments or spymasters, must register with the Department of Justice. Section 1(c)(1) of the Act, 22 U.S.C. § 611(c)(1), defines the precise activities that trigger the registration requirement, including political activities for a foreign person or government, acting as a publicity agent for a foreign government or person, dispenses money on behalf of the foreign government or person, or representation of the foreign government or person before a government agency.

Under this definition, Fishenko might, I suppose, be said to have dispensed money on behalf of his Russian buyers in buying the items that were exported to them. The problem with this theory of liability under the act is section 3(d) of the Act which exempts from the registration requirements “private and nonpolitical activities in furtherance of the bona fide trade or commerce of such foreign principal.” Because the act covers acting on behalf of foreign governments and private foreign entities, every exporter would be a “foreign agent” or “spy” without this exemption.

As this blog noted in the original post, the only activity that Fishenko was accused of in engaging in for the Russian government was buying stuff. The fact that it was exported without a license does not prevent it from being bona fide trade. The bona fide requirement is designed to prevent foreign persons or governments from spreading influence simply by buying things that they don’t actually need. And again, because the act covers not just foreign governments but all foreign entities, if lacking a license for the export prevented the purchase for the foreign person from being bona fide trade, then all persons guilty of illegal exports are also necessarily “spies” unless they register under FARA.

Of course, since Fishenko pleaded guilty, we will never know how a court would come out on these arguments. If, as I suspect, the FARA charges were simply designed to poison the well with spy charges, the government might not have even bothered to press those charges had it ultimately been forced to go to trial.

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Through the Looking Glass: ITC To Investigate Cuban Restrictions on U.S. Trade

Posted by at 10:52 pm on September 9, 2015
Category: Cuba SanctionsInternational Trade CommissionOFAC

Cuba - Havana - Car by Didier Baertschiger [CC-BY-SA-2.0 (], via Flickr[cropped]

I’m not sure that chutzpah is a term applicable to government agencies, but, if it is, this is chutzpah. The International Trade Commission announced that it is investigating how

Cuban non-tariff measures, Cuban institutional and infrastructural factors, and other Cuban barriers … inhibit or affect the ability of U.S. and non-U.S. firms to conduct business in and with Cuba.

Say what? The U.S. has imposed an almost total embargo on all trade with Cuba for more than 50 years and now the U.S. is worried about the impact that Cuban non-tariff trade barriers have had on U.S. trade with the island? This is not much different from foxes complaining about chicken wire after they’ve already slipped through it and eaten all the chickens.

Not surprisingly, partisan politics is behind this insanity. The ITC investigation was originally opened at the behest of Democratic Senate Finance Chairman Ron Wyden, who asked that the ITC investigate the impact that the U.S. embargo on Cuba had on U.S. trade with Cuba. When Republican Orrin Hatch took over the Senate Finance Committee, he was not having any of that and asked the ITC to also look at Cuba’s restrictions on U.S. trade.

Your tax dollars at work.

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Exclusive Tip: How to Speed up an OFAC License Application

Posted by at 9:15 am on September 4, 2015
Category: OFAC

Diana Nyad via [Fair Use]A recent article in the Miami Herald discussed the bureaucratic entanglements involved when world-famous athlete Diana Nyad wanted to make a historic swim between Florida and Cuba. She needed an OFAC license to visit Cuba. Her support team needed a BIS license to take their boats into Cuban waters. And the response in Washington to Nyad’s request was this: Diana Nyad? Diana who? She wants to swim to Cuba? Why would anyone want to do that? Get back in line, lady, and wait your turn. We’re busy.

Well one of the interesting finds in Hilary Clinton’s emails (outside the awesome international trade kerfuffle over gefilte fish), according to the Miami Herald, was that it seems the only way that Diana got permission on time was that Hilary Rosen called Hillary Clinton and asked for help. The article had this money quote from Nyad:

You want to go to Cuba, especially with boats and vessels, you need an OFAC license … . You need the Treasury Department. You need the Department of Commerce.

It was difficult to train for something, doing 14-, 16-, 18-hour swims, trying to raise money, got a team taking off their jobs and families with no pay, and you don’t really know if it’s ever going to happen. You file those darn OFAC licenses and have no one to call. It’s very governmental, shall we say, bureaucratic paperwork.

First, Nyad wrote to her representative in DC, Debbi Wasserman Schulz, and asked for help, saying: “I have been told by lawyers within the Treasury that it will take either Hilary (sic) Clinton or Obama himself to clear my event.” No dice.

So Diana had Hilary Rosen email Hillary Clinton to ask for help. Hillary asked one of her advisors to help get the license and within 24 hours she had a license from OFAC. No you know what it takes. You need to be a world famous athlete and you need to get the ear of the Secretary of State. The rest of you, get back in line and wait (and wait and wait) for your turn.

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