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Jul

16

Wednesday Export Law Grab Bag


Posted by at 5:55 pm on July 16, 2008
Category: General

Grab BagIt’s a slow day today in export news, so we’re bringing you a grab bag of various items, each interesting but none worthy of an entire post:

  • Vanderbilt University has announced that it has hired a new assistant director of export compliance to handle the “new wave of federal export control regulations that is crashing down on Vanderbilt.” Were we asleep and missed a new wave of export control regulations or did Vanderbilt just wake up and discover the export regulations that crashed down on Vanderbilt years ago?
  • An article on the Deutsche Welle website indicates that German firms are circumventing sanctions on Iran by doing business in Iran with suitcases of cash to avoid detection. This leads to the day’s most amusing quote from a German businessman living in Tehran:

    “If a plane crashes on its way to Tehran from Germany, then the loss of the luggage would be more expensive than the loss of the plane,” he said.

  • A spokesman for the State Department testified yesterday in a Senate hearing that in response to the sham electoral victory of Robert Mugabe in Zimbabwe, the United States is considering additional sanctions against individuals and government entities in Zimbabwe. Raise your hands if you think these will lead Mugabe to break down in tears, resign his office, and flee the country.
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Copyright © 2008 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Jul

15

Colorado Company Charged With Violating Cuba Embargo


Posted by at 10:08 pm on July 15, 2008
Category: Criminal PenaltiesCuba Sanctions

Basin View SoftwareThe U.S. Attorney for the District of Columbia issued a press release today on charges filed against Platte River Associates in Boulder, Colorado, for violating the U.S. embargo on trade with Cuba. A copy of the criminal information detailing the charges is not yet available, and the press release raises as many questions as it answers.

According to the press release:

[Platte River] provided specialized technical computer software and computer training, which was then used to create a model for the potential exploration and development of oil and gas within the territorial waters of Cuba, without first having obtained a license from the Secretary of the Treasury.

No further information is provided relating to the substance of the charges, but the description provided here doesn’t really state all the elements of a violation. It seems unlikely, based on the language in the press release, that the training was provided to Cuban nationals or the Cuban government. Likely it was provided to nationals of other countries such as China, which is indeed involved in efforts to exploit Cuba’s offshore oil reserves. Even then, providing that software so that potential exploration can be modeled doesn’t violate the embargo until the software is used for actual exploration and then only if Platte had knowledge that the software would be used for those purposes.

The criminal information, when available, will likely provide enough information to evaluate the charges more fully, but, at the moment, not everything adds up. Once the criminal information is available, we will update this post.

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Copyright © 2008 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Jul

14

Acquitted Export Defendant Goes After U.S. Attorney


Posted by at 6:26 pm on July 14, 2008
Category: Arms ExportCriminal Penalties

Alice Martin
ABOVE: U.S. Attorney Alice Martin


The Alex Latifi saga continues. As we have reported in detail here on Export Law Blog, Mr. Latifi was acquitted on charges that emailing a drawing of a Blackhawk helicopter part to a Chinese supplier violated the Arms Export Control Act. The acquittal appears to have been based, at least in part, on the availability of that drawing on the Internet.

Latifi’s attorney, Henry Frohsin, indicated on Friday that he has filed a complaint with the Department of Justice’s Office of Professional Responsibility against Alice Martin, the U.S. Attorney involved in the prosecution. A copy of the complaint is not publicly available, but another attorney in Frohsin’s firm told the Birmingham News that the complaint alleges that the government had exculpatory evidence that it failed to provide to the defense team. The precise nature of that exculpatory evidence was not revealed to the newspaper.

Alice Martin told the Birmingham News that her office has been the unsuccessful target of earlier complaints and that she was certain that her side would prevail again.

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Copyright © 2008 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Jul

10

Beware Syrians Bearing Duty-Free


Posted by at 5:39 pm on July 10, 2008
Category: Syria

Damascus Duty FreeThe Office of Foreign Assets Control (“OFAC”) today continued its cage match with Rami Makhluf, the maternal cousin of Syria’s President Bashar al-Assad and owner of Syriatel, Syria’s largest mobile phone provider. Previously, OFAC has designated Makhluf as an SDN based on the novel (and dubious) theory that Makhluf’s leveraging of his family relationship to al-Assad to obtain improper business advantages for himself in Syria threatens the security of the United States.

Today OFAC designated two of Makhluf’s most visible business enterprises as SDNs — Syriatel and Ramak Duty Free, a chain of duty free stores that includes Damascus Duty Free at the Damascus International Airport. As a result of that designation, U.S. citizens are prohibited from doing business with either entity. (OFAC’s press release on the designation can be found here.)

This may catch many Americans traveling to Syria unaware. The Damascus Duty Free at the airport is reputed to have a large selection of goods at attractive discounts and is popular among travelers departing the airport. The State Department’s guidance page on travel to Syria has not yet been updated to reflect this new restriction, stating only that, because Syria is a designated state sponsor of terrorism, U.S. citizens “are prohibited from engaging in financial transactions which a U.S. person knows or has reasonable cause to believe pose a risk of furthering terrorists’ acts in the United States.”

Americans traveling in Syria with unlocked GSM phones might also violate the sanctions if they bought a pre-paid SIM card from Syriatel for use in Syria. Buying telcom services from Syriatel is arguably exempt under the Berman Amendment, but the purchase of the hardware — the SIM card — arguably could overstep the line.

One major American company is currently providing service to Syriatel. Network Solutions is the registrar for syriatel.com, which, as of this posting, was still functioning. Given the increased penalties for violating U.S. sanctions laws, it won’t be surprising if that website disappears shortly.

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Copyright © 2008 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Jul

8

Our Secret Weapon Against Tehran: Cigarettes


Posted by at 7:54 pm on July 8, 2008
Category: General

Iranian Coke Bottles
ABOVE: Coke and Fanta in Iran


A fascinating Associated Press article published today reports the results of an FOIA request the wire service made for information relating to U.S. exports to Iran. According to the information obtained by the AP, U.S. exports have grown more than ten-fold during the last seven years of the Bush administration, notwithstanding U.S. concerns about nuclear proliferation activities by Iran. The largest export: cigarettes. Almost $158 million dollars worth of cigarettes. That’s a lot of lung cancer and heart disease. (Full disclosure: as a former smoker, I tend to be a rabidly anti-smoking.)

Most surprisingly, the figures given to the AP reveal military exports to Iran, including $106,635 in military rifles and $8,760 in rifle parts and other accessories. Adam Szubin, speaking for the Office of Foreign Assets Control, argued that it was unlikely that these exports actually occurred and cited the possibility that shipping documents listed these codes erroneously or that shippers may have confused Iran and Iraq when filling out these documents. Some support for this can be found in government data saying that the U.S. exported $13,000 in “aircraft launching gear and/or deck arrestors” to Iran. As far as anyone knows Iran doesn’t have any aircraft carriers Still, even if these were mistakes by the shippers, one has to wonder why someone at Customs didn’t catch these mistakes.

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Copyright © 2008 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)