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Jun

25

OFAC v. ATP: Game, Set, Match to OFAC


Posted by at 9:27 pm on June 25, 2013
Category: Iran SanctionsOFAC

J. Edmond Barre http://commons.wikimedia.org/wiki/File:J._Edmond_Barre.jpg [Public Domain]In its quest to keep the world safe from an Iranian nuclear bomb, the Office of Foreign Assets Control has focused its laser-like scrutiny on an Iranian tennis referee. Obviously, the same skills required to call a ball out or to halt a match for rain are critical to the process of uranium enrichment.

In this regard, OFAC has just fined ATP Tour, Inc. $48,600 as part of a settlement of charges that ATP had made “salary payments to an individual who is ordinarily resident in Iran … for services rendered and expenses incurred in connection with ATP tournaments the individual officiated.” The settlement documents do not reveal the individual involved but it almost certainly has to be Ali Nili, a well-known Gold Badge tennis umpire who has frequently officiated ATP and other international tennis matches.

One of the things that probably, and somewhat justifiably, hacked off OFAC is that apparently ATP made 8 payments to the Iranian referee after it had received a warning letter from OFAC about the payments. That was probably a bad idea, since even OFAC admits in the settlement papers that paying Iranian refs “represent[s] relatively low harm to the sanctions program.” You think? OFAC also indicates that the payments were probably licensable.

Another interesting area of speculation, not directly revealed in the settlement documents, is what is currently being done with Ali Nili who is still officiating ATP matches, like this one at the Shanghai Rolex Masters in 2012. I’m assuming that ATP has now in fact applied for, and received,  an OFAC license.

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Copyright © 2013 Clif Burns. All Rights Reserved.
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Jun

13

Syria Sanctions Loosened To Benefit Rebels and Civilian Population


Posted by at 9:04 pm on June 13, 2013
Category: BISOFACSyria

By Bo yaser (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons http://commons.wikimedia.org/wiki/File%3ADestruction_in_Homs_(4).jpg
ABOVE: Destruction in Homs, Syria

Just as the Assad government appears to be gaining ground back from the rebels, the White House announced certain measures loosening the sanctions on Syria. Yesterday, BIS issued a notice on its website that it would begin processing licenses for exports of certain goods related to reconstruction of infrastructure in areas held by the rebels. Specifically, the agency indicated that license applications would be accepted for commodities, technology and software related to

water supply and sanitation, agricultural production and food processing, power generation, oil and gas production, construction and engineering, transportation, and educational infrastructure. . . .

BIS promised that implementing regulations “shortly” but indicated that applications could be filed “immediately.”

Similarly, OFAC released a Statement of Policy permitting the export of a somewhat narrower group of services. The Statement of Policy indicates that OFAC will consider on a case-by-case basis applications to permit services in the Syrian telecommunication industry to enable private persons to better access the Internet and in the agricultural sector. Certain petroleum transactions benefiting the rebel forces may also be authorized. Finally, OFAC revised Syria General License 11 and replaced it with General License 11A authorizing NGOs to engage in certain activities designed to preserve the cultural heritage of Syria including museums, historic buildings and archaeological sites.

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Copyright © 2013 Clif Burns. All Rights Reserved.
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Jun

12

Section 219 Iran Notices: Down the “Affiliate” Slippery Slope


Posted by at 9:33 pm on June 12, 2013
Category: General

Source: Google Maps http://goo.gl/maps/GqKvy
ABOVE: Carlyle Group DC HQ

A major headache in complying with the notice requirement in section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 has been determining the scope of the statutory requirement for publicly traded companies to file notices with the SEC of their own activities, and those of their “affiliates,” with Iran. Unfortunately, the law does not provide a definition of “affiliate” making it difficult for companies to be certain of the required scope of the disclosure.

A disclosure (subscription required) last Friday by HD Supply Inc. illustrates how broadly the affiliate net may reach. In that disclosure filed with the SEC the company disclosed the presumably legal dealings in Iran of a Spanish company in which one of HD’s investors had invested. Specifically, the notice disclosed some services provided by Applus+ to Iran’s Industrial Development and Renovation Organization (“IRDO”), an Iranian government agency. One of Applus’s investors, the Carlyle Group, was also an investor in HD Supply.

So at this point, what are the limits on what constitutes an “affiliate”? If another investor in Applus+ had an investment in a company that had an investment in a company doing business in Iran, would that need to be disclosed as well? Your guess is as good as mine.

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Copyright © 2013 Clif Burns. All Rights Reserved.
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Jun

6

Export Control Reform Roundtable in Boulder


Posted by at 12:46 pm on June 6, 2013
Category: Export Reform

By Brylie Oxley (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons http://commons.wikimedia.org/wiki/File%3ABoulder_Colorado_-_Perl_Street_Mall_-2005-10-14T205944.pngNext Tuesday, June 11, I’ll be in Boulder leading a round-table discussion on export control reform. And the best part: it’s free. So, if you’re in the area, please feel free to come and join in.

The format for the discussion will be pretty open, so if people who are attending want to talk about other export issues or have other questions, we can talk about that too.

Details on time, location and how to RSVP are here.

I hope to see you there.

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Jun

4

Nice Work If You Can Get It


Posted by at 8:26 pm on June 4, 2013
Category: BISCriminal Penalties

Toray Carbon Fiber http://brooknewmaterial.com/english/proshow.asp?articleid=609 [Fair Use]Lisong Ma, a Chinese national, pleaded guilty last week to charges that he attempted to export carbon fiber from the United States without a license. Carbon fiber meeting certain technical qualifications is classified as ECCN 1C010 and would require a license from the Bureau of Industry and Security (“BIS”) before it could be exported to China. Reading the DOJ press release announcing the plea suggests that the defendant was either incredibly stupid or that something else was going on.

According to the DOJ account, the defendant contacted an undercover agent online and inquired into the purchase of a large amount of Toray T800 carbon fiber. What is strange is that the defendant actually came to the United States to close the deal. And, of course, the rest is history.

But what make this strange is that the Toray carbon fiber is made in Japan and appears to be readily available in China. Either the defendant was just dumber than the carbon fiber he was trying to buy or, possibly, the agents proposed an incredibly attractive price to lure him into the United States. Admittedly the failure to recognize a price “too good to be true,” if that is what happened here, is probably also a form of stupidity

As is typical with press releases of this kind, the government agencies involved spare no effort to pat themselves on the back for nabbing this dangerous criminal through “covert cyber operations.” Although “covert cyber operations” sounds intriguing, what it means, ultimately, is having a bunch of federal agents surf the net and hang out at alibaba.com looking for exporters to nab by dangling sweet deals in front of them. As they say (or sing sometimes): nice work if you can get it.

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(No republication, syndication or use permitted without my consent.)