Archive for March, 2009


Mar

31

Did He Really Say That?


Posted by at 8:10 pm on March 31, 2009
Category: Iran Sanctions

Tehran MonumentAt the Bureau of Industry and Security’s (“BIS”) Export Control Forum in Newport Beach, California, on March 16, Tony Christino, a senior policy analyst for BIS, announced that a top priority for BIS as the new administration begins is to attempt to eliminate the jurisdictional overlap between BIS and the Office of Foreign Assets Control (“OFAC”) with respect to exports to Iran. It’s probably not overly cynical for me to suggest that the way that BIS staffers might want to eliminate that overlap is to take stuff from OFAC and give it to BIS. Even so, that’s all well and good and something to be commended, whether it involves centralizing authority for exports to Iran in BIS or in OFAC.

However, one thing that Christino said, at least as reported by the Washington Tariff and Trade Letter (subscription required) is not something that the export community is likely to welcome

Reexports to Iran have been the target of several BIS enforcement actions against both U.S. exporters and foreign reexporters. “Where the problem really seems to arise is that reexporters and distributors don’t seem to understand that they can’t replenish inventory knowing that they have a demand from Iran,” Christino said. When exporting to customers or distributors in the Middle East especially, even without knowledge of a reexport, U.S. firms could face “some kind of jeopardy,” he said.

Say what? Exporters face penalties for exporting goods to customers in the Middle East even without any knowledge of a possible reexport of those goods to Iran? If that’s what Christino meant, or even said, the effect is that U.S. companies should stop exporting completely to the Middle East. I’d like to think that Christino didn’t really say that.

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Mar

27

How To Guarantee the Maximum Penalty


Posted by at 4:44 pm on March 27, 2009
Category: OFAC

1525 S. Garfield, Alhambra, CA
ABOVE: Golden Escrow HQ

The Treasury Department’s Office of Foreign Assets Control (“OFAC”) released its monthly report on civil penalties today and one case, involving Golden Escrow, Inc., caught our eye. The escrow company was accused of attempting to transfer $364,595.48 to the Sudan office of Jilin International Economic and Technical Corp., a Chinese road and bridge construction company. Jilin’s Sudan projects have included most recently the construction of a Nile river bridge in Merowe, Sudan.

OFAC imposed a fine of $11,000 on Golden Escrow in connection with this transaction. Since the pre-penalty notice was issued before October 16, 2007, and thus before the passage of the International Emergency Economic Powers Enhancement Act, this was the maximum fine that OFAC could impose.

The reason that the maximum fine was imposed seems clear from the Penalty Notice:

The [Pre-Penalty] Notice [PPN] proposed a penalty in the amount of $11,000 and advised Golden of the right to make a written presentation to OFAC setting forth reasons why a penalty should not be imposed, or if imposed, why it should be less than that proposed. Such written response was required to be made within thirty (30) days of the mailing of the Notice.

On May 8, 2007, OFAC mailed the Notice to Golden’s address. On May 18, 2007, a Golden representative telephoned OFAC and informed OFAC of its receipt of the Notice and stated that Golden did not intend to pay the fine. No written response to the PPN has been received from Golden.

After that, I’m sure OFAC had to think long and hard before finding that there were no mitigating factors warranting a reduction in the proposed penalty.

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Mar

26

Thursday Export Law Grab Bag


Posted by at 6:44 pm on March 26, 2009
Category: Arms ExportCriminal Penalties

Grab BagNo big news today, so it’s time for another Export Law Blog grab bag:

  • A Swiss court convicted an un-named Czech man for exporting missile-related electronic components to Iran. The man claimed he thought the components were harmless. The court really threw the book at him and fined him 5,000 Swiss francs ($4,440) and ordered 26,500 Swiss francs in profits seized. Apparently export violations in Switzerland are only slightly more serious than speeding tickets.
  • A woman that was convicted in October of exporting mobile phone equipment to Iraq right before the U.S. invasion was sentenced yesterday to 6 years in prison and order to pay a $1.1 million dollar forfeiture. The prosecution had asked for a sentence at the low end of federal sentencing guidelines, which they calculated to be around 20 years in prison. Even though the judge gave a much lower sentence, I’m sure she still wished she had been tried in Switzerland.
  • Russia earns the good citizen award for passing a law lowering the number of weapons subject to export control. The new law removes export controls from revolvers and self-loading pistols, rifles and carbines, submachine guns, automatic rifles, light machine guns, anti-aircraft machine guns, anti-tank guns, and mortars with a caliber of less than 100 mm.
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Mar

24

Irish Company Indicted for Exports to Iran


Posted by at 7:24 pm on March 24, 2009
Category: Criminal PenaltiesIran Sanctions

Drumcliffe Church
ABOVE: Drumcliffe Church

In an earlier story, we reported on the arrest of a Tehran-based businessman on charges that, among other things, he exported helicopter engines from the United States to Iran. One of the intermediate consignees for that export was, according to court documents, an unnamed “Irish Trading Company.” Today, a 2008 indictment against the “Irish Trading Company” and three of its principals was unsealed. The company in question was Mac Aviation from Drumcliffe, County Sligo, Ireland, and the principals were Tom McGuinn, his son Sean McGuinn, and Sean Byrne.

As it turns out, Tom McGuinn is no stranger to U.S. export laws. He’s on the debarred parties list maintained by the State Department’s Directorate of Defense Trade Controls. Debarred parties are prohibited from engaging in exports of defense services and defense articles. Mr. McGuinn’s debarment was based on a 1996 conviction for violation of the Arms Export Control Act. McGuinn was sentenced to time served and three years of supervised release plus a $50 assessment fee.

Only the docket sheet for the 1996 conviction is available, so we’re not certain what the precise charges against Mr. McGuinn were in that case. However, it seems likely to have arisen from an attempted export of night vision equipment to Iran in 1992 in which Mac Aviation was involved. The night vision equipment, on its way from Ireland to Tehran, was seized in London by British Customs. At the time of the seizure, Mr. McGuinn described himself as an “ex-director” of the company Mac Aviation. In addition, McGuinn said he had “no idea why the stuff was blocked” and that his firm “would never get involved without an export license.”

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Mar

23

Iran Plays the Name Game


Posted by at 5:41 pm on March 23, 2009
Category: General

Fifth Ocean RenamedOne of our readers has been monitoring the Lloyd’s Register (subscription required) of shipping vessels and noticed something unusual: bunches of Iranian ships were changing their names. For example, on November 16, 2008, the the Islamic Republic of Iran Shipping Lines’ Brilliance became the Mulberry.

No matter how odd a name Brilliance was, it probably wasn’t some desire to give the ship a more nautically correct name that led to the change. Besides changing it to Mulberry probably didn’t reduce the nautical oddness quotient, and I would guess that Iranian sailors on shore leave looking for some good times got more than a little ribbing from sailors from other countries when they said they crewed the Mulberry. (“Hey, is Andy Griffith on your ship too?” “No, smarty, and besides you’re thinking of Mayberry.” “Hey, when does the Gooseberry leave port?” “For the eleventieth time, I told you it’s Mulberry!!!”)

No, the likely reason was that the Brilliance was, on September 10, 2008, added by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) to its lists of Specially Designated Nationals and Blocked Persons, as were all the other vessels of the Islamic Republic of Iran Shipping Lines. Shortly thereafter, the Chairman of IRISL, in an interview with Dow Jones Newswires, pooh-poohed the notion that the sanctions were having any effect on his business.

We have not had any problem with admission of our ships. We have no shipping contracts and have no lines to America, and we have no relation with America’s (shipping) routes. We work with Europe and Asia and when they sell something to Iran, they admit our ships

It makes you wonder then why, just weeks after the new sanctions, IRISL renamed forty-six vessels in its fleet. IRISL probably figured it could rename its ships faster than OFAC could revise its list. Of course, IRISL can’t change the unique I.M.O. number assigned to its ships and contained in each ship’s SDN listing. Still, the Iranians are obviously banking on the likelihood that some shippers may only pay attention to vessel’s name and won’t focus on its I.M.O. number.

For the record, here are the IRISL vessels with post-sanctions name changes:

OFAC Vessel Name New Name Date of Change
BRILLIANCE (a.k.a. IRISL – IRAN BRILLIANCE); Vessel Registration Identification IMO 9051636 (vessel) [NPWMD] Mulberry 11/16/2008
DAPPER (a.k.a. IRISL – IRAN DAPPER); Vessel Registration Identification IMO 8309646 (vessel) [NPWMD] Angel 01/23/2009
DIGNIFIED (a.k.a. IRAN DIGNIFIED); Vessel Registration Identification IMO 8309610 (vessel) [NPWMD] Aquarian 01/02/2009
ELEVENTH OCEAN; Vessel Registration Identification IMO 9209324 (vessel) [NPWMD] Daffodil 12/12/2008
FIFTH OCEAN; Vessel Registration Identification IMO 9349667 (vessel) [NPWMD] Decker 12/24/2008
IRAN AFZAL; Vessel Registration Identification IMO 8105284 (vessel) [NPWMD] Parmida 12/31/2008
IRAN AMANAT; Vessel Registration Identification IMO 8112990 (vessel) [NPWMD] Tabak 12/31/2008
IRAN ARDEBIL; Vessel Registration Identification IMO 9284154 (vessel) [NPWMD] Sepanta 01/20/2009
IRAN AZADI; Vessel Registration Identification IMO 7632838 (vessel) [NPWMD] Anoosh 01/20/2009
IRAN BAM; Vessel Registration Identification IMO 9323833 (vessel) [NPWMD] Horsham 01/17/2009
IRAN BIRJAND; Vessel Registration Identification IMO 9305219 (vessel) [NPWMD] Tongham 01/20/2009
IRAN BOJNOORD; Vessel Registration Identification IMO 9305207 (vessel) [NPWMD] Uppercourt 01/23/2009
IRAN BRAVE; Vessel Registration Identification IMO 9051650 (vessel) [NPWMD] Margrave 01/05/2009
IRAN BROOJERDI; Vessel Registration Identification IMO 7502722 (vessel) [NPWMD] Dinna 11/26/2008
IRAN BUSHEHR; Vessel Registration Identification IMO 9270658 (vessel) [NPWMD] Silver Zone 12/31/2008
IRAN DEYANAT; Vessel Registration Identification IMO 8107579 (vessel) [NPWMD] Markarid 01/09/2009
IRAN DOLPHIN; Vessel Registration Identification IMO 8320195 (vessel) [NPWMD] Alameda 01/01/2009
IRAN ENTEKHAB; Vessel Registration Identification IMO 7632814 (vessel) [NPWMD] Assa 01/11/2009
IRAN GHAZI; Vessel Registration Identification IMO 8309672 (vessel) [NPWMD] Ajax 12/31/2008
IRAN ILAM; Vessel Registration Identification IMO 9283033 (vessel) [NPWMD] Sepitam 12/31/2008
IRAN KOLAHDOOZ; Vessel Registration Identification IMO 7428809 (vessel) [NPWMD] Despina 01/13/2009
IRAN MADANI; Vessel Registration Identification IMO 8309622 (vessel) [NPWMD] Adventist 12/14/2008
IRAN NAVAB (a.k.a. IRISL – IRAN DESTINY); Vessel Registration Identification IMO 8320145 (vessel) [NPWMD] Apollo 01/30/2009
IRAN PIROOZI; Vessel Registration Identification IMO 9283007 (vessel) [NPWMD] Sakas 01/14/2009
IRAN SEPAH; Vessel Registration Identification IMO 7375363 (vessel) [NPWMD] Hootan 01/20/2009
IRAN SHARIAT; Vessel Registration Identification IMO 8107581 (vessel) [NPWMD] Barsam 01/12/2009
IRAN TABAS; Vessel Registration Identification IMO 9305192 (vessel) [NPWMD] Shere 11/24/2008
IRAN TAKHTI; Vessel Registration Identification IMO 7602194 (vessel) [NPWMD] Zaven 12/29/2008
IRAN YASOOJ; Vessel Registration Identification IMO 9284142 (vessel) [NPWMD] Simber 12/25/2008
IRAN ZANJAN; Vessel Registration Identification IMO 9283019 (vessel) [NPWMD] Visea 01/27/2009
LUCKY LILY (a.k.a. IRAN LUCKY LILY); Vessel Registration Identification IMO 9165827 (vessel) [NPWMD] Golden Rod 12/11/2008
LUCKY MAN (a.k.a. IRAN LUCKY MAN); Vessel Registration Identification IMO 9165839 (vessel) [NPWMD] Garland 12/02/2008
MIR DAMAD; Vessel Registration Identification IMO 9148491 (vessel) [NPWMD] Ocean Bride 10/27/2008
NEW STATE (a.k.a. IRAN NEW STATE); Vessel Registration Identification IMO 9209336 (vessel) [NPWMD] Dandelion 11/12/2008
NINTH OCEAN; Vessel Registration Identification IMO 9165798 (vessel) [NPWMD] Galax 01/15/2009
OCEAN CANDLE (a.k.a. IRAN OCEAN CANDLE); Vessel Registration Identification IMO 9167253 (vessel) [NPWMD] Lantana 01/05/2009
PRETTY SEA (a.k.a. IRAN PRETTY SEA (KHUZESTAN)); Vessel Registration Identification IMO 9167277 (vessel) [NPWMD] Lavender 12/11/2008
SEA BLOOM (a.k.a. IRAN SEA BLOOM); Vessel Registration Identification IMO 9167291 (vessel) [NPWMD] Lodestar 12/03/2008
SEA FLOWER; Vessel Registration Identification IMO 9167289 (vessel) [NPWMD] Limnetic 11/15/2008
SEA STATE (a.k.a. IRAN SEA STATE); Vessel Registration Identification IMO 9167265 (vessel) [NPWMD] Lilied 11/20/2008
SEVENTH OCEAN; Vessel Registration Identification IMO 9165786 (vessel) [NPWMD] Gabion 11/27/2008
SIXTH OCEAN; Vessel Registration Identification IMO 9349679 (vessel) [NPWMD] Decretive 12/15/2008
TENTH OCEAN; Vessel Registration Identification IMO 9165815 (vessel) [NPWMD] Gladiolus 12/10/2008
TWELFTH OCEAN; Vessel Registration Identification IMO 9209348 (vessel) [NPWMD] Dandle 12/10/2008
VAAFI (a.k.a. IRAN VAAFI); Vessel Registration Identification IMO 9387786 (vessel) [NPWMD] Chimes 01/28/2009

The lesson here, and it probably shouldn’t be down here after the long table, is checking vessel names isn’t enough. You have to check the I.M.O. number as well.

Oh, and feel free in the comments section, to make fun of the new names, obviously crafted to make the ships sound, well, less Iranian. I mean why else would you name a ship “Lavender” or “Dandelion”? Those are names for soaps or body washes, not ships.

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Copyright © 2009 Clif Burns. All Rights Reserved.
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