Archive for June, 2011

Jun

8

Making Law By Press Conference

Posted by at 8:23 pm on June 8, 2011
Category: Venezuela
Ileana Ros-Lehtinen
ABOVE:Asst. Sec. Steinberg

On May 24, the State Department announced sanctions against a number of companies including Petróleos de Venezuela (“PDVSA”). According to the State Department press release, PDVSA was sanctioned under the Iran Sanctions Act (“ISA”) of 1996, as amended by the Comprehensive Iran Sanctions, Accountability, and Divestment Act (“CISADA) of 2010 because of alleged shipments of a gasoline additive to Iran between December 2010 and March 2011. The specific sanctions imposed appear to be, at least according to the press release, a ban on U.S. government procurement, Ex-Im Bank financing, and the grant of any export licenses to PDVSA.

The exact scope of these sanctions is unknown because as of today, more than two weeks later, the State Department hasn’t done anything but issue a press release, mention the sanctions in a special press briefing by Assistant Secretary of State James Steinberg, and provide atelephonic background briefing to certain members of the press. But a Federal Register notice? Nope. The State Department hasn’t even filed the notice for future publication in the Federal Register. Without such filing, under section 1507 of the Federal Register Act, the sanctions have no effect against a person unless the State Department can prove that they have actual notice of the sanctions.

Leaving aside the technicalities of the Federal Register Act, administrative action solely by press release violates the basic principle that this is a country of written laws that are not secret and are available to everyone. No matter how annoyed the Department of State is with Hugo Chavez and Iran, that is no reason to suspend these basic principles.

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Copyright © 2011 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)
Jun

7

Live and Let Spy

Posted by at 6:31 pm on June 7, 2011
Category: BIS

Spy VanThe Fayetteville Observer provides details of an ongoing investigation of Raleigh-based Law Enforcement Associates, Inc. by the Bureau of Industry and Security (“BIS”) with respect to alleged unlicensed exports of surveillance equipment to Morocco, Egypt, the Netherlands, and Great Britain. The investigation started with the seizure of a van outfitted with covert listening gear that was destined for Morocco.

Alert readers will probably immediately wonder about BIS’s “no see through” rule, which looks at the proper classification of an item independently of its component parts. That rule is found as Interpretation 2 in section 770.2 of the Export Administration Regulations.

There are two requirements for the “no see through” rule to apply. First, the part must be physically integrated into the unit to be exported. Second, the parts must be:

normal and usual components of the machine or equipment being exported [and] the physical incorporation is not used as a device to evade the requirement for a license

The issue here is whether the “normal and usual component” requirement is met. The answer to that requires the answer to a more-or-less metaphysical question. If the item being exported is seen as a van, then arguably surreptitious listening devices are not normal and usual components (unless there is some dealer option I’ve missed). But, if the exported item is seen as a “surveillance van,” the listening devices are almost certainly normal and usual components. So to answer that question you’ll need to dig out your copy of Aristotle’s Metaphysics and reflect upon the difference between accident (συμβεβεκός) and essence (το τι ην ειναι). Good luck, as Plato used to say.

An alternate theory is that maybe BIS thinks that the van is itself the listening device covered by ECCN 5A980. That theory founders because that ECCN only covers items that are “primarily useful” for “surreptitious interception of wire, oral, or electronic communications.” My guess is that — without recourse to Aristotle — it is pretty easy to determine that the van is primarily useful for driving and, if sufficiently tricked out, for sleeping, not for surreptitious listening.

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Copyright © 2011 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)
Jun

6

U.S. Company Announces Retrieval Service for Cuban Documents

Posted by at 10:01 pm on June 6, 2011
Category: Cuba Sanctions • OFAC

Cuban CertificatesJust how far does the information exception to our economic sanctions programs go? Of course, the traditional response from the Office of Foreign Asset Controls (“OFAC”), the agency that administers the U.S. economic sanctions regimes, is usually “Not very far.” The issue, here, is whether a particular activity is an export of information or an export of services (or some combination of the two.) Sometimes OFAC has tried to draw the distinction by saying that the exception does not apply to information not already in existence, although it makes a somewhat unaccountable (although welcome) exception for magazine subscriptions.

So where does this new Cuban document retrieval service fall? The service advertises that it uses “proprietary” means to retrieve Cuban birth certificates and other official certificates for people in the United States. Retrieving these documents from Cuban archives seems to pose few problems. But the service doesn’t stop there:

All documents retrieved from Cuba for any official use (Cuban passport, driver’s license and marriage applications etc) need to be “legalized” in Cuba in order to be recognized as an official document.

The certificates we provide are legalized with stamps and seals from the Ministerio de Relaciones Exteriores also known as MINREX.

Adding the legalization stamps, seals and other government doohickeys may be what steps over the line, because the retrieval company is not just exporting information already in existence but is taking existing information and providing services to alter it.

Section 515.545 of the Cuban Assets Control Regulations also seems to suggest that the legalization process may be one step too far:

This section does not authorize the remittance of royalties or other payments relating to works not yet in being, or for marketing and business consulting services, or artistic or other substantive
alteration or enhancements to informational materials

The company has said that this plan has been blessed by its lawyers and that they are not obtaining licenses for these transactions. I suppose that in the end the issue is whether the legalization of the document is or is not a “substantive alteration or enhancements.” I would be disinclined to opine to a client on that matter without at least some informal discussions with OFAC. So, I’m assuming that someone in OFAC likely provided at leat an informal reaction to the retrieval plan.

[Posting has been light lately due to demands at work This week my normal posting schedule ought to resume.]

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Copyright © 2011 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

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