Nelson S. Galgoul, the Brazilian distributor for software company Engineering Dynamics, who sold the company’s software to customers in Iran was sentenced to 13 months in jail, a fine of $100,000 and a forfeiture of $109,291 for violation of the International Emergency Economic Powers Act and the Iranian Transaction Regulations. We’ve previously posted on this case here, here and here.

Two things are of particular interest about this sentence. First, how did Mr. Galgoul, a Brazilian distributor, wind up in U.S. jail for violation of the U.S. embargo against Iran. An Immigration and Customs Enforcement (“ICE”) press release suggested that Mr. Galgoul was an American living in Rio, so that serves as a pretty solid basis for criminal jurisdiction. Certainly its a much better basis than the oft-asserted basis that the exported product was a U.S.-origin item.

But even if the U.S. courts had jurisdiction over Mr. Galgoul, they have to get their hands on him. The extradition treaty between Brazil doesn’t provide for extradition in the case of violation of U.S. export laws. Furthermore under the dual criminality principal embodies in Article III, even if it did, extradition wouldn’t be possible unless exports to Iran were a violation of Brazilian law, which they are not. Mr. Galgoul was arrested by Immigration and Customs Enforcement, which could only occur on U.S. soil, so obviously he came to the U.S. voluntarily, although the possibility can’t be dismissed that ICE and the FBI said that they just wanted to “talk” to him. I can imagine that he sure wishes he stayed home now.

Second, the DOJ apparently aware that 13 months might seem harsh for selling software to Iran, larded its press release with a whopper:

According to court documents, Galgoul is the director of SUPORTE, a Brazilian consulting engineering firm which acted as an agent for Engineering Dynamics, Inc. (EDI), a Kenner, Louisiana engineering company that designed, produced, marketed, and supported Structural Analytical Computer Software (SACS), an engineering software program intended to assist in the design of offshore oil and gas structures. Due to the product’s sophistication and its potential use, SACS is a controlled product under various United States laws and regulations.

The cite to “various” laws should be the first indication that something is amiss. Computer assisted design (“CAD”) software for offshore oil and gas rigs isn’t controlled under any laws due to its “sophistication and its potential use,” much less “various” laws. The Commerce Control List covers CAD software for the design of semiconductors under ECCN 3D003. Software for the design of nuclear power plants is probably covered under ECCN 0D001. But the CAD software here seems to be EAR99 and only controlled for destinations such as Iran because it is a U.S.-origin product.

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