Dec
24
NYT Assails Export of Cupcake Sprinkles to Iran
Posted by Clif Burns at 6:12 am on December 24, 2010
Category: Iran Sanctions
At last, on Christmas Eve, a federal holiday, the New York Times finally releases its analysis of documents it received from the Office of Foreign Assets Control (“OFAC”) as a result of its Freedom of Information Act request relating to licenses granted for exports to sanctioned countries such as Iran. The result? The reporters throw themselves on the fainting couch because a company has exported cupcake sprinkles to Iran, presumably on the notion that this will enrich the Iranian government and aid its nuclear program. I suspect that this conclusion may have prompted the Times editors to publish the story on a federal holiday when five people besides myself will be reading the newspaper. It keeps the laughter down.
The principal problem with Jo Becker’s story is her complete misunderstanding of the Trade Sanctions Reform and Export Enhancement Act of 2000 (“TSRA”), legislation which permits a wide variety of exports to sanctioned countries. She seems to believe that the act restricts such exports to humanitarian aid and then uses that misconception to criticize OFAC for licensing the aforementioned cake sprinkles as well as — and this is not a joke — popcorn, hot sauce, chewing gum, cigarettes, food coloring and sugar.
The problem is that TSRA isn’t restricted to humanitarian aid. It permits the exports of agricultural commodities, medicine and medical devices without reference to whether the New York Times or Ms. Becker thinks the product is humanitarian aid. All of the aforementioned products seem to fit clearly within the definition of agricultural commodities. Even if food coloring might not, does Red Dye No. 2 have some role in uranium enrichment which nuclear scientists have so far missed?
I’ll be writing more about the article over the coming days. I still have Christmas shopping to finish. But two other things deserve immediate comment.
First, the article is oddly silent about the large volume of licensed exports to Cuba under TSRA. This, at a very minimum, suggests an odd ideological bent by Ms. Becker. The article argues that food sales to Iran indirectly benefit the government of Iran, an argument that has traditionally also been made to support the Cuba blockade. The new foreign policy adopted by the Times would appear to be “Castro good, mullahs bad.”
Second, a note at the end of the article states, without any apparent realization of the hypocrisy involved, that “Ron Nixon contributed reporting from Washington, and William Yong from Tehran.” Unless Mr. Yong works for free, lives under a bridge in Tehran, and subsists solely on air, the New York Times is doing business in Iran at the same time it is whipping up a tsunami of outrage about other companies doing business there.
There is, however, one good side to the Times reporting. As part of the article, the Times includes a detailed summary of a number of the licenses granted and the reason they were granted. This information, which has heretofore been zealously guarded by OFAC, which prefers to operate under cover of darkness, will be of immense use to export compliance officers and lawyers because they reveal a number of broader rationales that the agency has used to grant non-TSRA licenses.
FULL DISCLOSURE: Both my law firm and I have represented companies named in the story and have obtained licenses permitting those companies to export items to Iran under TSRA.
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Copyright © 2010 Clif Burns. All Rights Reserved.
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9 Comments:
Well said. The NY Times article was one of the most absurd things I have ever read in my life, but it couldn’t hold a candle to the HuffingtonPost headline, which I quote verbatim below:
GOODS FOR EVIL
Despite Ban, U.S. Approved Chewing Gum, Cigarette, Hot Sauce Sales To Iran
Underneath this headline was a picture of dozens of pieces of multicolored previously chewed chewing gum. A piece of white (again, chewed) chewing gum was fashioned in the shape of a skull and cross bones!
Amen, Brother Burns. However, even worse than the Times’ misrepresentation of the licenses granted is their utter failure to address the licenses rejected, declined, or just plain delayed until moot. Review of the Times lists of licenses granted proves to me beyond a reasonable doubt that OFAC does not treat all applicants equally, i.e., OFAC in general and certain licensing officers in particular play favorites.
OFAC needs complete transparency into its rulemaking and licensing activities. The false assertion that OFAC is exempt from the Administrative Procedures Act is just a smokescreen to shield OFAC from any sort of scrutiny or accountability.
The sprinkles are obviously part of our long-term Iran containment strategy, getting citizens there to pork out, become diabetic, and drive up healthcare costs.
Thank you, Clif!
Thank you for your thoughts! Also, love the title of your post.
Great article Clif and very on point. I wanted to comment earlier, but I was busy picking my jaw up off the ground after reading the NYT article last week.
I think another point being missed entirely by Ms. Becker is the legacy that sanctions will leave behind. Iranians have a strong cultural identity and a long memory. Many Iranians, living either in Iran or abroad, still remember and are upset about the CIA coup of Prime Minister Mohammed Mossadegh in the 1950s. Even if the Islamic Republic fell tomorrow and the sanctions were removed, surely, Iranians will remember suffering under the weight of U.S. economic sanctions for the last 15 some years. How that will play into the stance towards the U.S. of any future government there could be problematic; even more so if OFAC had not been licensing exports of things such as agricultural commodities, medicine and medical devices. To say that electing to authorize exports of such articles is the result of choosing business interests over foreign policy considerations is absurd.
Well done as usual Clif. Happy new year.
Wow, the NYT must be running out of steam as a Lefty house organ if they’re making hay out of TSRA…. Where’s the news here? LOL
“Unless Mr. Yong works for free, lives under a bridge in Tehran, and subsists solely on air, the New York Times is doing business in Iran.”
I would assume that the Times (like most mainstream media) gets work and/or journalist visas (from host countries) and licenses from the US for its *staff* reporters, or believes them to be covered by general licenses.
The huge problem is for freelance journalists, for whom licenses and journalist or “work” visas are often unavailable, or available only with prohibitive inconvenience, delay, and/or expense.
Virtually all *travel* writing, including guidebooks and freelance articles in print and online, is done by people who travel on tourist visas that don’t technically permit
“work” in the host country.
Growing numbers of freelancers in other fields live (often on non-employment visas) in other low-cost-of-living countries, while doing work remotely for clients in high-wage countries. A programmer living in Buenos Aires with clients in the USA paying at the low end of US hourly rates for coding can afford to buy a penthouse for cash after a few months, or can afford to work only a few hours a week.
Payment is typically to a bank account in the US.
The question is whether someone who receives no income from entities in the country, but whose labor is carried out while physically in the country, is violating that country’s labor or visa rules.
The answer, of course, varies by country. Surprisingly, there is no available guide to the rules by country.
In practice, most countries don’t care: Such a person isn’t competing with locals in the local labor market, and is bringing in and spending money. But it provides an excuse to expel such a person if they offend the local government in any other way.
Edward, although your point is well taken, I was making a somewhat different one. The NYT decries all business in Iran, and yet it is paying someone who is spending money in Iran and, worse yet, they might even be reimbursing him for some of his expenses. Whether that work is properly licensed is irrelevant given that the whole point of the NYT article is to decry properly licensed and legal transactions.
