Jan
23
Two Louisiana Men Indicted for Software Exports to Iran
Posted by Clif Burns at 10:12 pm on January 23, 2008
Category: Criminal Penalties • Iran Sanctions
According to an Associated Press wire story, two Louisiana men were indicted on charges that they illegally attempted to export structural design software to Iran without a license from the Office of Foreign Assets Control (“OFAC”). The two men own Engineering Dynamics, Inc., a Kenner, Louisiana, company that sells worldwide a software package knows as SACS (“Structural Analysis Computer System”). The software, although apparently aimed at the oil and gas industry, can also be used by designers and engineers for a wide variety of structures outside of oil and gas drilling platforms.
Although I don’t have a copy of the indictment yet, the AP story attributes an interesting assertion to the document:
The software is a controlled product under various U.S. laws and regulations because of its sophistication and its potential use, the documents said.
Say what? Anybody want to venture a guess at the ECCN of this software? It’s simply CAD software. If it could be used to design semiconductors it would be covered under ECCN 3D003, but otherwise generic CAD software isn’t controlled. It’s not clear why this assertion is even in the charging documents, since the defendants are only charged with exporting to Iran without an OFAC license. And in that case it doesn’t matter whether they were attempting to export sophisticated software or a pile of bricks. The crime was committed because the software was going to Iran, not because it was “sophisticated” or had a particular “potential use.”
It would appear that the U.S. Attorneys Office involved either doesn’t understand what items are subject to export controls or the office is simply trying to lard the indictment with irrelevant and prejudicial material. It’s not clear which is worse. Of course, since I haven’t seen the indictment and am relying only on a reporter’s account of the indictment, it’s impossible to be sure that the indictment alleged that the software was controlled. Once I get a copy of the indictment, I’ll update this post.
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4 Comments:
I suspect they’re trying to lard the indictment in order to make it seem that Iran was trying to obtain the software to build nuclear-related things. Vague, open-ended references to the software’s “potential uses” is clearly an invitation to speculate about — what else? — Iranian nukes. Thus it has more to do with indicting Iran than the particular defendants. In short, its political.
This is typical misrepresentation by OFAC and DoJ: When they indict people for exporting EAR99 products to Iran, and they have indicted a lot of poor folks for doing that, they always seed their press releases with misleading statements regarding keeping dual-use or advanced technology out of the hands of proliferators, when in fact the goods were of no strategic interest and the only dual use involved was the use of the indictment for the dual purpose of plumping up the OFAC numbers and spinning the US Attorney’s record for the next political job
This DoJ routinely lies to courts and grand juries, for example telling courts and grand juries that there has been a continuous embargo against Iran since the Hostage Crisis of 1979 when in fact the embargo that was proclaimed in1979 was rescinded in 1981 pursuant to the Algier Accords. Such lies by this DoJ to courts has a dual use: First, by fraudulently asserting that there has been an embargo since 1979, this DoJ purposely misleads judges and grand jurors into believing that any reasonable business person would know that trading with Iran was illegal (a necessary requisite of a criminal IEEPA violation), when in fact there has only been a total embargo since 1996 and there have been various waivers and exceptions since then that laymen may well be uninformed. Second, it reminds jurors of the Hostage Crisis – which had nothing to do with the present embargo – and inflames them against anyone who might do business with Iran. Its just sleazy, like everything to do with the Bush Administration or OFAC in general.
To be fair – DOJ is a separate entity from OFAC and there is no requirement that the AUSA consult with OFAC in drafting the indictment (it’s a little nutty to say that OFAC and DoJ conspire!). Further, IEEPA penalties are pretty potent these days so there is no need to “lie” about the length of the embargo or draw unsubstantiated links to nukes. An export to Iran is a violation unless it’s otherwise authorized – if it’s civil, OFAC can take of it — if it rises to a criminal violation, DoJ gets to go after it. Interested to see the indictment —
The US Attorney’s manual requires US Attorneys to obtain the permission of main Justice before bringing any indictment for violation of any export control statute, and main justice always consults with the jurisdictional agency. While there have been cases where the US Attorney’s office has ignored this requirement, e.g., a recent case in Phoenix where knuckledraggers at the FBI were the principal investigators, its unusual
