Aug

5

In Cyberspace You Could Be Anywhere

Posted by at 7:52 pm on August 5, 2008
Category: Iran Sanctions

Lost in CyberspaceApplication of country-based sanctions in cyberspace may pose some interesting problems and pitfalls as two cases recently reported by the Office of Foreign Assets Control illustrate:

One individual has agreed to a settlement totaling $840 for alleged violation of the prohibitions in the Iranian Transactions Regulations: OFAC alleged that in August 2006, the individual attempted to transfer funds to Me-Gold Kish, Co. in Iran in an apparent attempt to purchase electronic gold without an OFAC license. The individual did not voluntarily disclose this matter to OFAC.

…

One individual has agreed to a settlement totaling $400 for alleged violation of the prohibitions in the Iranian Transactions Regulations: OFAC alleged that in June 2006, the individual attempted to purchase electronic gold from Me-Gold Kish Co. in Iran in apparent violation of §§ 560.201, 560.203 and 560.204 of the Iranian Transactions Regulations. The individual did not voluntarily disclose this matter to OFAC.

Although it is possible that the two individuals here knew that they were dealing with a business located in Iran, it is also quite possible that they did not. Me-Gold is an on-line e-currency exchange business. Its current website claims that it is incorporated in Singapore. A company affiliate site states that Me-Gold has offices in Internet City, Dubai. Apparently, however, an earlier version of Me-Gold’s website stated that the company was located on Kish Island, Iran, although there’s no evidence that the fined individuals read that part of the website.

Even though the references to Iran have been scrubbed from Me-Gold’s site, this is a business that the owners could run from their computers in Iran using banks in, and a fake address in, Dubai. If a U.S. citizen does business with the company, he or she will be violating the Iran sanctions without having the faintest idea that, on the other side of his computer screen, are a bunch of people in Iran.

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Copyright © 2008 Clif Burns. All Rights Reserved.
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One Comment:

I like Me-Gold. Mr. Soleiman provides a GREAT service and it’s top rated. I’d use them today if needed in fact I recommended them just yesterday to a friend. I’m not 100% sure where the operators sit as they type on their PC, however they currently seem operated out of Dubai not Iran. At least the US money transfers go through Dubai.
Some time back they were on Kish Island because we called them occasionally. I thought they moved to Dubai when e-gold closed all the Iranian accounts in Nov. 2006 http://www.digitalmoneyworld.com/e-gold-closes-all-iranian-accounts/ but their web reflects the Kish Island address as late as Feb.-March 2007. I’m not 100% sure when the business addy changed. All direct Western Union transfers are out of Dubai and they have offices there. Plus, this is a very international industry of customer, I doubt that a lot of their business is with the US anyway.
This is a great post you have put up. That is amazing two US customers were caught and fined as your blog states. However, I’m not shocked, I’ve called them on Kish Island from the US not thinking twice about it. In today’s world, this is an Internet business and as far as customers are concerned, Me-gold IS right next door.
I think that most Net businesses, like e-gold, just ban the country IPs so no one from there can log in…(without a proxy).
Mark Herpel
[email protected]

Comment by Mark Herpel on August 5th, 2008 @ 9:30 pm