“Hillbilly,” a regular reader and commenter here, brought to my attention news reports last week, like this one, that indicated that the Bladerunner 51, a high-speed boat that holds the speed record for circumnavigating Great Britain, is now in the hands of the Iranian Navy. Regular readers may recall a post on this blog in January 2009 about a Temporary Denial Order (“TDO”) issued by the Bureau of Industry and Security (“BIS”) which attempted to block the transfer of the craft by a South African company, Icarus Marine (Pty) Ltd. BIS believed that Icarus was planning to load the Bladerunner 51 onto an Iranian merchant shipping vessel and send it to the Tadbir Sanaat Sharif Technology Development Center in Tehran. Thereafter it was feared that the boat would be transferred to the Iranian Navy, which would try to use the boat as an attack craft.

When I first wrote about the TDO, I expressed some scepticism about its effectiveness. Certainly the two Iranian entities named in the order would simply ignore it, and there was no obvious reason that the South African party would obey it. Now, however, it appears that the TDO had another purpose, at least according to this article in the Washington Post:

The U.S. Commerce Department’s Bureau of Industry and Security asked South African authorities to block the transfer. It voiced concern that Iran’s Revolutionary Guards intended to use the boat as a “fast attack craft.” The bureau noted that similar vessels had been armed with “torpedoes, rocket launchers and anti-ship missiles.”

Nonetheless, the loading went ahead because, according to one source, no one saw the U.S. notice sent by fax on a weekend.

So, if this report is to be believed, the TDO was designed not as much to deter Icarus but to prompt the South African government to take action and prevent the loading of the Bladerunner 51 onto the Iranian merchant vessel. That plan failed because BIS sent the TDO on a weekend, when the South African government was, not surprisingly, closed.

Another interesting factoid is that the U.S. also had a plan for special forces to intercept the Iranian merchant vessel carrying the Bladerunner 51. That plan was called off, no doubt because of the concern that the Bladerunner, as then configured, was not subject to the arms embargo set forth in paragraph 5 of U.N. Security Council Resolution 1747.

Aqua Loop Cooling Towers, a California-based supplier of cooling equipment to power plants, recently agreed to a ten-year denial order and a $100,000 fine to settle charges by the Bureau of Industry and Security (“BIS”) arising out of charges of illegal exports of, and a conspiracy to export, EAR99 goods to Iran. The items involved were filament winding machines and rolls of hog hair filter media. (For those perplexed about exports of hog products to a Muslim country, hog hair filters are not made from hog hair, at least they aren’t anymore.)

More interesting than the charges themselves and the agreed settlement is the unusual amount of detail that BIS put into the charging letter and the associated documents. Typically a charging letter says, for each count, that on A date B company violated C rule by exporting item D, classified as ECCN 0X000, to country Y. Each count rarely exceeds a short paragraph. In this instance, the Charging Letter, while many pages short of the length of, say, Marcel Proust’s À la recherche du temps perdu, is quite detailed and, certainly, a step in the right direction. Greater detail in charging letters provides more notice to the export community as to how BIS interprets its own regulations.

The charging letter tells a story of a contact made by Parto Abgardan, a Tehran-based manufacturer of cooling towers, with Aqua Loop to procure items for shipment to Tehran. The president of Aqua Loop replied that he was “more than happy if I can be of assistance on your purchase of filament winding machines.” Upon contacting a distributor of those items, the Aqua Loop president reported back:

I should emphasize that I found this lady a bit reluctant on the subject of export the unit [sic] to Iran, but she sound [sic] OK to work with us, if we do not mention any thing [sic] about Iran.

Later Aqua Loop’s president reported that the only way he could get the items to Iran was through a Gulf state:

I am trying to find a way to send the components that I promised to you. Unfortunately after many unsuccesssful [sic]attempts, I came to a conclusion that the only was to open this channel is what you were thinking, and if I understood correctly, you are going to have some kind of agent or office in one of the Gulf countries. I tell you this that I would have no problem getting a container to my place and loading to a steam ship toward Dubai. . . . Many shipping companies express that you shouldn’t have any major problem getting the goods to Tehran from Dubai

Finally, the charging letter notes that Aqua Loop’s president had told a BIS special agent that he was aware that it was illegal to ship goods to Iran through third countries, noting that the practice was called “diversion.” Not surprisingly, the Aqua Loop president agreed individually to a ten-year denial order and a $100,000 penalty suspended for ten years provided that no export violations were committed by him during that period.

If you clicked on the link earlier in this post to Parto Abgardan’s website (which appears only to work in Internet Explorer and not to work in either Firefox or Chrome), you may have noticed something interesting. Abgardan claims to have a “sister factory in the USA.” Here’s a screen grab (with highlighting added by me) showing that claim.

And on its website Abgardan gives as its U.S contact information the same address, telephone number and fax number as shown on Aqua Loop’s contact page. Here’s another screen grab if your browser doesn’t like Abgardan’s website:

I would have thought they would have changed that by now.