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Archive for the ‘Iran Sanctions’ Category

May

17

Traveling to the United States Can Be Dangerous

Posted by Clif Burns at 6:15 pm on May 17, 2012

ABOVE: Ulrich Davis Mugshot

On May 15, Ulrich Davis, a citizen and resident of the Netherlands, was sentenced to six months in prison and a $2,000 fine. He was charged with violating a Temporary Denial Order issued by the Bureau of Industry and Security (“BIS”).

The TDO in question was issued on October 1, 2007, against Aviation Services International, B.V., in the Netherlands, as well as affiliated and related individuals and entities in the Netherlands. Cyprus, and the UAE, and arose out of allegations that the parties subject to the TDO had shipped U.S. origin items to Iran. According to the Criminal Information, which served as the basis for Davis’s plea, Davis provided freight forwarding services involved in the export of acrylic adhesives and spray-paint coatings” from a company in the United States to an unspecified company listed on the TDO. All actions charged in the Criminal Information were undertaken by Davis entirely within the Netherlands and outside the United States.

The reason that Davis wound up being hauled in front of a U.S. federal district court and charged with violating U.S. criminal laws is that he traveled to the United States and was arrested at Newark Liberty Airport on his way back to the Netherlands from the United States. The U.S. takes the position that it has criminal jurisdiction over all persons, regardless of location and citizenship, for crimes arising out of their dealings with U.S. origin goods. This is not a position recognized by many other foreign countries, meaning that it would be unlikely that Davis could have been extradited from the Netherlands based on the actions alleged in this case, which all took place in the Netherlands and which did not violate Dutch law. But once he was in the United States — and voluntarily at that — whether he was extraditable under Dutch law was, at best, a moot point.

Moral of the story: if you live outside the United States and sell U.S. goods to Iran, postpone indefinitely any plans to visit Disneyland. (There is no indication of why Davis was in the United States. The reference to Disneyland is for illustrative purposes only.)

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Apr

25

Lab Equipment Companies Added to Entity List

Posted by Clif Burns at 7:30 pm on April 25, 2012

Medical Lab Last week the Bureau of Industry and Security (“BIS”) added three parties to the Entity List and imposed license requirements for exports, re-exports and in country transfers to these parties for all items subject to the Export Administration Regulations, i.e., items exported from the United States or with certain percentages of U.S. content. The order adding the parties to the Entity List indicated that there would be a presumption of denial for all license applications involving the three parties.

As is typically the case, BIS provides only scant detail about what got these three parties into hot water beyond saying that they had been involved in the transhipment of items to Iran and Syria. Looking at the identity of the parties allows one to make some more reasonable assumptions about what was going on. One of the designated entities was Canada Lab Instruments in MontrÃ©al, which describes itself in a business directory as “supplying a wide range of environmental, laboratory, measuring and analytical instruments for researching and educational purposes from the most famous manufacturers.” The second entity, Abou Elkhir Al Joundi, is an individual who owns Canada Lab Instruments and was educated in Damascus, Syria. The third entity was “Masound [sic] Est. for Medical and Scientific Supplies” in Amman, Jordan, which describes itself in a business directory as involved in the distribution of medical and scientific laboratory equipment.

It seems, therefore, reasonable to assume that the three entities were put on the Entity List in connection with shipment of medical and lab equipment from Canada and through Jordan to Syria and Iran. The quantity and value of the shipments, however, cannot be determined and the BIS order gives no indication. This also does not seem to involve items of particular concern to the interests of the United States in Iran and Syria, particular since the medical equipment probably would have been eligible for licenses. But I guess if we are chasing folks for selling nail polish to Iran, everything is fair game.

As a side issue, if BIS wants to put people in jail for future unlicensed exports to the Jordan company, it at least ought to spell the name of the company correctly on the list establishing this license requirement. It’s “Masoud,” not “Masound.”

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Apr

18

Updates on Bird Flu and Nail Polish

Posted by Clif Burns at 5:35 pm on April 18, 2012

Category: Deemed Exports • Iran Sanctions • OFAC

ABOVE: H5N1 virus

Civil disobedience and export laws: those are two concepts not often linked together. But it appears that a Dutch researcher on the H5N1 avian virus is planning to tell Dutch authorities to take a hike and will submit his research to a U.S. journal even though the Dutch government has declared that the research is export-controlled.

This issue was discussed in an earlier post on this blog that discussed how decisions by U.S. researchers to restrict dissemination of some research on the bird flu virus might disqualify the research from the fundamental research exception and make it difficult to share the research with colleagues in other countries. Those restrictions were ultimately removed and the research is not considered export controlled in the United States. Dutch authorities have relied on those initial restrictions to declare the research controlled and have told the researcher that he could not submit the research to foreign journals for publication.

Now Fouchier [the Dutch researcher] says that he is prepared to defy the government and submit the work anyway, an action that could cost him up to 6 years in prison or a $102,000 fine. â€¦

â€œWe simply will never apply for an export permit on a scientific manuscript for publication in a journal. We do not want to create a precedent here,â€ he told Nature. â€œWe might end up in court indeed if they insist on censorship.â€

As an unrelated update, this blog yesterday posted on the $450,000 fine levied on Essie Cosmetics for exports of nail polish to Iran. Several readers have emailed me to suggest that the high fine was based not on the strategic implications of nail polish exports but on, shall we say, an uncooperative attitude by Essie in dealing with OFAC. That’s not hard to believe because, notwithstanding Essie’s expensive dust-up with OFAC, the cosmetic company’s website still has Iran in the drop-down list of countries in forms on its website.

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Apr

17

OFAC Strikes Another Blow Against Iran’s Nuclear Ambitions

Posted by Clif Burns at 6:51 pm on April 17, 2012

Category: Iran Sanctions • OFAC

Happy 25! In the last release of civil penalty information, the Office of Foreign Assets Control (“OFAC”) announced that it whacked Essie Cosmetics Ltd. with a whopping $450,000 fine for exports the company made to Iran in violation of the U.S. embargo on Iran. So what did Essie export to merit such an enormous fine? Uranium enrichment centrifuges? Missile guidance systems? No. Nail polish. Yes, you read that correctly: nail polish

The apparent violations relate to Essie and Individualâ€™s knowing sale and export of nail care products on or about September 17, 2009, December 8, 2009 and February 23, 2010, to an Iranian distributor pursuant to an Exclusive Distributorship Agreement in apparent violation of Â§ 560.204 of the ITR.

Well, it must have been boatloads of nail polish, right? No.

The total transaction value for the three transactions settled with OFAC was $33,299.

I guess the thinking was that it is pretty hard to enrich uranium, build nuclear weapons, threaten our allies, and engage in general terrorist activities if you aren’t wearing nail polish. I don’t know about you, but I’ll sleep better tonight knowing that a few people with unpolished nails are sitting at home rather than working on nuclear bombs.

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Apr

10

Iran Fights Back (Or Not?)

Posted by Clif Burns at 6:30 pm on April 10, 2012

Category: Iran Sanctions • OFAC

The Internet in Iran This blog reported on March 29 that OFAC had provided guidance on various technologies eligible for export to Iran as incidental to the exchange of personal communication over the Internet. Most significantly, OFAC indicated a willingness to permit certain fee-based services, such as Skype and Google Voice, to Iranians under this exception. I had suggested that given comprehensive sanctions on major Iranian banks, ordinary Iranian citizens would be hard-pressed to actually pay for these services even if licensed.

Now it appears that Iran might even more effectively prohibit U.S. exports of services and software incidental to personal communications over the Internet. According to this story in Ars Technica, the Iranian government is planning to create a national intranet and cut off access to the Internet for ordinary citizens in Iran, possibly as early as October 2012. The source for this story is a report by Reporters Without Borders entitled Enemies of the Internet

After a number of other outlets picked up the story, Iran is now claiming, somewhat bizarrely, that the story of shutting down the Internet in Iran is an April Fool’s day hoax. Seriously, I guess the mullahs sat around and decided it would be hilarious to tell a whopper about the Internet on April Fool’s day. I think the only April Fool is anyone who actually believes the story that the report was an April Fool’s day joke. Iran’s history of pervasive Internet censorship is well detailed in the Reporters Without Borders report, so the idea of a “clean” national intranet in Iran to replace the real Internet hardly strains credibility.

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Archive for the ‘Iran Sanctions’ Category

Traveling to the United States Can Be Dangerous

Lab Equipment Companies Added to Entity List

Updates on Bird Flu and Nail Polish

OFAC Strikes Another Blow Against Iran’s Nuclear Ambitions

Iran Fights Back (Or Not?)

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