ExportLawBlog

Archive for the ‘TSRA’ Category

Jul

11

Aspirin and Terrorism in Sudan

Posted by Clif Burns at 5:41 pm on July 11, 2018

Meroe (49) by joepyrek [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/dD4ue9 [cropped] In October 2017, OFAC started down the long and winding road of eliminating the sanctions on Sudan. As we noted in a post then, OFAC — rather oddly — did not just get rid of the Sudanese Sanctions Regulations but simply made effective section 538.540(a) which was a general license to do everything prohibited by the SSR. It also made effective section 538.540(b), which was a general license to export agricultural commodities, medicine and medical devices for one-year after signing a contract for the export of such goods.

Finally, a few days ago on June 29, OFAC took the momentous step of repealing the Sudan Sanctions Regulations in their entirety. Nothing in the Federal Register notice repealing the SSR indicates what had occurred since October 2017 that meant now — as opposed to last October — was a propitious time to repeal the SSR. But, as they say, better late than never.

In addition, the latest Federal Register notice moved the general license in section 538.540(b) for agricultural commodities, medicine and medical devices from the now defunct SSR to section 596.506 of the Terrorism List Governments Sanctions Regulations. This, of course, results in an odd situation where, due to the repeal of the SSR, you can send any and all EAR99 items to Sudan without needing to comply with a general license but aspirin requires you to comply with the terms of a general license.

This is the result of section 906(a)(1) of the Trade Sanctions Reform and Export Enhancement Act of 2000Â (“TSRA”) which says that agricultural commodities, medicine and medical devices could only be exported to state sponsors of terrorism pursuant to a 1-year license. Of course, there is no way that Congress intended to impose more stringent controls on aspirin and tongue depressors than other EAR99 items like shoes (which can be made into bombs) and razor blades. The idea of TSRA was that where the President had comprehensively sanctioned a country, broader humanitarian reason would prohibit him or her from restrictingÂ exports of aspirin, tongue depressors and apples to the country. If the country was a state sponsor of terrorism then a license would be required. But there is no indication that Congress meant for section 906 to apply the license requirement to food and medicine when all other sanctions had been lifted. Not even Congress, well, not even most of Congress could imagine that aspirin is more useful to terrorists than shoes and razor blades.

Permalink

Comments Off

Dec

2

We’re From the USDA and We’re Not Here to Help You (UPDATED)

Posted by Clif Burns at 11:59 pm on December 2, 2015

Category: OFAC • TSRA • USDA

USDA by Dlz28 via https://en.wikipedia.org/wiki/File:United_States_Department_of_Agriculture,_Jamie_L._Whitten_Federal_Building,_Washington_DC_(12_June_2007).JPG [Public Domain] Today’s post, brought to you by the United States Department of Agriculture, is yet another entry into the long and sad cavalcade of administrative incompetence that makes the life of exporters harder than it should be. If you have recently tried to export an “agricultural commodity” under the provisions of the Trade Sanctions Reform and Export Enhancement Act of 2000 (“TSRA”) you may have run into this problem. This would includeÂ trying toÂ export an item relying on the general license in section 560.530 of the Iran Transactions and Sanctions RegulationsÂ which permits export of “agricultural commodities” without a specific license.

The first question is whether the item you want to export, say a container of wood clothes hangers, is an “agricultural commodity.” TSRA covers “agricultural commodities” which the statute definesÂ as follows:

The term “agricultural commodity” has the meaning given the term in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602).”

Cool, that’s helpful. Let’s see how section 5602 the Agricultural Trade Act defines “agricultural commodity.” So, here’s that definition

The term â€œagricultural commodityâ€ means any agricultural commodity, food, feed, fiber, or livestock (including livestock as it is defined in section 1471(2) of this title and insects), and any product thereof.

Awesome: Â anÂ ” ‘agricultural commodity’ means any agricultural commodity.” Your Congress at work. That’s why we pay them their salary and send them to DC to be wined and dined by lobbyists in expensive steakhouses.

Fortunately, OFAC’s TSRA application instructions tells you that you can figure out what is an agricultural commodity by going to www.fas.usda.gov and consulting a “list of agricultural commodities that qualify for export under the TSRA program.”

Now, if you actually believe that and go to the site mentioned looking for the list, no matter how well-honed your search skills are, no matter how strong the Google Force is with you, you will not find that list. It’s nowhere to be found. Of course, you might even remember having seen that list before, and you would be right.

What’s happened here is that some web geek at the USDA convinced the agency that itÂ needed to redesign its website so, I suppose, it looks good on an iPhone or includes the latest CSS geegaw. And in this ridiculous process, no one at the USDA actually tried to figure out whether the new site was actually useful or retained vital information. Nope, looks good, they declared, and headed off to their cars or to MetroÂ to start the long commute home to Virginia.

As a special service to our readers, and brought to you by the magic of the Internet Wayback Machine, here is a linkÂ to that list. We have uploaded the list to our server, so that it will remainÂ available for your reading and licensing pleasure. And, yes, those wooden clothes hangers are agricultural commodities.

UPDATE: Â An alert reader has more of the Google Force with himÂ than I do and managed to locate the elusive agricultural commodities list on the Department of Agriculture’s website. It’s here. Â You’d think that OFAC would say more in its application instructions that the list can be found somewhere on www.fas.usda.gov, but, of course, you’d be wrong.

Permalink

Comments Off

Jul

3

The Man from Del Monte, He Says “Yes!”

Posted by Clif Burns at 12:54 pm on July 3, 2009

Category: Iran Sanctions • OFAC • TSRA

Peaches 'n Flags Last week, the United States Court of Appeals for the D.C. Circuit issued its slip opinion in Del Monte Fresh Produce Company v. United States. The appeals court reversed a lower court ruling that had dismissed a case filed by Del Monte against the Department of Treasury’s Office of Foreign Assets Control (“OFAC”) alleging that OFAC was taking too long to process a license application Del Monte had filed to export agricultural commodities to Iran.

The Trade Sanctions Reform and Export Enhancement Act of 2000 (â€œTSRAâ€), 22 U.S.C. Â§Â§ 7201-7211, authorizes exports of agricultural products, medicine and medical devices to sanctioned countries such as Iran. Section 906 of TSRA provided that the licenses for exports to Iran were to be no more restrictive than license exceptions for agricultural products administered by the Deparment of Commerce. Pursuant to that section, OFAC published an interim rule that followed Commerce’s “nine-day” rule and which provided, in effect that licenses to Iran would be granted if no objections had been received from the State Department within nine days of the referral of the application to State and if the application was otherwise in conformity with OFAC’s rules. In March 2007, OFAC issued a policy statement that it would no longer comply with the 9-day rule.

Del Monte’s application to export agricultural products to Iran was filed with OFAC on August 8, 2007, and referred by OFAC to State on August 17. On September 13, State replied that it had no objection. After the OFAC Help Desk advised Del Monte on November 27 that the application was still pending, Del Monte filed suit the following day, November 28, in federal district court. On November 29, Del Monte filed a motion for preliminary injunction, the court scheduled a status conference and OFAC granted Del Monte’s license, which it appears had been signed on November 23, i.e., before Del Monte had filed suit. Because OFAC had issued the license, the District Court dismissed the complaint and the motion for preliminary injunction as moot.

In the opinion released by the Court of Appeals, the court ruled that the district court had jurisdiction over the otherwise moot claim under the exception for claims “capable of repetition but evading review.” As a result, the decision is instructive more on arcane issues of federal jurisdiction than it is on anything else.

But since the case was remanded for further proceedings before the district court, the district court will now be forced to confront several issues of immense interest to exporters. First, how long does OFAC have to act on a TSRA application under the terms of section 906 of TSRA? Must the agency act within 9 days of referral to State if State raises no objections and the license is otherwise grantable? Or could the agency, by its action in March 2007, defer action on applications for a much longer period? If the District Court reinstates the nine day rule, can OFAC effectively avoid it by waiting for long periods before referring the license application to State?

Permalink

Comments (2)