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Archive for August, 2016

Aug

29

Let No Such Man Be Trusted

Posted by Clif Burns at 8:46 pm on August 29, 2016

Send a Piano to Cuba by Cubanos en UK via Cubanos en UK Facebook Page per http://www.telesurtv.net/english/news/UK-Effort-to-Donate-Piano-to-Cuba-Runs-Afoul-of-US-Blockade-20160822-0008.html [Fair Use] Some Cubans in London wanted to send a piano to Conservatory Amadeo Roldan in Havana. They raised money for this gift by holding a classical music concert and sold tickets for the event through the U.S. company Eventbrite. Things immediately went downhill for that poor piano.

Not surprisingly, Eventbrite confiscated the money from the ticket sales and refused to send it to Cubanos en UK. Daniesky Acosta, the head of that group, tried to tell Eventbrite that, as the group and the concert were in London, the confiscation of the funds was “outside U.S. law.” Except of course Eventbrite isn’t.

So Acosta tried a different tack, citing the E.U. blocking regulation that prohibits people in the E.U. from complying with the U.S. embargo on Cuba. Unfortunately, Eventbrite is in San Francisco and not subject to the directive. Cubanos en UK has sought to enlist the U.K. government on its side, again without much success given the location of Eventbrite.

Cubanos en UK then, oddly, talked to the Attorney General of the State of Iowa:

Cubanos en UK sought legal advice from the â€¦ attorney general of Iowa, Tom Miller, who has years of experience working on OFAC regulations with regards to the Cuba blockade. Miller told the organization that the transaction was legal, but Eventbrite continues to insist that it is in violation of OFAC regulations.

I’m not quite clear why the Attorney General of Iowa is an OFAC expert in the first place, but his alleged claim that the export of the piano to Cuba would be perfectlyÂ legal suggests that he might not in fact have profited much from his “years of experience” working on OFAC’s rules on the Cuba embargo. The closest exemption in the Cuba regulations would be the section which permits humanitarian donations to “projects involving formal or non-formal educational training.” This, without more, might cover the donation of piano to a music conservatory. The problem is the further qualification: the coveredÂ eductation training is limited to

Entrepreneurship and business, civil education, journalism, advocacy and organizing, adult literacy, or vocational skills; community-based grassroots projects; projects suitable to the development of small-scale private enterprise; projects that are related to agricultural and rural development that promote independent activity; microfinancing projects, except for loans, extensions of credit, or other financing prohibited by Â§515.208; and projects to meet basic human needs.

Although “civil education” is somewhat vague, it presumably means the sort of things taught in a civics class, and although you and I might agree that music is a basic human need, I think OFAC means more basic needs like food, water and shelter. So, for as much as I favor sending pianos to Cuba, it seems that a specific license would be needed.

[Title of this post is taken from here.]

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Aug

23

A Decade of Blogging

Posted by Clif Burns at 5:00 pm on August 23, 2016

Category: General

Ten years ago from this past Sunday, on August 21, 2006, I put upÂ the first post on this blog. I had zero readers. I bet no one ever even read that post until, perhaps, today. In fact, according to my server logs, I had a grand total of 53 people come to read the blog in August 2006, and most of them were probably web-crawling robots.

Since then, I’ve put up 1,370 posts. The site has had 3.9 million visits. Each month, an average of 8,000 unique visitors drop by. And for that, I want to thank each and every one of my readers who have made this possible.

That includes the anonymous BIS agent in New Jersey who for several years posted anonymously from his home computer comments reviling me as an uneducated imposter. His chief complaint was that I referred to “BIS ALJs” rather than his preferred, and more eloquent, alternative: “Coast Guard ALJs Who Are Assigned To Hear BIS Cases But Who Are Paid By The Coast Guard Which In Turn Is Reimbursed By BIS For The ALJs’ Time.” I think he may have, in one of his comments, even called for my law school to revoke my degree and, in another, for me to refund all the legal fees that I had collected in my lifetime. He hasn’t been around for quite some time and I rather miss him.

I also want to thank the commenters who caught and pointed out things that I actually got wrong or that I should have mentioned but didn’t. I’ve learned things from them as I hope readers may have learned things from me.

Without question, thanks are also due to Jim Bartlett, who has regularly republished each and every post in The Daily Bugle, even ones where I tried to sneak in naughty words or risquÃ© double entendres that might offend his family audience.

I’ve tried these last ten years to make export law entertaining, which, I suppose, is rather like trying to stage a punk rock version of La BohÃ¨me with a fifth grade cast and a pit orchestra of ukuleles — easier said than done and not something that will appeal to everyone. But once you’ve gone through the effort to rent the house and put a show like that on the stage, there’s no point in cancelling the performance.

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Aug

17

This Post About Kim Kardashian Will Leave You Utterly Speechless

Posted by Clif Burns at 10:19 pm on August 17, 2016

Category: SEC • Syria

Homs Syria by Bo yaser (Own work) [CC BY-SA 3.0], via Wikimedia Commons https://commons.wikimedia.org/wiki/File%3ADestruction_in_Homs_(2).jpg [cropped and processed]

According to this article, the Securities and Exchange Commission is sending out inquiries to certain publicly traded technology companies to ask them whether they are involved in any illegal exports to Syria. Among the subjects of concern by the SEC is a company named Glu Mobile, the perpetrator of a mobile phone game called, and I’m not kidding here, “Kim Kardashian: Hollywood.” This game allows you to “create your own star and customize your look with hundreds of style options â€¦ [and] join Kim Kardashian on a red carpet adventure.” Apparently, civilization as we know it will crumble into dust if people in Syria can play this game on their phones. (Frankly, we’d probably be better off if this game could ONLY be played in Syria, but that’s another issue.)

Glu pointed out to the geniuses at the SEC, who apparently can’t figure out how mobile phones work, that mobile games are sold through the iTunes, Amazon and Android stores and that these stores don’t permit sales to Syria. One can only imagine that the folks at the SEC must have beenÂ under the impression that mobile games were distributed on floppy disks sent through the mails.

Photo Credit: By Bo yaser (Own work) [CC BY-SA 3.0], via Wikimedia Commons [cropped and processed].

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Aug

16

Yes, We Have No Bananas!

Posted by Clif Burns at 5:33 pm on August 16, 2016

Category: Economic Sanctions • OFAC

Bananas by Anthony Easton [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/5NmyCf [cropped and processed]

The problem with many economic sanctions, particularly those aimed at drug lords, is that they wind up hurting the wrong people. Consider the case of the designation of the inaccurately named John Angel Zabaneh by the Office of Foreign Assets Control (“OFAC”) as detailed in this excellent Reuters news story. OFAC put Zabaneh on the SDN List based on its belief that Zabaneh is connected with Joaquin “El Chapo” Guzman, head of Mexico’s Sinaloa drug cartel, although Zabaneh denies this.

Because drug lords do not live by drugs alone, targeted narcotics kingpins in Central America often have other, and sometimes quite significant, legitimate business interests. In this case, Zabaneh was also a banana farmer in Belize and his farms contributed a significant portion of Belize’s banana exports. It should probably come as no surprise that bananas constitute about 20 percent of all of Belize’s exports.

So when OFAC designated Zabaneh, it ultimately resulted in shutting down his banana farms when his customers became unwilling to deal with him. This resulted, according to the Reuters article, inÂ a 13.5 percent plunge in banana exports from Belize and the loss of 900 jobs previously held by workers on the Zabaneh farms.

There is no evidence that this caused Mr. Zabaneh to exit the drug trade, if he ever was in it, or crimped his lifestyle in any fashion. The only effects, it would appear, of the OFAC sanctions was that it allowed the U.S. government to feel good about itself and caused a bunch of people in Belize, with no connection to any drug trade, to wonder where there next meal might be coming from.

Photo Credit: Bananas by Anthony Easton [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/5NmyCf [cropped and processed]. Copyright 20xx Sami Keinanen

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Aug

12

Friday Round-Up

Posted by Clif Burns at 4:28 pm on August 12, 2016

Category: BIS • DDTC • OFAC • SDN List

Here are a few recent odds and ends that are worth a mention (and to catch up on a few things I missed while on vacation):

The Directorate of Defense Trade Controls (“DDTC”) issued guidance as to whichÂ activities are “gunsmithing” that do not require registration under part 122 and whichÂ are “manufacturing” and do require registration. This guidance defines “gunsmithing” and “manufacturing” completely differentlyÂ from the definitions used by the Bureau of Alcohol, Tobacco and Firearms (“ATF”). For example, assembling kits into guns is “manufacturing” according to ATF but not according to DDTC. On behalf of lawyers everywhere: Thanks, DDTC, for keeping us busy!
More revisions to the TAA Guidelines, which are longer and less interesting than all six volumes of Proust, were announced. These mostly take into account the new definitions of export, re-export and retransfer that were recently adopted as an interim final rule by DDTC. I’ve said it before, and I’ll say it again, true export reform would get rid of the ridiculous TAA process entirely and make it similar to the Â process used by the Bureau of Industry and Security (“BIS”) for licensing technology exports.
The United States Marshals Service (“USMS”) is auctioning off 2,719.32669068 bitcoins. You will be, I’m sure, relieved to know that the auction notice explicitly states that the USMS won’t accept any bids from anyone on OFAC’s SDN List. I wouldn’t want Eliot Ness going after Rooster Cogburn, even if it would make a better movie than Batman v. Superman.