ExportLawBlog

Jun

13

Syria Sanctions Loosened To Benefit Rebels and Civilian Population

Posted by Clif Burns at 9:04 pm on June 13, 2013

By Bo yaser (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons http://commons.wikimedia.org/wiki/File%3ADestruction_in_Homs_(4).jpg

ABOVE: Destruction in Homs, Syria

Just as the Assad government appears to be gaining ground back from the rebels, the White House announced certain measures loosening the sanctions on Syria. Yesterday, BIS issued a notice on its websiteÂ that it would begin processing licenses for exports of certain goods related to reconstruction of infrastructure in areas held by the rebels. Specifically, the agency indicated that license applications would be accepted for commodities, technology and software related to

water supply and sanitation, agricultural production and food processing, power generation, oil and gas production, construction and engineering, transportation, and educational infrastructure. . . .

BIS promised that implementing regulations “shortly” but indicated that applications could be filed “immediately.”

Similarly, OFAC released a Statement of Policy permitting the export of a somewhat narrower group of services. The Statement of Policy indicates that OFAC will consider on a case-by-case basis applications to permit services in the Syrian telecommunication industry to enable private persons to better access the Internet and in the agricultural sector. Certain petroleum transactions benefiting the rebel forces may also be authorized. Finally, OFAC revised Syria General License 11 and replaced it with General License 11A authorizing NGOs to engage in certain activities designed to preserve the cultural heritage of Syria including museums, historic buildings and archaeological sites.

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Copyright © 2013 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Jun

12

Section 219 Iran Notices: Down the “Affiliate” Slippery Slope

Posted by Clif Burns at 9:33 pm on June 12, 2013

Category: General

Source: Google Maps http://goo.gl/maps/GqKvy

ABOVE: Carlyle Group DC HQ

A major headache in complying with the notice requirement in section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 has been determining the scope of the statutory requirement for publicly traded companies to file notices with the SEC of their own activities, and those of their “affiliates,” with Iran. Unfortunately, the law does not provide a definition of “affiliate” making it difficult for companies to be certain of the required scope of the disclosure.

A disclosure (subscription required) last Friday by HD Supply Inc. illustrates how broadly the affiliate net may reach. In that disclosure filed with the SEC the company disclosed the presumably legal dealings in Iran of a Spanish company in which one of HD’s investors had invested. Specifically, the notice disclosed some services provided by Applus+ to Iran’s Industrial Development and Renovation Organization (“IRDO”), an Iranian government agency. One of Applus’s investors, the Carlyle Group, was also an investor in HD Supply.

So at this point, what are the limits on what constitutes an “affiliate”? If another investor in Applus+ had an investment in a company that had an investment in a company doing business in Iran, would that need to be disclosed as well? Your guess is as good as mine.

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Copyright © 2013 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Jun

6

Export Control Reform Roundtable in Boulder

Posted by Clif Burns at 12:46 pm on June 6, 2013

Category: Export Reform

By Brylie Oxley (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons http://commons.wikimedia.org/wiki/File%3ABoulder_Colorado_-_Perl_Street_Mall_-2005-10-14T205944.png Next Tuesday, June 11, I’ll be in Boulder leading a round-table discussion on export control reform. And the best part: it’s free. So, if you’re in the area, please feel free to come and join in.

The format for the discussion will be pretty open, so if people who are attending want to talk about other export issues or have other questions, we can talk about that too.

Details on time, location and how to RSVP are here.

I hope to see you there.

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Copyright © 2013 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Jun

4

Nice Work If You Can Get It

Posted by Clif Burns at 8:26 pm on June 4, 2013

Category: BIS • Criminal Penalties

Toray Carbon Fiber http://brooknewmaterial.com/english/proshow.asp?articleid=609 [Fair Use] Lisong Ma, a Chinese national, pleaded guilty last week to charges that he attempted to export carbon fiber from the United States without a license. Carbon fiber meeting certain technical qualifications is classified as ECCN 1C010 and would require a license from the Bureau of Industry and Security (“BIS”) before it could be exported to China. Reading the DOJ press release announcing the plea suggests that the defendant was either incredibly stupid or that something else was going on.

According to the DOJ account, the defendant contacted an undercover agent online and inquired into the purchase of a large amount of Toray T800 carbon fiber. What is strange is that the defendant actually came to the United States to close the deal. And, of course, the rest is history.

But what make this strange is that the Toray carbon fiber is made in Japan and appears to be readily available in China. Either the defendant was just dumber than the carbon fiber he was trying to buy or, possibly, the agents proposed an incredibly attractive price to lure him into the United States. Admittedly the failure to recognize a price “too good to be true,” if that is what happened here, is probably also a form of stupidity

As is typical with press releases of this kind, the government agencies involved spare no effort to pat themselves on the back for nabbing this dangerous criminal through “covert cyber operations.” Although “covert cyber operations” sounds intriguing, what it means, ultimately, is having a bunch of federal agents surf the net and hang out at alibaba.com looking for exporters to nab by dangling sweet deals in front of them. As they say (or sing sometimes): nice work if you can get it.

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Jun

2

iOFAC iOkays iPhones for iRan

Posted by Clif Burns at 9:03 am on June 2, 2013

Category: Iran Sanctions • OFAC

iRanPhone www.apple.com [Fair Use] Not long ago, I posted on an announcement by Samsung that it was closing its app store for Iranian customers. I speculated thatÂ Â paid apps wereÂ at least part of the problemÂ because they were not covered by the 2010 OFAC general license permitting export of “services and software incident to the exchange of personal communications over the Internet.”

Well, that problem has just gone away. On Friday, OFAC issued General License D which expands the aforementioned general license to cover both fee-based services and software. Â It covers personal communications hardware as well, specifically mentioning, not surprisingly, “smartphones.”

That is all well and good, and certainly looks good on paper, but don’t imagine that the folks at Apple are giving each other the iFives over the prospect of selling iPhones in Iran. Nothing in General License D gets over the slight problem of how anyone actually gets paid for goods and services exported to Iran no matter how permissible those exports might be. U.S. banks cannot deal directly with Iranian banks and foreign banks, scared of potential sanctions under CISADA, increasingly refuse to deal with Iranian banks.

But if anyone wants to give away smartphones in Iran, have at it.

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