A review of federal court dockets throughout the United States highlights a general trend – the U.S. Department of Justice is bringing forth numerous criminal cases against individuals and entities which have traded with Iran in vioation of the US embargo against that country. Here are a few pending cases:
US v. Tehrani. This is an indictment from the Eastern District of Wisconsin. Mostafa Saberi Tehrani was indicted for violations of 18 USC §371 (Conspiracy to Commit Offense or to Defraud United States), 50 USC §§ 1702 and 1705 (part of the International Emergency Economic Powers Act, known more commonly as IEEPA) and 31 CFR §§ 560.203 and 560.204 (part of the Iranian Transactions and Sanctions Act or ITSR, which is implemented under IEEPA authority). The facts behind this case are not clear, but it is clear that the charges are violation of US sanctions laws.
US v. Sarvestani. This case is out of the Southern District of New York. Seyed Amin Ghorashi Sarvestani and his companies have been charged with exporting sensitive satellite-related equipment to Iran over the span of 7 years.
US v. Saboonchi. Ali Saboonchi and Arash Rashti Mohammad were indicted in the Southern District of Maryland last month for, again, conspiracy to violate the IEEPA. This case, like others, involves the use of exportation of goods to the United Arab Emirates (UAE) as a transit point for reexport to Iran. Examples of the goods in this case are as cyclone separators (used in oil refining processes) and thermocouples (used to measure oil and gas temperatures). Rashti Mohammad was based in the UAE and the two conspired to create Saboonchi’s company, Ace Electric Company to sell the prohibited goods through the UAE to buyers in Iran.
The list really goes on. What is interesting is that these cases dovetail a story last summer involving an Iranian-American lady who, along with her tourist uncle was denied the sale of an Apple iPad allegedly due to their speaking Persian (see this article on the BBC website fom last June, where I was quoted) . The theory posited for the Apple employee’s decision was that it would be a violation of export control laws if Apple knowingly sold the device to somebody who the company had reason to know would take the product to Iran. Export controls apply to many products that have so-called “dual use,” in other words both civilian and military use. These can include computers, certain industrial parts, etc.
The above cases highlight two key themes – first, obviously that the Department of Justice is pursuing trade violation cases, particularly with sensitive goods. Also, it highlights something those in the compliance industry have known for a long time – the illegality of the use of third countries as reexport points. Dubai in particular has been a focus of US authorities as it is considered a reexport point to many sensitive jurisdictions, Iran among them. Sending goods to a third country does not legitimize an illegal export. It is sufficient that one merely have reason to know that the goods will be exported to the prohibited destination.