OFAC Loosens Restrictions on Computing and Telecom-Related Exports to Iran

Posted on May 30, 2013 by Farhad Alavi — Leave a comment

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) today made a sweeping change to laws governing the exportation by US persons (as defined in the Iranian Transactions and Sanctions Regulations or ITSR) of certain computer, telecommunications, and internet technologies to Iran. From the perspective of average individuals and retail businesses in both countries this is perhaps one of the most important changes to the sanctions regime against Iran in recent years.

General License D now allows the export by US persons or from the US of many software and hardware products to Iran. These include certain:

1. Laptops and tablets
2. Internet connectivity devices (e.g., for WiFi, etc)
3. Personal communications software
4. Personal internet-related services

There are certain limitations and this is clearly not a blanket general license for all tech exports to Iran (note for example that these exports must generally be related to personal communications). Notably, the limitations are very critical and must be fully understood before exporting any of the now authorized goods and services.

This development is arguably very significant for three reasons.

First, it creates a new avenue of trade with Iran. While such technologies are reportedly available in Iran, legal trade from the US can help widen their availability due to greater supply and lower cost.

Second, the new General License can have noticeable effects on the flow of information and the spread of broadband internet in Iran. This can impact political and societal issues as well.

Third, General License D may effectively end part of the de-facto struggle of US governmental entities (including federal prosecutors) against entities (in the US, Iran and third country reexport points like Dubai) who had been violating US laws by sending goods like these to Iran (notably many companies in places like the UAE have been subject to enforcement measures for violating US laws and individuals have faced prosecution on this front). This has been a substantial part of International Emergency Economic Powers Act (IEEPA) enforcement.

This development is notable and will surely be noticed beyond the US and Iran. As detailed above, General License D is not a blanket general license and is wrought with limitations. As such, compliance will be key to know the limits of authorizations in the law and the compliance measures (such as due diligence, etc.) that companies and exporters should take to ensure that they act well within the confines of the law.