The virtual export and import

I was interviewed earlier this month by Al Jazeera Arabic on a particularly interesting issue concerning U.S. sanctions on Syria.  The question was whether a Skype appearance by a Syrian government official designated on the OFAC Specially Designated Nationals (SDN) list at a Washington, DC conference violated U.S. sanctions.  My answer was, yes, of course! For those who speak Arabic, the interview is below:

So what exactly happened? Bouthaina Shaaban, Syrian President Bashar Al-Assad’s Political & Media Adviser (herself, like Assad, on the SDN list) spoke via Skype at a conference hosted at the National Press Club in Washington.  My take on this was simple – it was a violation on two fronts.  For one, the group inviting her was effectively “importing” a service from Ms. Shaaban (she is in Syria, after all), and arguably “exporting” a service to her by providing her a platform.

Notably, Ms. Shaaban was designated by OFAC on August 30, 2011 pursuant to Executive Order 13573 (May 20, 2011). This Executive Order allows the President to designate, among other entities, any person deemed “to be a senior official of the Government of Syria.” This enables an asset freeze of such persons’ assets if they come into the possession of a U.S. person, and generally U.S. persons cannot deal with such persons absent specific OFAC authorization.  But that’s not why it was really prohibited – the applicable language in the Syrian Sanctions Regulations, 31 CFR Part 542 (the “SSR”) applies to a much broader range of entities than those particularly singled out by OFAC and placed on the list.  Notably, 31 CFR §§ 542.207 and 542.208 of the SSR bar most imports and exports between Syria and the United States.  Now, if Ms. Shaaban had been in a third country, say Switzerland, it would still be an issue for other reasons, including the fact that she is an SDN.

Beyond the world of SDNs and even just Syria, and perhaps more importantly for every day matters, the case brings to light OFAC’s traditional position on the definition of “import” and “export.” In common-day parlance, these terms imply the explicit movement of actual, tangible goods.  But not quite according to OFAC.  For example, OFAC has deemed certain employment of U.S. persons in Iran to be the prohibited “exportation” of prohibited services to Iran requiring OFAC licenses.  Conversely, holding a bank account in a sanctioned country can constitute the prohibited “importation” of services.  Ms. Shaaban’s speaking is much the same.  This is important to consider for compliance purposes and why simply reading the regulations is often not enough to understand their purpose and OFAC’s position on the issue(s).

 

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