Telecommunications and the Iran Protests – a Sanctions Response from the Trump Administration?

Many have been caught by surprise by widespread anti-government protests in Iran that started in Mashhad last week ostensibly over food prices and have now engulfed the whole country, going on to their 9th straight day.  The Trump administration has indicated moral support for the protestors’ right to peaceful demonstration and their gripes against the Iranian government. “Support,” however, is very vague, and some are demanding that the United States do more to demonstrate support. In the absence of diplomatic relations between the two states, how could this support work out? The answer may very likely lie in our sanctions laws.

Much has been said about decertification of the Joint Comprehensive Plan of Action (JCPOA), the so-called “nuclear deal” entered into by the United States and the “P5+1” nations of the United States, United Kingdom, France, Germany, Russia, and China in 2015, implemented in January 2016. But that’s not the real extent (or potentially even the focus) of sanctions as a foreign policy tool in U.S. policy against Iran.

The United States continues to maintain a very robust sanctions architecture in place against Iran, covering the vast majority of trade between so-called “U.S. persons,” which include U.S. companies, as well as citizens and permanent residents wherever located, and others are physically in the United States.  Despite the 2015 nuclear deal (the Joint Comprehensive Plan of Action or JCPOA), a large number of “secondary” sanctions remain in place. These are limitations whereby the U.S. can place limits on the U.S. activities of third country actors (such as European or Asian companies) that engage in certain transactions with Iran or specific Iranian entities that may be sanctioned by the United States.

So, given recent events in Iran, what could the Trump administration change with respect to sanctions?

Satellite

Information & Communications Technology (IT) 

The Iranian government’s restrictive internet policies have been a key challenge to Iranian civil society on many fronts.  Despite the presence of nearly 50 million smart phones in Iran, the government continually throttles the internet and blocks sites like YouTube, Facebook, and Twitter (even though many Iranian officials maintain a presence on these sites), and there have been recent reports of blocking Instagram and Telegram, a messaging app hugely popular in Iran.

These actions are not new, and in 2013, in a bid to improve the access of people in Iran to telecommunications with one another and the outside world, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License D (now General License D-1).  This “General License” authorizes the lawful exportation to Iran of many U.S. origin telecommunications goods and services, such as mobile phones, tablets, laptops and accessories without having to obtain OFAC approval, provided the sales are executed in a lawful manner, which includes restrictions on end-use, end-user, and receipt of payment. While GL D-1 is expansive in what it allows, it is not without limitations, and there has been talk of expanding the scope of and activities it authorizes, or at least encouraging the U.S. government to expand it.

Although U.S. companies can export many fee-based and non-fee based apps to Iran, they cannot host a wide array of Iranian web content, such as e-commerce sites or related apps (for example those allowing users in Iran to purchase goods).  This is consistent with U.S. sanctions policy of limiting Iran’s commercial activity with U.S. persons.  The effect is that lawful U.S. apps become more difficult to access from Iran as companies like Apple and Google have closed their app stores to Iranians, presumably out of fear that Iranians could download certain apps that are not permitted and that the U.S. tech giants may host Iranian apps that they are not allowed to. Therefore, a lot of what is allowed to happen simply isn’t available, or at least not with ease.  OFAC could clarify its position on such activities in the coming days and weeks, making it easier for companies to export these goods and services.

Second, OFAC could expand General License D-1 to also include the exportation of items like Apple TV, Roku and the Amazon Fire, which will allow individuals in Iran with easier access to foreign television feeds. Given the Iranian government’s practice of jamming signals from foreign news channels like the BBC Persian or Voice of America (VOA), not to mention fairly regular drives to collect illegal rooftop satellite dishes, this move could be seen as a way to expand people’s access to foreign media and receive more varied news. It could also enable the provision of services to Iran enabling the exportation of internet and television connectivity to individuals in Iran, enabling them to bypass the throttled internet.

Sanctioning Iran’s State-Owned Television & Radio

The other potential move by the U.S. government could be to reimpose currently waived sanctions against IRIB, which maintains a constitutional monopoly on television and radio.  Remember a few years back when the United States was imposing new sanctions legislation against Iran in rapid succession.  One issue of concern particularly after the 2009 Iranian election was the use of Iranian television to broadcast mass trials and allegedly false confessions Following implementation of the Iran Freedom and Counter-Proliferation Act of 2012 (the IFCA), the IRIB was added to the OFAC Specially Designated Nationals (SDN) list, effectively a “black list” of parties around the world that U.S. persons are generally barred from dealing with.  This originated from the Iran Threat Reduction and Syria Human Rights Act (aka the “Threat Reduction Act” or “TRA”), which, among other things, called for drastic expansions of U.S. broadcasting to Iran and Persian-language content and to overcome the regime’s attempts to jam outside broadcasting signals.

The IFCA notably has a provision (§ 1244) calling for the designation on the SDN list of certain non-U.S., non-Iranian persons, such as Asian and European companies if they under some circumstances “knowingly provides significant financial, material, technological, or other support to, or goods or services in support of any activity or transaction on behalf of or for the benefit of” an Iranian SDN such as IRIB. In other words, the U.S. government can sanction a European company for providing material satellite services to the IRIB if there is no U.S. waiver or other authorization in place.  That would cause an effective blocking of that entity from the United States economy and banking system.

In 2014 and 2015, before the JCPOA, the Obama administration issued a waiver on certain “secondary sanctions” on IRIB, which punish third country companies that engage in certain transactions with the entity.  This waiver enabled IRIB to deal with satellite companies around the world to broadcast its signals, many but not all of which reached far beyond Iran’s borders.  By revoking this waiver, the U.S. Department of State could substantially paralyze IRIB’s ability to broadcast not only outside Iran but even within its borders.

But didn’t the JCPOA get rid of these limitations? Not really. As part of the JCPOA, many activities subject to sanctions in the IFCA were waived, but only for Iranian entities in the “annex” to the JCPOA, which does not include the IRIB.  Given this, the IRIB remains subject to secondary sanctions and the Department of the Treasury has wide discretion to designate entities violating the spirit of §1244.

Alternatively there are other possibilities OFAC and the Department of State may pursue, such as sanctioning more human rights violators, blocking any assets of theirs coming into the hands of U.S. persons among other things.

The past 15 or so years have seen increasing bipartisan support for sanctions as a non-violent tool to implement U.S. policy objectives and effectuate a change in behavior by sanctioned entities. It is likely sanctions may be the United States’ first formal response to recent events.

Advertisements

An international trade and regulatory lawyer.

Posted in Iran, OFAC, Sanctions

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

Akrivis Law Group, PLLC
(202)686-4859
Washington, DC
E-Mail

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 96 other followers

DISCLAIMER
This website aims to provide notes and commentary on international legal, business, and political developments in economic and other sanctions. It is intended solely for information and entertainment purposes and should in no way be construed as legal advice. If you have any questions or are unclear on any of the subject matters addressed or discussed on this site, please consult a licensed legal professional. Views presented in the comments and outside links do not necessarily reflect those of the website author. All external links on this website to articles and documents are external and provided for informational purposes only. They have no relation to the author of this website unless specified otherwise.

This website is independent of Akrivis Law Group, PLLC and any statements of opinion posted on this website are therefore not to be considered positions of Akrivis Law Group, PLLC.

Quotations and linkages do not imply any type of endorsement.

Copyright 2017 Farhad R. Alavi.
All rights reserved.
US Sanctions Law Blog USSanctions.com

%d bloggers like this: