Iran Related Sanctions Notes

Iranian Transactions Regulations (ITR) (31 C.F.R. Part 560)

(31 C.F.R. § 560.204) Subject to limited exemptions and to licenses issued by OFAC, the ITR prohibits, in part, the

exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any goods, technology, or services to Iran or the Government of Iran (§ 560.207)

any new investment by a United States person in Iran or in property (including entities) owned or controlled by the Government of Iran id.

see also id. § 560.206(a) (generally prohibiting “any transaction or dealing in or related to ․ [g]oods, technology, or services for exportation, reexportation, sale or supply, directly or indirectly, to Iran or the Government of Iran”).

The regulations also incorporate the statutory exemption permitting the exportation of “informational materials.” Id. § 560.210(c).

Critically, this exemption does not apply to informational materials “not fully created and in existence at the date of the transactions, or to the substantive or artistic alteration or enhancement of informational materials.” Id.

Free Trade in Ideas Act Amendment to International Emergency Economic Powers Act (IEEPA) (50 U.S.C. § 1702(b)(3))

(b) Exceptions to grant of authority The authority granted to the President by this section does not include the authority to regulate or prohibit, directly or indirectly—

(3) the importation from any country, or the exportation to any country, whether commercial or otherwise, regardless of format or medium of transmission, of any information or informational materials, including but not limited to, publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and news wire feeds. The exports exempted from regulation or prohibition by this paragraph do not include those which are otherwise controlled for export under section 2404 of the Appendix to this title, or under section 2405 of the Appendix to this title to the extent that such controls promote the nonproliferation or antiterrorism policies of the United States, or with respect to which acts are prohibited by chapter 37 of title 18; or

OFAC has incorporated the statutory exemption into the ITR; the regulations provide a general license authorizing transactions involving “information and informational materials.” See 31 C.F.R. § 560.210(c)(1).

See id. § 560.418 (“The release of technology or software in the United States ․ to any person violates the [ITR] if made with knowledge or reason to know the technology is intended for Iran or the Government of Iran, unless that technology or software meets the definition of information and informational materials in § 560.315.”)

the general license is not applicable to “transactions related to information and informational materials not fully created and in existence at the date of the transactions, or to the substantive or artistic alteration or enhancement of informational materials, or to the provision of marketing and business consulting services.” Id. § 560.210(c)(2) (emphasis added).

Cases

Teague v. Regional Comm'r of Customs 404 F.2d 441, 445 (2d Cir.1968) (upholding TWEA regulations that effected a categorical prohibition on importation of informational materials from China, North Korea and North Vietnam because the limitation was “incidental to the proper general purpose of the regulations: restricting the dollar flow to hostile nations”

Veterans & Reservists for Peace in Vietnam [A] statute is not overly broad and thus violative of the First Amendment merely because it regulates incident to its scheme protected activities or property. It is only where the statute directly regulates speech or expression arguably protected by the First Amendment, or where as its mechanism the statute has granted discretion to a delegatee to determine whether particular items of expression may be prohibited on the basis of their content, that the question of overbreadth arises. [TWEA] Section 5(b) does not directly regulate First Amendment protected material, rather it controls transactions concerning property in which an enemy has an economic interest. The purport of the statute is clear on its face, and therefore provides guidance to the delegatee with regard to the exercise of his functions.

UNITED STATES of America v. Ali AMIRNAZMI, Appellant. (No. 10–1198.) Argued Jan. 11, 2011. -- May 13, 2011 Commercial exportation of software for NPC gas sales.

Transactions that are prohibited notwithstanding this section include, but are not limited to, payment of advances for information and informational materials not yet created and completed (with the exception of prepaid subscriptions for widely circulated magazines and other periodical publications), and provision of services to market, produce or co-produce, create or assist in the creation of information and informational materials.

Resources

Interpretative Rulings on OFAC Policy