The Daily Bugle Weekly Highlights: Week 24 (10 – 14 June 2019)

Every Monday we post the highlights out of last week’s FCC Export/Import Daily Update (“The Daily Bugle”). Send out every business day to approximately 6,500 readers of changes to defense and high-tech trade laws and regulations, The Daily Bugle is a free daily newsletter from Full Circle Compliance, edited by James E. Bartlett III, Alexander P. Bosch, Vincent J.A. Goossen, and Alex Witt.

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Last week’s highlights of The Daily Bugle included in this edition are:

  1. Justice: “Morris County Woman Admits Conspiring with Iranian National to Illegally Export Aircraft Components to Iran”; The Daily Bugle; Wednesday 12 June 2019, Item #5;
  2. UK Parliament Publishes Report on UK’s Sanctions Policy; The Daily Bugle; Wednesday 12 June 2019, Item #8;
  3. Cubasphere, Inc. to Pay $40,320 to Settle OFAC Charges of Sanctions Regulations; The Daily Bugle; Thursday, 13 June 2019, Item #5;
  4. Expedia to Pay $325,406 to Settle OFAC Charges of Sanctions Regulations; The Daily Bugle; Thursday, 13 June 2019, Item #6;
  5. Hotelbeds USA to Pay $222,705 to Settle OFAC Charges of Sanctions Regulations; The Daily Bugle; Thursday, 13 June 2019, Item #7;
  6. President Continues National Emergency with Respect to Belarus; The Daily Bugle; Friday, 14 June 2019, Item #1;

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1. Justice: “Morris County Woman Admits Conspiring with Iranian National to Illegally Export Aircraft Components to Iran”

(Source: Justice, 11 June 2019.) [Excerpts.]

A Morris County, New Jersey, woman today admitted her role in a scheme to illegally smuggle millions of dollars’ worth of aircraft parts from the United States to Iran, U.S. Attorney Craig Carpenito announced.

Joyce Eliabachus, a/k/a “Joyce Marie Gundran Manangan,” 52, of Morristown, New Jersey, pleaded guilty before U.S. District Judge Madeline Cox Arleo to an information charging her with one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA) in connection with her role in an international procurement network that smuggled over $2 million worth of aircraft components to Iran.

In addition to the guilty plea, a complaint was unsealed today in New Jersey against Peyman Amiri Larijani, 33, a citizen and resident of Iran charging him with one count each of conspiracy to violate Iranian Transactions and Sanctions Regulations (ITSR), conspiracy to commit money laundering, and conspiracy to smuggle goods from the United States. Larijani was also charged in U.S. District Court for the District of Columbia in two separate indictments unsealed June 4, 2019. …

Eliabachus, Larijani and others were part of an international procurement network that surreptitiously acquired large quantities of aircraft components from United States-based manufacturers and vendors and unlawfully exported them to entities in Iran using freight-forwarding companies in the United Arab Emirates (UAE) and Turkey.

Eliabachus was the principal officer and operator of Edsun Equipments LLC, a purported New Jersey-based aviation parts trading company run out of her Morristown residence. Larijani was the owner of an Iran-based procurement firm and served as operations and sales manager of a network of supply and engineering companies in Tehran, Iran, and Istanbul, Turkey.

From May 2015 through October 2017, Eliabachus, Larijani, and their conspirators facilitated at least 49 shipments containing 23,554 license-controlled aircraft parts from the United States to Iran, all of which were exported without the required licenses. …

In order to obscure the extent of the network’s procurement activities, Eliabachus routinely falsified the true destination and end-user of the aircraft components she acquired. She also falsified the true value of the components being exported in order to avoid filing export control forms, which further obscured the network’s illegal activities from law enforcement. …

The count of conspiracy to violate IEEPA, to which Eliabachus pleaded guilty, carries a maximum potential of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 24, 2019. …

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2. UK Parliament Publishes Report on UK’s Sanctions Policy

(Source: UK Parliament, 12 June 2019.) [Excerpts.]

The United Kingdom’s House of Commons Foreign Affairs Committee published its 17th Report entitled “Fragmented and incoherent: the UK’s sanctions policy”.

Summary

A robust, effective and coherent sanctions policy is indispensable to the UK as a global actor. The centrality of sanctions to UK foreign policy, national security and the functioning of the rules-based international system cannot be overstated. As it prepares to leave the EU, the UK must be ready to take responsibility for designing, implementing and enforcing its own sanctions.

Yet the Government does not have a clear strategy for sanctions. Little high-level thought appears to have been given to UK priorities for post-Brexit sanctions. Moreover, the Government’s failure to establish a clear legal view on whether the UK can independently sanction human rights abusers while still an EU member state, and its obfuscation on this issue in response to the Committee’s questioning, risk signalling that the UK is reluctant to use those powers. The Government must rectify this mistake by agreeing on a clear legal position and publishing it before the end of June.

The cross-Whitehall structures underpinning sanctions policy-making, implementation and enforcement are highly fragmented, further undermining strategic coherence and enabling departments to avoid taking responsibility. The Government should address this by appointing a Senior Responsible Officer for sanctions policy who will be personally accountable to the National Security Council.

The Foreign and Commonwealth Office also seems unwilling to acknowledge that it has a vital role to play in helping to keep the UK and our allies safe by cracking down on the laundering of dirty money. As this Committee has said in previous Reports, dirty money is a national security issue, especially in the light of London’s importance in the global financial system. It is simply not good enough for the Minister of State to assert that financial crime is “not quite” the Foreign and Commonwealth Office’s “patch”.

The Government has spent the last two years running as fast as it can just to stay in the same place. The time is right for a major review of the Government’s approach to sanctions at every stage. Without such a review, the UK runs the risk of allowing its sanctions policy to be dictated by the decisions of others. The UK must now seize the opportunity to become a global leader in sanctions policy. We hope the Government will take this warning to heart.

Read the full report here.

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3. Cubasphere, Inc. to Pay $40,320 to Settle OFAC Charges of Sanctions Regulations

(Source: Treasury/OFAC), 13 June 2019.)

OFAC today also separately announced a $40,320 settlement with an individual (the “Individual”) and Cubasphere, Inc. (“Cubasphere”). The Individual, as well as Cubasphere, on whose behalf the Individual also acted, have agreed to pay $40,320 to settle their potential civil liability for apparent violations of the CACR. Specifically, the Individual and Cubasphere dealt in property in which Cuba or Cuban nationals had an interest, in apparent violation of § 515.201(b) of the CACR, by engaging in unauthorized Cuba travel-related transactions by assisting 104 persons on four separate trips to and within Cuba, from on or about December 30, 2013 to on or about February 22, 2014. OFAC determined that the apparent violations were not voluntarily self-disclosed to OFAC and occurred subsequent to agency notice.

For more information, please visit the following web notice.

OFAC strongly encourages organizations subject to U.S. jurisdiction, as well as foreign entities that conduct business in or with the United States, U.S. persons, or using U.S.-origin goods or services, to review OFAC’s May 2, 2019 “A Framework for OFAC Compliance Commitments​” for more information regarding best practices for developing, implementing, and updating risk-based sanctions compliance programs.

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4. Expedia to Pay $325,406 to Settle OFAC Charges of Sanctions Regulations

(Source: Treasury/OFAC), 13 June 2019.)

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced a $325,406 settlement with Expedia Group, Inc. (“Expedia”). Expedia, headquartered in Bellevue, Washington, on behalf of itself and its subsidiaries and affiliates worldwide, has agreed to pay $325,406 to settle its potential civil liability for providing Cuba-related travel services in apparent violation of the Cuban Assets Control Regulations, 31 C.F.R. part 515 (CACR). Specifically, between on or about April 22, 2011 and on or about October 16, 2014, Expedia dealt in property or interests in property of Cuba or Cuban nationals by assisting 2,221 persons — some of whom were Cuban nationals — with travel or travel-related services for travel within Cuba or between Cuba and locations outside the United States. These transactions appear to have violated § 515.201(b) of the CACR. OFAC determined that the apparent violations were voluntarily self-disclosed to OFAC and occurred prior to agency notice.

For more information, please visit the following web notice.

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5. Hotelbeds USA to Pay $222,705 to Settle OFAC Charges of Sanctions Regulations

(Source: Treasury/OFAC), 13 June 2019.)

OFAC today separately announced a $222,705 settlement with Hotelbeds USA, Inc. (“Hotelbeds USA”). Hotelbeds USA, incorporated in Florida, is a U.S. subsidiary of Hotelbeds Group, headquartered in Mallorca, Spain. Hotelbeds USA has agreed to pay $222,705 to settle its potential civil liability for assisting persons with unauthorized Cuba-related travel services in apparent violation of the CACR. Specifically, between the approximate dates of December 2011 and June 2014, Hotelbeds USA provided Cuba-related travel services to 703 non-U.S. persons in apparent violation of § 515.201(b) of the CACR. OFAC determined that the apparent violations were not voluntarily self-disclosed to OFAC and occurred prior to agency notice.

For more information, please visit the following web notice.

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6. President Continues National Emergency with Respect to Belarus

(Source: Federal Register, 14 June 2019.)

Continuation of the National Emergency with Respect to the Actions and Policies of Certain Members of the Government of Belarus and Other Persons to Undermine Democratic Processes or Institutions of Belarus

On June 16, 2006, by Executive Order 13405, the President declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the actions and policies of certain members of the Government of Belarus and other persons to undermine Belarus’s democratic processes or institutions, manifested in the fundamentally undemocratic March 2006 elections; to commit human rights abuses related to political repression, including detentions and disappearances; and to engage in public corruption, including by diverting or misusing Belarusian public assets or by misusing public authority.

The actions and policies of certain members of the Government of Belarus and other persons continue to  pose an unusual and extraordinary threat to the national security and foreign policy of the United States. For this reason, the national emergency declared on June 16, 2006, and the measures adopted on that date to deal with that emergency, must continue in effect beyond June 16, 2019. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), I am continuing for 1 year the national emergency declared in Executive Order 13405.

This notice shall be published in the Federal Register and transmitted to the Congress.

(Presidential Sig.)