The Daily Bugle Weekly Highlights: Week 29 (15 – 19 July 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, Sven Goor, and Alex Witt.

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

  1. UK ECJU Publishes 6 New OGELs Excluding Saudi Arabia and its Coalition Partners; The Daily Bugle; Wednesday, 17 July 2019, Item #7;
  2. Justice: “Extradition of Iranian National and Unsealing of Charges Against Two Other Men for Exporting Carbon Fiber from the United States to Iran” ; The Daily Bugle; Thursday, 18 July 2019, Item #4;
  3. UK ECJU Releases Strategic Export Controls Report for 2018; The Daily Bugle; Thursday, 18 July 2019, Item #8;
  4. Justice: “Export Company Executive Pleads Guilty to Violating U.S. Sanctions against Iran”; The Daily Bugle; Friday, 19 July 2019, Item #4;
  5. Treasury/OFAC Sanctions Global Iranian Nuclear Enrichment Network; The Daily Bugle; Friday, 19 July, Item #6;

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1. UK ECJU Publishes 6 New OGELs Excluding Saudi Arabia and its Coalition Partners

(Source: UK ECJU, 17 July 2019.)

The UK Export Control Joint Unit (ECJU) within the Department of International Trade (TID) has published the following update on its website:

Notice to exporters 2019/11: 6 new OGELs issued

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2. Justice: “Extradition of Iranian National and Unsealing of Charges Against Two Other Men for Exporting Carbon Fiber from the United States to Iran”

(Source: Justice, 16 Jul 2019.) [Excerpts.]

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, John C. Demers, the Assistant Attorney General for National Security, John Brown, Assistant Director of the FBI’s Counterintelligence Division, and William F. Sweeney Jr., the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the extradition of BEHZAD POURGHANNAD and the unsealing today of a three-count indictment charging POURGHANNAD, ALI REZA SHOKRI, and FARZIN FARIDMANESH with exporting carbon fiber from the United States to Iran. POURGHANNAD, an Iranian national, was arrested on those charges on May 3, 2017, in Germany and was extradited to the U.S.  POURGHANNAD arrived in the Southern District of New York yesterday, and was presented today in White Plains federal court before U.S. Magistrate Judge Judith C. McCarthy.  SHOKRI and FARIDMANESH remain at large.

U.S. Attorney Geoffrey Berman stated: “Carbon fiber has many aerospace and defense applications and is strictly controlled to ensure that it doesn’t fall into the wrong hands.  Pourghannad and his co-defendants allegedly went to great lengths to circumvent these controls and the United States’ export laws.  Together with our law enforcement partners, we will continue to protect our nation’s assets and protect our national security.”

Assistant Attorney General John Demers said: “Pourghannad is alleged to have sought to procure for Iran large amounts of carbon fiber — a commodity that can be used in the enrichment of uranium.  U.S. sanctions exist to prevent behavior, like this, which endangers our country, and the Department is committed to vigorously enforcing them.  Pourghannad and others who would attempt to thwart these laws need to know that their actions, which benefit Iran’s destabilizing efforts and make Americans less safe, will not go unpunished.”

Assistant Director John Brown of the FBI’s Counterintelligence Division said: “This case shows the FBI aggressively pursues those who allegedly break the law and violate sanctions against Iran.  Iran remains determined to acquire U.S. technology with military applications, and the FBI is just as determined to stop such illegal activity.  The charges against these three Iranian nationals, and the extradition of Mr. Pourghannad, demonstrate we take Iran’s actions extremely seriously and will work with our partners to defeat them.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “Iran’s continued pursuit of technology and materials to advance its nuclear program remains a threat to the US and the rest of the world. The FBI New York and SDNY will continue to pursue these illicit proliferation activities and bring the full investigative and law enforcement capabilities of the U.S. to bear on those who would help Iran advance its dangerous agenda.  If you aid Iran in its efforts, you will be held accountable.” …

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3. UK ECJU Releases Strategic Export Controls Report for 2018

(Source: UK ECJU, 18 July 2019.)

The UK Export Control Joint Unit (ECJU) within the Department of International Trade (TID) has published the following update on its website:

UK Strategic Export Controls annual report 2018

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4. Justice: “Export Company Executive Pleads Guilty to Violating U.S. Sanctions against Iran”

(Source:Justice, 19 Jul 2019.)

Mahin Mojtahedzadeh (Mahin), age 74, a citizen of Iran, pleaded guilty today to conspiring to unlawfully export gas turbine parts from the United States to Iran.

The announcement was made by Assistant Attorney General for National Security John C. Demers, U.S. Attorney Grant C. Jaquith for the Northern District of New York; Special Agent in Charge James N. Hendricks of the FBI’s Albany Field Office, Special Agent in Charge Kevin Kelly of the Buffalo Field Office of Homeland Security Investigations (HSI) and Special Agent in Charge Jonathan Carson of the New York Field Office of the Office of Export Enforcement, Bureau of Industry and Security (BIS), U.S. Department of Commerce.

Mahin pleaded guilty to one count of conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations.  She admitted that she was the President and Managing Director of ETCO-FZC (ETCO), an export company with an office in Dubai in the United Arab Emirates.  ETCO is a supplier of spare and replacement turbine parts for power generation companies in the Middle East, including Iran.

Mahin admitted that from 2013 through 2017, she worked with companies in Canada and Germany to violate and evade U.S. sanctions against Iran, by having these companies first acquire more than $3 million dollars’ worth of turbine parts from two distributors in Saratoga County, New York.

When the U.S. parts arrived in Canada and Germany, respectively, these companies and Mahin then arranged for the parts to be re-shipped to ETCO’s customers in Iran.  At all times, U.S. law prohibited the export and re-export of U.S.-origin turbine parts to Iran without a license from the U.S. Office of Foreign Assets Control (OFAC), which neither Mahin nor her co-conspirators possessed.

“By supplying Iran with millions of dollars’ worth of illegally exported turbine machinery, the defendant provided equipment that is critically important for Iran’s infrastructure,” said Assistant Attorney General Demers.  “This sort of sanctions violation allows the Iranian government to withstand the pressure of U.S. sanctions – pressure that is intended to end Iran’s malign behavior. We will continue to hold to account those who aid Iran in evading the United States’ comprehensive embargo.”

“Mahin Mojtahedzadeh worked for years to illegally acquire gas turbine parts for power plants in Iran,” said U.S. Attorney Jaquith. “She will now be punished for undermining the efficacy of economic sanctions that are intended to protect the national security of the United States.”

“The proliferation of sensitive U.S. technologies to Iran remains a clear threat to our national security,” said Special Agent in Charge Hendricks.  “The FBI, along with our interagency partners, will continue to identify, investigate, and eliminate proliferation efforts aimed at circumventing our export control laws and economic sanctions to illegally obtain sensitive technologies”. …

Mahin faces up to 20 years in prison, as well as a fine of up to $1 million, when she is sentenced on Nov. 12, 2019 by United States District Judge Mae A. D’Agostino.  A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.

Two of Mahin’s co-conspirators have previously pleaded guilty.

Olaf Tepper, age 52, and a citizen of Germany, pleaded guilty to conspiring to violate IEEPA.  On Aug. 3, 2018, Judge D’Agostino sentenced him to 24 months in prison, and to pay a $5,000 fine.  Tepper was the founder and Managing Director of Energy Republic GmbH (Energy Republic), based in Cologne, Germany, which re-exported U.S.-origin turbine parts to Iran, as part of a conspiracy with Mahin.

Mojtaba Biria, age 68, and a citizen of Germany, also pleaded guilty to conspiring to violate IEEPA, and is scheduled to be sentenced on Aug. 14, 2019.  Biria was Energy Republic’s Technical Managing Director.

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5. Treasury/OFAC Sanctions Global Iranian Nuclear Enrichment Network

(Source: Treasury/OFAC, 18 Jul 2019.)

Today the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against a network of front companies and agents involved in the procurement of sensitive materials for sanctioned elements of Iran’s nuclear program.  The individuals and entities targeted today are based in Iran, China, and Belgium and have acted as a procurement network for Iran’s Centrifuge Technology Company (TESA), which plays a crucial role in Iran’s uranium enrichment nuclear program through the production of centrifuges used in facilities belonging to the Atomic Energy Organization of Iran (AEOI).  Treasury sanctioned TESA on November 21, 2011 pursuant to Executive Order (E.O.) 13382, which provides the authority to impose sanctions on proliferators of weapons of mass destruction.

“Treasury is taking action to shut down an Iranian nuclear procurement network that leverages Chinese- and Belgium-based front companies to acquire critical nuclear materials and benefit the regime’s malign ambitions.  Iran cannot claim benign intent on the world stage while it purchases and stockpiles products for centrifuges,” said Treasury Secretary Steven T. Mnuchin. “The U.S. government is deeply concerned by the Iranian regime’s uranium enrichment and other provocative behaviors, and will continue to target all who provide support to Iran’s nuclear program.”

Among the materials sought by this global network, comprised of seven entities and five individuals, were items controlled by the Nuclear Suppliers Group (NSG), a multinational export control regime. Under United Nations Security Council Resolution 2231 (2015), which endorsed the JCPOA, the sale, supply, or transfer to Iran of NSG-controlled items requires advance, case-by-case approval from the UN Security Council, with very narrow exceptions that do not apply in this case. …

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