Iran
Virginia Man Pleads Guilty to Conspiring to Violate Iran Sanctions (DOJ Action)
Those involved. Behrouz Mokhtari, a naturalized U.S. citizen and native of Iran.
Charges with penalties. Two counts of Conspiracy to Violate the International Emergency Economic Powers Act (IEEPA) (maximum of 10 years in prison). What happened? Behrouz Mokhtari – chairman of the FSR Network, a group of companies located in the United Arab Emirates (UAE) and Iran – pleaded guilty to two counts of conspiring to violate IEEPA. Between approximately March 2018 and September 2020, Mokhtari used his multiple businesses, referred to as “the FSR Network,” to engage in transactions with Iranian entities involving Iranian petrochemicals. Mokhtari used Bitubiz FZE, a company based in the UAE and part of the FSR Network, to process the transactions denominated in U.S. dollars. Separately, between approximately February 2013 and June 2017, Mokhtari illegally shipped petrochemical products to and from Iran without the necessary licenses, violating U.S. sanctions on Iran. According to the DOJ, Mokhtari purchased two liquid petroleum gas tankers using a Panamanian shell company, East & West Shipping Inc., to transport the petrochemical products. He falsified shipping documents to conceal the fact the shipments violated sanctions. To hide his ownership interests in the tankers, Mokhtari transferred ownership to Greenline Shipholding Inc., which Mokhtari and his co-conspirators then used to control the tankers. The tankers were subsequently transferred to another company called Russell Shipping. A year later, the vessels were sold for scrap for $3.1 million. Mokhtari received $2.9 million, which he used to buy a house in California. As a condition of the guilty plea, Mokhtari must forfeit all money, property and assets resulting from the illegal activities. This includes the California home and a $2,862,598.12 money judgment. Sentencing is scheduled for April 3, 2023.
The DOJ press release can be found here. The plea agreement can be found here.
Notably. Even wholly foreign companies must closely monitor how they are processing payments if such payments are processed using U.S. dollars, because any U.S. dollar-denominated transaction must be cleared by a U.S. bank. This can be the basis for U.S. jurisdiction over a transaction even when there is no other connection to the United States.
Iran-Related Additions to the Entity List (DOC/BIS Action)
On January 31, BIS added seven Iranian drone producers – Design and Manufacturing of Aircraft Engines (DAMA), Islamic Revolutionary Guard Corps Aerospace Force, Islamic Revolutionary Guard Corps Research and Self- Sufficiency Jihad Organization, Oje Parvaz Mado Nafar Company, Paravar Pars Company, Qods Aviation Industry, and Shahed Aviation Industries – to the Entity List. The seven entities were added after it was determined they had acted contrary to U.S. national security or foreign policy interests. Suppliers – including non-U.S. suppliers – are now required to obtain a license from BIS before exporting EAR-controlled items to those entities. Those license applications will be reviewed under a presumption of denial. The restrictions also prohibit the transfer of certain foreign-made components to these producers.
The BIS press release can be found here. The final rule can be found here.
5 International Trade Enforcement Roundup |
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