UPDATE: Reports are now being made that the Iranian American college student mentioned in this blog post, told the Apple employees that the Ipad she was seeking to purchase was to be sent to a relative in Iran as a gift. If this was the case, the Apple employees were legally right to not sell her the Ipad. My apologies for offending any Apple retail employees if is an accurate description of the facts.

Yesterday, my email inbox was flooded with emails from colleagues, private citizens and members of various advocacy groups regarding a story that occurred down in Georgia in which an Iranian American college student was denied the right to purchase Apple products, because Apple employees believed such a sale would be a violation of U.S. economic sanctions targeting Iran and in violation of Apple’s export compliance policy. Apparently, the Apple employees overheard the student and her uncle speaking Farsi and, determining they were Iranian, refused to sell them any products. Later on, the college student returned to the store with a reporter and the reporter videotaped a similar incident occuring.

31 C.F.R. 560.204 prohibits the export or reexport of U.S. origin goods, services, or technology to Iran or the Government of Iran. Apple’s export compliance policy states that “The exportation, reexportation, sale or supply, directly or indirectly, from the United States, or by a U.S. person wherever located, of any Apple goods, software, technology (including technical data), or services to [Cuba, Iran, North Korea, Sudan, and Syria] is strictly prohibited without prior authorization by the U.S. Government.” This is a very accurate statement and in line with U.S. law.

Some other attorneys out there are stating that Apple’s policy is in contradiction with the law because there is a personal use general license authorization in the regulations which allows for the purchase of Apple products in the U.S. for the purpose of taking them to Iran. I believe what these individuals are referring to is the accompanied baggage general license found at 31 C.F.R. 560.507; however, this general license only applies to articles that are necessary for “personal use incident to travel…” As such, it is unlikely that consumer electronics, such as those sold by Apple, would fall under that general license. I don’t know what other authorization these individuals could possible be thinking of.

There have been many who are calling for Apple to change its policy so that it not be discriminatory. However it is not Apple’s policy that is discriminatory; the practice of the specific store employees in this case potentially was. So while Apple shouldn’t get in trouble for what occurred here, the employees should; because, not only for the media storm their conduct has caused but because anyone unable to distinguish between a ban on exports to Iran and a ban on sale to persons of Iranian descent may be unfit for employment.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.

NOTE: Clif Burns, from exportlawblog.com, also did a good write up on this incident. You can read it by clicking here.