When the United States Department of the Treasury Office of Foreign Assets Control (“OFAC”) issued a general license permitting the export of internet based personal communications software and services to Iran, Cuba, and Sudan last month, many believed that the creators of Haystack, an anti-censorship software, were off the hook in terms of seeking authorization for export of their software to Iran. However, that was the wrong assumption to make, considering that the general license does not mention authorization of export for software used in the circumvention of security measures. Rather, the general license was for communications software, such as, blogging tools, social media platforms, and instant messaging services. As such, Haystack would not have fallen under the general license.

Haystack, is a software that I have written about several times on this blog. It caught mainstream media attention last summer when it was being exported (some might say smuggled) into Iran on flash drives and given to Iranian protestors following the June 2009 elections. Generally, this type of export is prohibited by the Iranian Transactions Regulations, one of two U.S. economic sanctions programs against Iran. The violation of this prohibition could have serious consequences including potentially large civil penalties, as well as, criminal penalties.

Well Haystack need worry no more. According to a press release by the Censorship Research Center, OFAC has granted authorization for the export of Haystack to Iran. This is great news for Haystack and its creators, however, the question must be asked: is it too late? This was a software that was desperately needed by Iranian protestors last summer. It took OFAC nearly a year to come to a decision on whether they would allow for it to be exported. With protesters stifled by Iranian government censorship measures, the political movement that spawned in the aftermath of the June elections has been hampered and died down to a great degree.

Looking back, what effect might Haystack have had if OFAC acted sooner and allowed for its export to Iran?  While hindsight is always 20/20, it seems that it would have greatly aided the politcal reform movement in Iran and we might be dealing with a very different Iranian government today if the U.S. government would have moved faster. What it is clear is that OFAC needs to steamline its decisionmaking processes in order to more quickly address situations such as this. Whether we will see that kind of change in the future is anyone’s guess.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC litigation. If you have any questions please contact him at 202-280-6370 at 202-351-6161 or ferrari@ferrari-legal.com.