The United States Department of Commerce Bureau of Industry and Security [BIS] has published new rules pertaining to the reexport of certain items to Iran. The new rules aim to revise and clarify the Export Administration Regulations [EAR] by establishing a new license requirement for reexport of a number of items classified under Export Control Classification Numbers [ECCNs] that did not previously need a license.

For those of you confused by the term, reexportation is the act of exporting items that had originally been imported. The reexportation of most items to Iran is prohibited under the Office of Foreign Assets Control-administered Iranian Transactions Regulations (31 CFR Part 560). BIS maintains licensing requirements on exports and reexports to Iran under the EAR.

Without diving into the technical legalese, the main aim of the licensing policy is to permit licenses for humanitarian reasons or for the safety of civilian aviation and safe operation of U.S. origin aircraft on a case by case basis. Licenses for any other purposes will generally be denied.

However, just because a certain export may require a license does not mean that OFAC can not prohibit the exportation of such good. With regards to all exports and reexports to Iran, the Iranian Transactions Regulations dictate what may or may not be exported to Iran.

It seems to me that if BIS truly wanted to bring clarity to the process of licensing requirements for reexports to Iran, they would work more seamlessly with OFAC to implement one definitive list of items which may be exported under a license. The business of having regulations put out by one agency that prohibits the exportation of items for which another agency’s regulations allow licensure seems cumbersome and open to misinterpretation.

My goal here is not to suggest an easier method for exportation of goods to Iran, but rather make the process easier to work through for businesses, so that compliance measures can be more effectively and immediately installed. The ultimate goal should be to enable the private sector to comply with sanctions regulations, rather than to confuse businesses with awkward procedures and interpretations.

If you feel that you may have violated the Iranian Transactions Regulations or need wish to speak to legal counsel about obtaining a license to export to Iran please contact the author at 202-329-5652 or by email at ferrari@mcnabbassociates.com

The author of this blog is Erich C. Ferrari, an attorney in Washington, DC, who specializes in Sanctions Law and White Collar Criminal Defense. If you have any questions please email him at ferrari@mcnabbassociates.com