Yesterday, the United States Department of the Treasury Office of Foreign Assets Control (“OFAC”) issued the long awaited Personal Communications Services General License, which will allow for companies such as Google, Yahoo, and MSN to provide internet based communication technologies (i.e., Google Talk, Yahoo Messenger, MSN Messenger, etc.) to Iran, Cuba, and Sudan.
This general license was recommended by the U.S. Department of State back in December and many people have criticized OFAC for not issuing the license earlier. Generally, this type of software is listed on the Commerce Control List (“CCL”). As such, OFAC is precluded from issuing any type of license–general or specific–to allow for its export. However, the President can utilize his waiver authority under section 1606 of Iran-Iraq Arms Non-Proliferation Act of 1992. This waiver authority was delegated to the Secretary of State in 1994. This waiver authority was used by the Department of State in December at the time it recommended for the issuance of the general license.
The issuance of this general license is codified in the Sudan Sanctions Regulations at 31 C.F.R. 538.533 and in the Iranian Transactions Regulations at 31 C.F.R. 560.540. These sections now provide a general license for exportation of certain services or software incident to the exchange of personal communications over the Internet. Some examples of such services or software are: instant messaging, email, social networking platforms, sharing of photos and movies, web browsing, and blogging tools. Also, it should be noted that in the Cuban Assets Control Regulations this general license is codified at 31 C.F.R. 515.578.
As wonderful as all of this sounds there is a requirement: the services or software must be publicly available at no cost to the user. In addition, to qualify under this general license, the software must either be not subject to the Export Administration Regulations, classifed as EAR99 under the Export Administration Regulations, or classified as mass market software by the Department of Commerce. Also this general license does not permit the exportation of such services or software to the Government of Iran, Government of Sudan, or to the Cuban Communist Party.
On one hand the prohibition on exportation to the Governments of Iran, Sudan, and Cuba in the general licenses quells critics concerns about providing these services and/or software to nations which might use them to monitor or censor its own people, it does present another problem. That problem is for the exporter of the services and/or software. Since the general licenses require that the software be publicly available at no cost to the end user, how are they supposed to put restrictions on who can access the software or service?
I believe this is an area where we will be seeing one of two things take place: 1) either further clarification from OFAC in the form of interpretative guidance, or 2) a number of violations. It seems a daunting task to prevent exportation of a publicly available, free software to any particular party, especially a governmental entity or an agent of a governmental entity.
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 firstname.lastname@example.org.