On Tuesday, I wrote about the general license issued by the United States Department of the Treasury Office of Foreign Assets Control (“OFAC”) which lifted restrictions on the exportation of internet based personal communications software. I also pontificated at some length about the conflict created in requiring the software or services to be publicly available at no cost while prohibiting exportation to the governments of Iran, Cuba, or Sudan. This in my opinion would obviously cause problems in compliance, because it would make the end users incredibly difficult to ascertain. Therefore, it would seem nearly impossible for an exporter to ensure compliance by not allowing exportation to the governments of Iran, Cuba, or Sudan, while simultaneously making the software or services publicly available at no cost.

However, upon further review of the regulations it seems that point that I had discussed is moot. Clif Burns over at Exportlawblog.com pointed out to me that there is a knowledge requirement in the regulations, which states that the exporter “must know or must have reason to know” that the software or services are being exported to the governments of Iran, Cuba, or Sudan. Therefore, there is a knowledge requirement attached to that prohibition, which makes a lot more sense.

I do not recall seeing this in the 21 page document that OFAC released via its website on Tuesday. I tried to revisit the link this morning, however, it no longer points to that document, but rather to the section of the Federal Register where the the general license regulations are announced. The regulations clearly state this knowledge requirement.

Parsing the language of and interpreting OFAC administered sanctions regulations can be a complex matter. It just goes to show that when dealing with any OFAC issue, you have to always go back to the regulations. Don’t trust everything you read, unless you can verify it through the appropriate regulations. That’s why in dealing with these types of issues it always pays to retain counsel that understands the way OFAC and the regulations work.

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.