In recent months, the United States has taken steps to relax sanctions imposed against Sudan, Iran, and Cuba. The modifications have come in two forms: (1) a bill introduced in the United States House of Representatives; and (2) modification to the Office of Foreign Assets Control’s (“OFAC”) regulation of transactions between U.S. entities and Sudan, Iran, and Cuba. These changes enable exports of certain U.S.-origin personal communication software and services.
For companies and individuals subject to U.S. jurisdiction, transactions with Sudan, Iran, and Cuba are governed, in part, by the Sudanese Sanctions Regulations (“SSR”), 31 CFR part 538; the Iranian Transactions Regulations (“ITR”), 31 CFR part 560; and the Cuban Assets Control Regulations (“CACR”), 31 CFR part 515, respectively. These sanctions prohibit exports of most goods and services to Iran, Sudan, and Cuba. Personal communication software applications, such as Twitter, Facebook, and instant messaging, permit users to engage in direct, contemporaneous communication. The advantage of such communication is that unlike traditional forms of major media (e.g., radio and television), Twitter, Facebook, and instant messaging are not controlled by the government. Any citizen with access to the Internet can “broadcast” on Twitter without applying for a government license. Consequently, the use of personal communication software is an important tool in the battle against political regimes that censor access to information.1 Recognizing that the use of these communication tools by individuals in these countries could promote U.S. foreign policy interests, the Iranian Digital Empowerment Act, H.R. 4301 (“the Act”), as well as the OFAC sanctions, exempt these tools from the sanctions.
Relaxation of Sanctions for the Export of Communication Technology to Iran, Sudan, and Cuba
As of March 8, 2010, OFAC modified the sanctions on Cuba, Sudan, and Iran in an effort to ensure that individuals living under the repressive regimes of these countries could have access to free information without regard to government censorship, and to provide a non-government-controlled method for personal communications. OFAC’s modifications recognize that the free exchange of information among individuals is an important tool in fostering change.
Permitted Export Items
On the condition that the software or related service is provided free of cost to the user, the Sudanese, Iranian, and Cuban sanctions permit a limited export of “[s]ervices incident to the exchange of personal communications over the Internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, and blogging.”2
In addition, software necessary to enable these services is permitted for export to Sudan and Iran.3 However, the Cuban sanctions were not modified to permit the export of software to Cuba, and a license continues to be required for exports of U.S.-origin software.
Restrictions on Export
There are notable limitations to these permissible exports. For all three countries, the modified sanctions do not permit direct or indirect exports to state governments or export of:
- Goods or technology listed on the Commerce Control List, other than mass market software
- Internet connectivity services or telecommunications transmission facilities
- Web-hosting services that are for other than personal communications, or of domain name registration services
See, Sudanese Sanctions Regulations, 75 Fed. Reg. 10,997, 11,000 (to be codified at 31 CFR part 538), Iranian Transactions Regulations, 75 Fed. Reg. 10,997, 11,000 (to be codified at 31 CFR part 560), Cuban Asset Control Regulations, 75 Fed. Reg. 10,997, 10,999 (to be codified at 31 CFR part 515).
H.R. 4301: The Iranian Digital Empowerment Act
While similar in purpose to the OFAC sanction modifications, the Act under consideration in Congress applies only to Iran and permits the export of more items.
The Act mirrors the OFAC sanctions by authorizing the export of “software and related services that enable personal communication by the Iranian people.” H.R. 4301 § 3(b)(2). The Act does not define the software and related services that are subject to approval for export to Iran; however, it does provide guidance as to the kinds of personal communication software that will be authorized. The Act specifically identifies Twitter, Facebook, and the instant messaging services of Google and Microsoft as examples of personal communication technologies that enable the user to circumvent the controls imposed by the Iranian government through the Iranian Telecommunications Company. See, H.R. 4301 § 2.
The Act expands upon the OFAC modifications in relation to government censorship. Included in authorized exports under the Act are “software and related services that allow private Iranian citizens to circumvent online censorship and monitoring efforts imposed by the Government of Iran.” H.R. 4301 § 3(b)(1).
The Act authorizes exports only to the extent that they are made available to private Iranian individuals, and it specifically excludes from authorization the exportation of software and related services to the government of Iran, any political subdivision of Iran, and any agency or instrumentality of Iran. H.R. 4301 § 3(c).
U.S. sanctions are constantly changing and companies involved in activities in regions subject to sanctions should carefully monitor their compliance.