You are currently surrounded by “dual-use” goods that could contribute to Iran’s nuclear or military programs.
If you’ve begun panicking, that’s exactly the reaction the Department of Justice wants you to have.
A few weeks ago, DOJ unsealed an indictment in the Southern District of Texas targeting four companies and five individuals for violations of the International Emergency Economic Powers Act. The individuals, 2 Iranian-Americans, Bahram Mechanic and Tooraj Faridi, a Taiwanese citizen, and an Iranian based in Turkey are accused to shipping a number of dual-use electronic components to Iran with the required licenses from the Office of Foreign Assets Control (“OFAC”) or the Commerce Department’s Bureau of Industry and Security (“BIS”), though technically all that would be required is an OFAC license, see 15 C.F.R.§746.7(a)(2).
While Erich wrote about this case at the time, it’s worth digging a little deeper into how DOJ characterizes dual-use goods and the actual items involved in this case. According to the indictment, the defendants are accused of shipping
microelectronics such as microcontrollers (“MCUs”) and digital signal processors (“DSPs”) as well as other equipment related to Uninterruptable Power Supply (UPS) technology.
Here’s how DOJ describes UPS systems:
UPS is an electrical apparatus that provides emergency power when normal electrical power fails and, for that reason, UPSs are critical for various military systems such as naval vessels, radar arrays and air defense systems and are also crucial in the nuclear energy sector.
Scary stuff. In reality, what they were actually exporting were glorified surge protectors. Useful for the Iranian military? Maybe. Useful for your office building? Probably.
The descriptions of the other products present similarly dire scenarios.
An MCU is a small computer on an integrated circuit that contains a processor, memory, and inputs and outputs to a larger system. MCUs are widely utilized in military systems to run a pre-set sequence of actions, such as running a missile through launch and targeting. Specific attributes such as low-power consumption and high-speed processing make certain classes of MCUs well suited for weapons.
DSPs are a specialized type of microprocessor designed to optimize digital signal processing. They are used to continuously perform complex mathematical functions on data, such as modulating an audio stream to reduce noise… Modern foreign weapon systems, such as surface-to-air missiles and cruise missiles, employ digital avionics suites to carry out their guidance profiles.
Mechanic et. al. are accused of exporting 3 types of MCUs to Iran – Atmel AT89C55WD-24PU and Texas Instruments-produced TMS320F28069PZT and TMS320F28235PGFA. DOJ notes that these MCUs are classified as ECCN 3A991.a for the purposes of the Commerce Control List and require a license for export to certain countries “for anti-terrorism reasons.” It should be noted that the computer I’m writing this on, an Apple Macbook Pro, is categorized as 5A992.c and is also controlled for anti-terrorism reasons.
There is a separate BIS licensing requirement under 15 CFR § 744.17 for the export of certain MCUs categorized as 3A991.a.1 to military end-users. This requirement only applies for items “having a processing speed of 5 GFLOPS or more and an arithmetic logic unit with an access width of 32 bit or more.” This would seem to indicate that there are certain types of MCUs that BIS recognizes are suitable for military use.
So were these components essential ingredients in Iran’s nuclear or ballistic missile program as alluded to by DOJ? If so it would be logical that the items would be covered by 3A991.a.1.The indictment doesn’t go into § 744.17, but I decided to take a closer look at the products themselves.
The Atmel MCU is immediately eliminated, as it is 8-bit. The two Texas instrument products are in fact 32-bit, but I consulted with someone who knows far more about computing then I, who assured me that these chips were not powerful enough to exceed the 5 GFLOPS requirement. It should also be mentioned these chips run from $1.50 per unit for the Atmel and $18.50 for the TMS320F28235PGFA (if bulk purchasing).
The DSPs exported by the Defendants, the Texas Instruments TMS320LF2406PZS, the ones DOJ alleged can be used in surface to air missiles, are 16-bit and not subject to the § 744.17. While I’m sure DSPs can be used for missiles, they are also used in the Cisco telephone sitting on my desk.
At the end of the day, its seems that Bahram Mechanic’s defense counsel is correct in saying “using these items in a nuclear power plant would be like powering a Tesla automobile with a single “AA” battery.” Further, as noted in Footnote 4 of the Response to the Government’s Motion for Revocation of Release Order,
The Indictment refers to microprocessors (“MCU’s”) and digital signal processors 4 (“DSP’s”). These products are used in surge protectors, televisions, tape recorders, guitars, etc. In order to use one in a missile, nuclear power plant or the like, it has to be designed for that purpose. The government agent admitted at the detention hearing they had no such evidence in this case (emphasis added).
So despite the repeated references to Iran’s military and nuclear programs in the indictment, the government readily admits that there’s no evidence that the products were designed for military use.
None of which is to say that the defendants shouldn’t be prosecuted or that criminal activity did not occur. But DOJ has a habit of trying to turn every export control case involving Iran into a conspiracy to support Iran’s nuclear program or military apparatus. If they can’t secure conviction strictly based on the facts and must resort to pressuring the jury into viewing the conduct as directly supporting nefarious Iranian activity, perhaps they should consider leaving the enforcement to OFAC, particularly in cases where conduct at hand is a violation is of government regulations.