On April 22, 2012, President Obama issued an Executive Order authorizing new sanctions on individuals and entities that operate or provide information technology that facilitates the perpetration of human rights abuses by the Syrian and Iranian Governments. Effective April 23, 2012, Executive Order 13606, also known as the order Blocking the Property and Suspending Entry into the United States of Certain Persons with Respect to Grave Human Rights Abuses by the Governments of Iran and Syria Via Information Technology (GHRAVITY E.O. or E.O. or Order) blocks (i.e., freezes) the property of individuals and entities, and suspends entry into the United States of aliens, who have operated, directed operation of, sold, leased, or helped put in place, technology that facilitates computer or network disruption, tracking, or monitoring to enable the ongoing human rights violations in Syria and Iran.
Both the Syrian and Iranian Governments have used information technology to suppress citizen uprisings through cell phone tracking, blocking access to the Internet, and maintaining surveillance on protestors. The GHRAVITY E.O. states that its provisions “are designed primarily to address the need to prevent entities located in whole or in part in Iran and Syria from facilitating or committing serious human rights abuses,” but the order can be applied to individuals and entities from other countries, including the United States, as well. The GHRAVITY E.O. makes it clear that its provisions are not meant to prevent the Iranian and Syrian people from communicating freely with each other and with the broader global community.
Blocking of Designated Entities
The GHRAVITY E.O. blocks the property and interests in property of persons (i.e. individuals and entities) that are determined by the Secretary of Treasury, in coordination with the Secretary of State, to have undertaken the activities specified in the Order. Such property is blocked if it is in the United States or in the possession or control of a US person.
Operating or Directing the Operation of Network Disruption, Monitoring or Tracking Technology
The GHRAVITY E.O. provides for the blocking of assets of those individuals or entities that have operated, or directed the operation of “information and communications technology that facilitates computer or network disruption, monitoring, or tracking that could assist in or enable serious human rights abuses by or on behalf of” the Iranian or Syrian Government. The E.O. defines “information and communications technology” as “any hardware, software, or other product or service primarily intended to fulfill or enable the function of information processing and communication by electronic means” including “transmission and display, including via the Internet.”
Selling or Providing Network Disruption, Monitoring or Tracking Technology; Providing Material Assistance for Such Activities
The GHRAVITY E.O. also provides for the blocking of assets of those individuals or entities determined (1) to have sold, leased, or otherwise provided either directly or indirectly goods, services, or technology to Iran or Syria, that are “likely to be used to facilitate computer or network disruption, monitoring, or tracking that could assist in or enable serious human rights abuses” by or on behalf of the Iranian or Syrian Governments; (2) to have “materially assisted, sponsored, or provided financial, material, or technological support” for, or “goods or services to or in support of,” such activities; or (3) to be owned or controlled by, or to have acted or purported to act for or on behalf of, either directly or indirectly, any person whose property and interest in property are blocked under the Order. It is not clear whether the prohibitions apply to conduct engaged in prior to the effective date of the E.O. If so, it is theoretically possible that such actions undertaken prior to the effective date of the Order may be sanctionable.
The Annex to the GHRAVITY E.O. lists sanctioned entities whose assets are also blocked. These entities mainly comprise Syrian and Iranian agencies and telecommunications companies, including the Syrian General Intelligence Directorate, the Syriatel phone company, the Director of Syria’s General Intelligence Services, the Islamic Revolutionary Guard, the Iranian Ministry of Intelligence and Security, the Law Enforcement Forces of the Islamic Republic of Iran, and Datak Telecommunications.
US persons and entities may not conduct any transaction relating to property or interests in property belonging to, or more than 50% owned or controlled by, persons designated by the GHRAVITY E.O., and US persons are obligated to block such property.
The GHRAVITY E.O. also prohibits contributions or receipt of funds, goods, or services to or from blocked entities or individuals. The prohibition includes donations of food, clothing, medicine, and other such humanitarian materials.
In addition to having their property blocked, aliens targeted under the Order are banned from entering the United States. Finally, US persons are prohibited from taking any action to evade or avoid the prohibitions set forth in the order. Employees and contractors engaging in “transactions for the conduct of the official business of the United States Government” are excluded from the scope of the order.
The GHRAVITY E.O. presents two key compliance elements that companies should consider. First, as with all additions to restricted party lists, companies need to make sure their compliance programs effectively capture new additions like these. The second consideration is potentially more serious – information technology and telecommunications companies will want to make sure they are not at risk of inadvertently becoming a target of the sanctions themselves. Companies that are determined by the Treasury and State Departments to have sold or provided goods, products, or services likely to be used to facilitate computer or network disruption, monitoring, or tracking resulting in serious human rights abuses can be designated as restricted parties whose property must be blocked pursuant to the Order.
Given that the GHRAVITY E.O. is layered on top of pre-existing comprehensive US sanctions against Iran and Syria, the new Order is not likely to result in further substantial limitations on US technology companies, which already face far-reaching restrictions on conducting transactions with Iran and Syria. Non-US companies, however, may face difficult questions of interpretation. For example, companies may struggle to determine when information and communications technology will be considered “likely” to be used to facilitate computer or network disruption, monitoring, or tracking that could assist in or enable serious human rights abuses by or on behalf of the Government of Iran or the Government of Syria. Complicating that analysis is the fact that many information technology and communications systems have built-in capabilities that can be used for beneficial and benign purposes, yet also can be used for nefarious purposes. Thus, non-US companies may struggle to determine if all sales of information and communications products to Iran and Syria – and particularly to the governments of those countries – now will put them at risk of being designated under the GHRAVITY E.O. Even if non-US technology companies elect to cease doing business with Iran and Syria, risks remain that sales to other parties could trigger the prohibitions on materially assisting or supporting the restricted activities.
We will continue to monitor sanctions placed on Syria and Iran, as the situation may subject the countries to additional trade and financial restrictions.