February 10, 2014

US Treasury Exempts Sanctions on Payments for Technology for Iranians

The Treasury Department’s Office of Foreign Assets Control in the Obama Administration has issued a General License to revoke sanctions related to some Internet services and equipment for personal communication use of Iranians. This action is a result of years of work by human rights and civil society organizations whose efforts to raise awareness have provided the groundwork for the decision.

After months of efforts by human rights and Internet freedom activists to revoke sanctions related to personal financial transactions to purchase Internet equipment and services, the Treasury Department’s Office of Foreign Assets Control has responded positively by issuing a General License for personal communications, enabling Iranians to purchase the aforementioned technology. According to this general license, the purchase of software, mobile applications, cell phone hardware, personal computers, and paying for web hosting and similar services are no longer sanctioned, and Iranian citizens are now able to purchase such equipment and services.

During the past four years, the International Campaign for Human Rights in Iran has pushed forward a comprehensive support program to enable Iranians to use safe modern technology and communications tools in order to combat digital censorship and the increasing restrictions imposed by their government. As a part of these supportive activities, the Campaign has joined together with other organizations to write letters to the Obama Administration asking for the issuance of financial authorization for Iranian citizens inside Iran to send funds to US companies to purchase hardware, software, and Internet and communication services—these services were removed from the sanctions list on May 30, 2013. One such letter, prepared by the Campaign, the National Iranian American Council, the Electronic Frontier Foundation, and Access, was sent to the Obama Administration on December 6, 2012; another, addressed to President Barack Obama, Secretary of State John Kerry, and Treasury Secretary Jack Lew, was sent September 23, 2013. This request was later also supported by the The Public Affairs Alliance of Iranian Americans, PAAIA, and by United4Iran, and since then these organizations have consistently pushed for its realization.

“Granting the ‘General License with Respect to Certain Services, Software, and Hardware Incident to Personal Communication’ was one of our requests of the Obama Administration, a request that has now been realized,” said Hadi Ghaemi, executive director of the International Campaign for Human Rights in Iran. “Revoking these sanctions and issuing the license is a product of consistent and effective teamwork of human rights, civil, and Internet freedom activists and a coalition of individuals who are aware of the harm such sanctions have brought on the basic rights of Iranian citizens, and have worked hard for this side-by-side with each other,” he added.

According to Item C of the General License, transfers of funds from Iran or for or on behalf of a person in Iran in to purchase Internet and communication equipment and services are legal, so long as they are consistent with Article 31 C.F.R. § 560.516 of the General License. Previously, the US Government had authorized such financial transactions for Iran for the purchase of medicine and food items.

Ali Akbar Mousavi Khoeini, former Deputy Chairman of the Iranian Parliament’s Telecommunications Committee and a researcher of information technology in Maryland, is one of the individuals who have pursued the removal of these sanctions. “Among the licenses issued for communication technology for Iran, I dare say receiving this license, which includes financial transactions and technical complexities and other sensitive issues, was one of the hardest cases we have witnesses over the recent years. It is necessary to thank the Obama Administration for paying attention to the reasoning provided by experts, and human rights organizations, Iranian-American organizations, or those who are active in the area of Internet freedom for sending letters and for their support, as well as experts such as Collin Anderson who helped this effort through fruition,” said Mousavi.

“It is now the Rouhani Government’s turn to pursue formal establishment of international credit cards such as MasterCard, Visa, and other online payment methods such as PayPal according to international regulations, so that Iranians can have easier access within this license to order these items and other items that have been excepted from the sanctions, such as medicine. It is now up to American Internet and computer companies such as Apple, MicroSoft, Cisco, and others to take action to receive the Iranian government’s authorization to provide their services directly to Iranian citizens,” said Ali Akbar Mousavi. “The difference between this license and the other licenses previously issued on May 30, 2013, is that the previous license only included free services and software and shipments of hardware as a gift and such. It must be pointed out that implementing this license will take a long time, but by removing its legal impediments a big step has already been taken,” said the former Member of the Iranian Parliament.

Effective February 7, 2014, transfers of funds from Iran or for or on behalf of a person in Iran in furtherance of an underlying transaction authorized by paragraph (a) may be processed by US depository institutions and US registered brokers or dealers in securities so long as they are consistent with 31 C.F.R. § 560.516.

“General License D-1 is a success story of what can be accomplished by the sustained, collaborative efforts of Iranian Internet users and international civil society organizations,” said Collin Anderson.

Collin Anderson, research and civil activist in the area of Internet freedom, and one of the individuals knowledgeable about these sanctions told the Campaign, “General License D-1 is a success story of what can be accomplished by the sustained, collaborative efforts of Iranian Internet users and international civil society organizations. In recent months, prominent bloggers and technologists inside of the country have written extensively on the chilling effects of sanctions on their ability to communicate to a domestic and global audience. At the same time, a diverse coalition of international civil society organizations, from across the political spectrum, came together to publicly and privately educate policy-makers and companies on how these restrictions feed into the Iranian government’s own repression of the free flow of information. These engagements and successes should serve as a model for how communities can defend the rights of the Iranian public through wide-reaching collaboration and communication. The work of this coalition will not stop at GL D-1, since real results will require international companies to respect the mandate set this week.”

The full text of the General License with Respect to Certain Services, Software, and Hardware Incident to Personal Communications is below.

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OFFICE OF FOREIGN ASSETS CONTROL

Iranian Transactions and Sanctions Regulations

31 C.F.R. Fart 560

GENERAL LICENSE D-1

General License with Respect to

Certain Services, Software, and Hardware Incident to Personal Communications

Effective February 7, 2014, to the extent that such transactions are not exempt from the prohibitions of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560 (“ITSR”), and subject to the restrictions set forth in paragraph (b), the following transactions are authorized:

(1) Fee-based services. The exportation or reexportation, directly or indirectly, from the United States or by a U.S. person, wherever located, to Iran of fee-based services incident to the exchange of personal communications over the Intemet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, and blogging.

(2) Fee-based software. (i) Software subject to the EAR. The exportation, reexportation, or provision, directly or indirectly, to Iran of fee-based software subject to the Export Administration Regulations, 15 C.F.R. parts 730 through 774 (the “EAR”), that is necessary to enable services 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, provided that such software is designated EAR99 or classified by the U.S. Department of Commerce on the Commerce Control List, 15 C.F.R. part 774, supplement No. 1 (“CCL”), under export control classification number (“ECCN”) 5D992.C.

(ii) Software that is not subject to the EAR because it is of foreign origin and is located outside the United States. The exportation, reexportation, or provision, directly or indirectly, by a U.S. person, wherever located, to Iran of fee-based software that is not subject to the EAR because it is of foreign origin and is located outside the United States that is necessary to enable services 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, provided that such software would be designated EAR99 if it were located in the United States or would meet the criteria for classification under ECCN 5D992.C if it were subject to the EAR.

NOTE TO PARAGRAPHS (a)(1) AND (a)(2): See 31 C.F.R. § 560.540 for authorizations relating to the exportation to persons in Iran of no-cost services incident to the exchange of personal communications over the Internet and no-cost software necessary to enable such services.

(3) Additional Software, Hardware, and Related Services. To the extent not authorized by paragraph (a)(1) or (a)(2), the exportation, reexportation, or provision, directly or indirectly, to Iran of certain software and hardware incident to personal communications, as well as related services, as follows:

(i) in the case of hardware and software subject to the EAR, the items specified in the Annex to this general license;

(ii) in the case of hardware and software that is not subject to the EAR because it is of foreign origin and is located outside the United States that is exported, reexported, or provided, directly or indirectly, by a U.S. person, wherever located, hardware and software that is of a type described in the Annex to this general license provided that it would be designated EAR99 if it were located in the United States or would meet the criteria for classification under the relevant ECCN specified in the Annex to this general license if it were subject to the EAR; and

(iii) in the case of software not subject to the EAR because it is described in 15 C.F.R. § 734.3(b)(3) that is exported, reexported, or provided, directly or indirectly, from the United States or by a U.S. person, wherever located, software that is of a type described in the Annex to this general license.[1]

NOTE TO PARAGRAPHS (a)(2) AND (a)(3): The authorizations in paragraphs (a)(2) and (a)(3) include the exportation, reexportation, or provision, directly or indirectly, to Iran of authorized hardware and software by an individual leaving the United States for Iran.

(4) Internet connectivity services and telecommunications capacity. The exportation or reexportation, directly or indirectly, from the United States or by a U.S. person, wherever located, to Iran of consumer-grade Intemet connectivity services and the provision, sale, or leasing of capacity on telecommunications transmission facilities (such as satellite or terrestrial network connectivity) incident to personal communications.

NOTE TO PARAGRAPH (a)(4): See 31 C.F.R. § 560.508 for authorizations relating to transactions with respect to the receipt and transmission of telecommunications involving Iran.

(5) Importation into the United States of hardware and software previously exported to Iran. The importation into the United States of hardware and software authorized for exportation, reexportation, or provision to Iran under 31 C.F.R. § 560.540(a) or paragraphs (a)(2) and (a)(3) of this general license by an individual entering the United States, directly or indirectly, from Iran, provided that the items previously were exported, reexported, or provided by the individual to Iran pursuant to 31 C.F.R. § 560.540(a) or paragraphs (a)(2) and (a)(3) of this general license.

(6) Publicly available,[2] no cost services and software to the Government of Iran.[3] (i) Services. The exportation or reexportation, directly or indirectly, from the United States or by a U.S. person, wherever located, to the Govemment of Iran of services described in 31 C.F.R. § 560.540(a)(1) or categories (6) through (11) of the Annex to this general license, provided that such services are publicly available at no cost to the user. (ii) Software. The exportation, reexportation, or provision, directly or indirectly, to the Govemment of Iran of software described in 31 C.F.R. § 560.540(a)(2) or categories (6) through (11) of the Annex to this general license, read in conjunction with paragraph (a)(3) of this general license, provided that such software is publicly available at no cost to the user.

NOTE 1 TO PARAGRAPH (a): In sub-paragraph (a)(6), the term “publicly available” refers generally to software that is widely available to the public. Sub-paragraph (a)(3)(iii) refers to software that is described in 15 C.F.R. § 734.3(b)(3), which defines “publicly available” software for purposes of the EAR. The scope of the term “publicly available” in paragraph (a)(6) of this general license thus differs from the scope of the Department of Commerce’s regulation at 15 C.F.R. § 734.3(b)(3) as referenced in subparagraph (a)(3)(iii) of this general license.

NOTE 2 TO PARAGRAPH (a): The authorizations of U.S. persons set forth in paragraph (a) extend to entities owned or controlled by a U.S. person and established or maintained outside the United States (“U.S.-owned or -controlled foreign entities”), subject to the conditions set forth in 31 C.F.R. § 560.556

NOTE 3 TO PARAGRAPH (a): Nothing in this general license relieves the exporter from compliance with the export license application requirements of another Federal agency.

(b) This general license does not authorize:

(1) The exportation, reexportation, or provision, directly or indirectly, of the services, software, or hardware specified in paragraph (a) with knowledge or reason to know that such services, software, or hardware are intended for the Govemment of Iran, except for services or software specified in paragraph (a)(6).

(2) The exportation, reexportation, or provision, directly or indirectly, of the services, software, or hardware specified in paragraph (a) to any person whose property and interests in property are blocked pursuant to any part of 31 C.F.R. chapter V, other than persons whose property and interests in property are blocked solely pursuant to Executive Order 13599 as the Government of Iran.

(3) The exportation or reexportation, directly or indirectly, of commercial-grade Intemet connectivity services or telecommunications transmission facilities (such as dedicated satellite links or dedicated lines that include quality of service guarantees).

(4) The exportation or reexportation, directly or indirectly, of web-hosting services that are for commercial endeavors or of domain name registration services.

(5) Any transaction by a U.S.-owned or -controlled foreign entity otherwise prohibited by 31 C.F.R. § 560.215 if the transaction would be prohibited by any other part of chapter V if engaged in by a U.S. person or in the United States

(6) Any action or activity involving any item (including information) subject to the EAR that is prohibited by, or otherwise requires a license under, part 744 of the EAR or participation in any transaction involving a person whose export privileges have been denied pursuant to part 764 or 766 of the EAR, without authorization from the Department of Commerce.

(c) Effective February 7, 2014, transfers of funds from Iran or for or on behalf of a person in Iran in furtherance of an underlying transaction authorized by paragraph (a) may be processed by U.S. depository institutions and U.S. registered brokers or dealers in securities so long as they are consistent with 31 C.F.R. § 560.516.[4]

(d) Specific licenses may be issued on a case-by-case basis for the exportation, reexportation, or provision of services, software, or hardware incident to personal communications not specified in paragraph (a) or the Annex to this general license.

(e) Effective February 7, 2014, GL D-1 replaces and supersedes in its entirety GL D, dated May 30, 2013

[1] See Note 1 to paragraph (a).

[2] See Note 1 to paragraph (a).

[3] See 31 C.F.R. § 560.304.

[4] * This general license does not authorize any transaction prohibited by any part of chapter V of 31 C.F.R. other than part 560. Accordingly, the transfer of funds may not be by, to, or through any of the following: (1) a person whose property and interests in property are blocked pursuant to the Weapons of Mass Destruction Proliferators Sanctions Regulations, 31 C.F.R. part 544, or the Global Terrorism Sanctions Regulations, 31 C.F.R. part 594; or (2) a person whose property and interests in property are blocked pursuant to any other part of 31 C.F.R. chapter V, or any Executive order, except an Iranian fmancial institution whose property and interests in property are blocked solely pursuant to 31 C.F.R. part 560.