Iran Sanctions Look to Snap Back

By now you’ve heard the news, and it’s pretty much what it sounds like.

Following a wind-down period of 90 or 180 days, the U.S. government will restore the economic sanctions that it lifted under the 2015 nuclear deal. These sanctions generally affect foreign businesses who do business with Iran. After the wind-down periods, they can no longer do so without risking civil or criminal penalties.

In the meantime, here are some answers from the Treasury Department. Can you transact new business during the wind-down periods? It doesn’t say outright that you can’t, but the government will hold that against you if you blow the deadline. What if you take steps to wind down now but are still owed money after the 90 or 180 days? In a nutshell, you may continue to collect on a contract as long as you entered into it before May 8.

The 90-day period ends August 6, after which the U.S. will restore sanctions on the following:

  1. Selling or providing U.S. dollars to the Iranian government.
  2. Trading with Iran in gold or precious metals.
  3. Trading with Iran, directly or indirectly, in coal, steel, graphite, aluminum, other metals, and software for related industrial processes.
  4. Significant transactions to buy or sell Iran’s currency or significant funds or accounts denominated in it.
  5. Buying, subscribing to, helping issue the Iranian government’s debt.
  6. Iran’s automotive sector.

The end of the 90-day period will also revoke permission for the U.S. itself to do business with Iran in two ways: by importing Iranian carpets and foodstuffs and by exporting commercial passenger aircraft and related parts and services on a select basis.

The 180-day period ends November 4, after which the U.S. will restore sanctions on the following:

  1. Iran’s ports as well as its shipping and shipbuilding sectors.
  2. Buying oil and related products from Iran.
  3. Transactions by foreign banks with the Central Bank of Iran and other Iranian financial institutions.
  4. Providing insurance, reinsurance, or other underwriting services.
  5. Iran’s energy sector.
  6. Specific people and entities that had been removed from the U.S. list of blocked persons and interests.

The end of the 180-day period will also revoke permission for American-owned businesses located abroad to do business with Iran.

Stay tuned for more developments as the dust settles.

The Truth About Facebook

Ask this expert on data science what Congress should have asked Mark Zuckerberg last week, and she’ll say, nothing.

If that surprises you, please understand that these hearings are not designed to deliver the truth. They’re designed to tell the public that, if there’s a problem, the government is doing something about it. So you’re not gonna get much straight talk. It’s not that no one cares. But the problem is bigger than Facebook or the United States, as we’ve explained before.

And people have a right to know.

Now, I’m no data scientist, but I spend a lot of time on these issues in my line of work, so here are some basic truths you should know if they haven’t sunk in yet. I give the same advice to clients whenever it comes up.

  1. You are not the customer. You are the product. Their business is to derive as much information about you as possible and sell it to others. Governments like this, too, because it’s a great way to study people, keep tabs on them, and even manipulate them. No one will stop doing this for the foreseeable future.
  2. You should assume that you create a permanent record of everything you do on your phone or the internet. You can’t avoid that by logging out of an app or even deleting it. The only way may be to give up electronic devices altogether and live off the grid. And good luck with that.
  3. Your friends and family don’t decide what you see when you log in. Facebook does. Or whichever other company does. Obviously, they want to show you what they think you want to see so you’ll spend more time on their platform. But they can also manipulate what you see—or even what you think you want to see.

Welcome to the 21st century. It’s no wonder Americans are throwing up their hands over privacy. But at least we can still debate and, hopefully, decide how we want to live in the United States. The same does not apply around the world.


New Year’s Resolutions

Speaking of compliance, here are two businesses that ended the year resolving charges they violated U.S. trade sanctions by dealing with blocked countries, people, or entities.

Both cases show how the government enforces its sanctions regime, and they illustrate how an ounce of prevention can beat a pound of cure. Both cases were brought by the Office of Foreign Assets Control, or OFAC, which is an agency within the Department of Treasury.

The first case concerns a dental-supply company that agreed to pay $1.2 million to settle charges that it violated the Iranian Transactions and Sanctions Regulations. The government alleged that, from the end of 2009 through the middle of 2012, the company exported 37 shipments of dental equipment to distributors in other countries knowing, or having reason to know, they would end up in Iran.

According to the government, it wasn’t an egregious case because the exports were likely eligible for a license if the company had only applied for one. But it didn’t, and that ended up costing it a lot more on the back end.

The second case concerns a luxury-goods company that agreed to pay $300,000-plus to settle charges that it violated the Foreign Narcotics Kingpin Sanctions Regulations. The government alleged that, from October 2010 to April 2011, the company exported four shipments of jewelry to a Hong Kong entity that was on OFAC’s list of blocked persons and interests. The blocked entity’s name and address squarely matched those of the ship-to party, but the company didn’t flag the transaction before shipping the goods.

According to the government, this wasn’t an egregious case either, but if you add up the settlement costs and legal fees, it sure does eat into the margin.

Can They Search My Phone at the Border?

Suppose you go to visit your aunt in Italy, and you take your phone and tablet with you.

When you come back through customs, can they just search your devices willy nilly?

Probably. Here’s a good overview of your rights at the border, along with some practical considerations. It’s worth reading ahead of time because the government is stepping up its enforcement at points of entry, and there have been some heavy-handed run-ins lately between agents and travelers, including U.S. citizens.

The general rule is that customs and border agents may conduct routine, reasonable searches of you and your belongings, including your electronic devices, for any reason or no reason at all. They don’t need a warrant, and they don’t need any basis to believe they’ll find evidence of a crime. It’s known as the Fourth Amendment’s border-search exception.

But how far can they go?

Can they conduct full, forensic searches or force you to give up your passwords?

According to this 2009 policy memo, the answer is yes. It says agents can seize your device, copy its contents, and search them. To do so, they can hold a device for up to five days with a supervisor’s approval. For longer periods, they must get further approval at higher levels. Ordinarily, they must conduct the search in the presence of a supervisor, too, but if that’s not feasible, they must inform a supervisor about their search as soon as possible. If they find probable cause to believe your phone contains evidence of a crime, you may not get it back for a while, if at all. If they don’t, you should get your phone back eventually, and they’re supposed to destroy any copied information.

The law is evolving, however, to require at least a reasonable suspicion for a full forensic search. That’s already the case in the federal circuit that covers California and eight other states, and the law should continue to trend in that direction. What is a reasonable suspicion? It’s a particularized and objective basis for suspecting someone of a crime.

Still, reasonable suspicion is not a tough legal standard to meet.

Plus, agents can always just ask you to unlock your phone or give up your passwords, and if you refuse, they have plenty of ways to coerce you. They can take your phone; detain you, too; search your bags more thoroughly; deny you entry if you’re visiting; or scrutinize your green-card status. Most folks just want to be on their way.

So happy trails, traveler. Leave the phone, perhaps, but take the cannoli.

Vulnerability Is Not The Same As Failure

We borrow those words from this smart essay on national security that was written in the wake of the terrorist attacks in Brussels this spring.

The author is a former assistant secretary at the Department of Homeland Security and a current member of the Department’s Homeland Security Advisory Council. The Advisory Council consists of top leaders from the worlds of business, government, and academia who provide the Department with real-world, independent advice on homeland security. So the author knows something of what she speaks.

And her essay is worth a read. In it, she answers some of the earnest questions she’s been asked over the years by friends and family.

  • Should I buy a gun? “Only with training and safety measures at home, and certainly not to combat Islamic terrorists.”
  • Is Times Square safe on New Year’s Eve? “Like every crowd scene, you have to stay alert, but security is high at events like that.”
  • Is my family safe? “No, not entirely.”

What she means is that the government simply cannot reduce our vulnerabilities to zero, and even if it could, we wouldn’t want it to. Doing so would destroy the country we love and believe in and derail its great experiment with freedom. That experiment—for all its flaws and growing pains—was ahead of its time in the beginning, and it continues to serve as a model for the world today. The risks we tolerate, then, are not bad bargains just because an enemy can exploit them, and even as we try to minimize those risks and maximize our defenses, we must maintain our spirit.

But you should read her words for yourself.


The Price of Freedom is Eternal Vigilance

Antonin Scalia didn’t coin that expression, but the late Supreme Court Justice, who died one month ago, once delivered a speech that touched on a similarly uncomfortable notion.

Nearly two years to the day before his death, Scalia was speaking to a group of law students at the University of Hawaii, and he was asked about the Supreme Court’s infamous Korematsu decision from 1944. That’s the case in which the Court approved, by a 6-3 vote, the constitutionality of an executive order that forced the internment of all persons of Japanese descent, including American citizens.

Although Scalia unequivocally called the Court’s decision wrong, he also imparted the following admonition to his audience: “But you are kidding yourself if you think the same thing will not happen again.”

To explain himself, he referred to an older, Latin expression: “Inter arma enim silent leges … In times of war, the laws fall silent.”

And he went on to say, “That’s what was going on—the panic about the war and the invasion of the Pacific and whatnot. That’s what happens. It was wrong, but I would not be surprised to see it happen again—in time of war. It’s no justification but it is the reality.”

I wouldn’t be surprised, either, and I hope I’m wrong about that, but we’d be wrong to presume that it will never happen again because we’re so much better than we were or because we’ve evolved beyond our basic fears and instincts.

Sometimes, in fact, it seems we scare more easily than ever.

Whether or not you agree with Scalia on other points—and there’s plenty of grist for debate—the foregoing remarks reminded me that the price of freedom—and a better tomorrow—is eternal vigilance by this generation and every one to follow.

DOJ Posts New Policy on Stingrays

Well, what do you know.

Two weeks ago, we lamented the fact that law enforcement was using these electronic devices—commonly referred to as Stingrays, IMSI-catchers, or cell-site simulators—without search warrants and, often, in secret.

Then last Thursday, the U.S. Justice Department announced that, from now on, each of its agencies must obtain search warrants to use such devices, and the warrants must be supported by probable cause.

Furthermore, when agents do apply for a warrant, they must fairly disclose the nature of the technology as well as what they plan to do with it and how they plan to purge any data they pick up from non-target phones. If they use the device to locate a known phone, for example, they must delete that data once the phone is located and at least once per day. If they use the device to identify an unknown phone, they must delete that data once the phone is identified and at least every thirty days. And they must delete all prior operational data before each subsequent use.

Finally, the policy reaffirms that, even with a search warrant, agents may not use these devices to intercept the content of communications, like texts and emails, or other data like address books or contact lists. (That changes, of course, if they obtain a wiretap order.)

The policy applies to all instances in which the Department’s agencies—including the FBI, DEA, and ATF—use these devices to further their own criminal investigations, those of other federal agencies, or those of state and local agencies. It requires training and supervision before agents can use them, and it requires agencies to keep track of their use.

But the policy doesn’t apply to federal agencies outside the Justice Department or to state and local law enforcement, where a lot of the action is. If you’re wondering about your state, here’s a nifty map that offers the ACLU’s best guess on which local agencies are using them.

Nor does the policy apply to terrorism or national-security investigations.

Finally, the policy doesn’t apply in emergencies or in certain non-emergency circumstances that make it impractical to obtain a warrant, though other requirements still apply even then. See 18 U.S.C. § 3121 et seq. (codifying the federal pen register statutes).

Here’s a copy of the policy itself.

An Open Secret of Surveillance

From USA Today comes this report on law enforcement’s burgeoning use of so-called IMSI-catchers to conduct routine, mass surveillance.

If you haven’t heard of these devices, here’s a good, plain-English piece on them from NPR. The IMSI part stands for International Mobile Subscriber Identity, and an IMSI-catcher tricks your cell phone (and every other cell phone in the vicinity) into thinking it’s the cell tower with the best signal, so your phone connects. The device then takes your phone’s unique IMSI, pinpoints its location, and logs the numbers you call or text, the numbers that call or text you, and the time and duration of your calls. The models of today and tomorrow can also access the content of your communications and basically take over your phone.

The special problem that’s highlighted in the USA Today report is that, in many jurisdictions, the police appear to use these devices in routine, ordinary cases—without a warrant or any judicial review—even though the devices are purchased with federal money from grants tied specifically to national security and terrorism. That problem is compounded by the fact that police have taken great pains to conceal their use of these devices—or even their existence—from the public. In court filings, agents or officers have described them in vague or abstract terms like “sophisticated electronic equipment,” and in some cases, they’ve failed to refer to them at all. Instead, they may say they located a suspect’s phone without saying how, or they may suggest they just happened to be in the right place at the right time.

According to one legal expert, “The problem is you can’t have it both ways. You can’t have it be some super-secret national-security terrorist-finder and then use it to solve petty crimes.”

It’s an open secret at this point, however, and the tide of the law may be turning.

Big Brothers Are a Big Problem

As we pine for a digital Magna Carta or a digital Bill of Rights, the scale of the problem is daunting.

Part of the problem lies at home. It rears its head when the National Security Agency searches domestic calls, emails, and data that are “incidental” to its surveillance of foreign-intelligence targets but takes liberties in doing so. Or it arises when the NSA shares information from these special surveillance programs with domestic law-enforcement agencies who use it in their ordinary criminal investigations and lie about it. That story broke last August (as we covered here), but it may be the tip of the iceberg because this August, we learned that the NSA has created a “Google-like” search engine called ICREACH that gives 23 agencies, including the FBI and the DEA, access to its massive trove of records. It’s unclear how often ICREACH is used to facilitate ordinary, domestic criminal investigations. Or the problem arises at home when (and if) the NSA (or another agency) tries to intimidate those who report on these revelations. We’re better than that.

Part of the problem, however, lies abroad. It begins with the fact that the broader intelligence community that we exchange information with—the “IC” in ICREACH—includes foreign countries. Our agreements with five close allies form the Five Eyes: Canada, Australia, New Zealand, the United Kingdom, and the United States. Our looser agreements with a few other partners make up the Nine Eyes, which include the Five Eyes plus France, Denmark, Norway, and the Netherlands, and the Fourteen Eyes, which include the foregoing plus Germany, Spain, Sweden, Italy, and Belgium. These agreements may be necessary, but they threaten to gut all legal process because they permit each government to spy on its own citizens through the proxy of its foreign partners. One doesn’t even have to ask; one can just have a foreign partner offer the information, and at that point, what intelligence service worth its salt would say no?

Of course, we’re not just among friends in the world, either. We must contend, potentially, with every government in which major telecommunications companies do business. In June, for example, the world’s second-largest cellular carrier, Vodafone, published a report that revealed the millions of data requests it receives from governments all over the world. The company’s networks cover most of Europe and parts of Asia and Africa, including places like Egypt, Ghana, Kenya, Turkey, Qatar, and Mozambique. Some of the 29 countries in which Vodafone does business forbade the company from publishing their numbers, while six unspecified nations supplied no numbers because they didn’t need to make requests; they have “permanent access to customer communications via their own direct link.” If you’re wondering whether you read that right, you did. If you think that sounds like some governments tap directly into Vodafone’s data at will, well, you’re not alone.

Says one expert: “It is a healthy reminder that no amount of legal reform in the United States will solve the problem if there isn’t an international solution.”

Indeed. The problem is ubiquitous, and it may be coming to us all as the burgeoning surveillance industry makes advanced spying technology available worldwide, including commercially available worldwide, and ever more available over time. In the words of one concerned citizen, “Any tin-pot dictator with enough money to buy the system could spy on people anywhere in the world.” And that’s only the status quo.

So it’s an international problem that requires an international solution. And I’m afraid we’re not ready.

Leading Legal Minds Call for a Digital Bill of Rights

Federal inmates are not the only ones fighting for the right to confide in a lawyer.

Earlier this month, at the American Bar Association’s Annual Meeting in Boston, several leaders of national and international bar associations called for stronger coordination among lawyers to combat a growing sense of governmental surveillance attacks on the attorney-client privilege.

The leaders, whose panel was called Wiretapping of Attorney-Client Conversations: How Can Professional Secrecy be Protected?, discussed recent evidence of governmental wiretapping of law firms, including American law firms, as we’ve covered here before.

One of the panelists called for a “digital Magna Carta” that would serve as a “digital bill of rights in each country.” Apparently, that idea has also been put forth by the man who’s credited with inventing the World Wide Web. Another panelist described the attorney-client privilege as a “first defense against tyranny,” and another warned that its erosion threatens the rule of law and puts the underpinnings of democracy at stake.

The reference to a digital Magna Carta was especially apropos because the ABA’s Annual Meeting also kicked off its year-long commemoration of the 800th Anniversary of the Magna Carta. From November 6, 2014 through January 19, 2015, the Library of Congress will host one of the four surviving original copies of the document, and a traveling exhibit will tour the country through 2015 and beyond. The ABA’s own festivities will culminate on June 11-14, 2015 in London and Runnymede, where the original parchment was sealed on June 15, 1215.

To help launch the year-long commemoration, the Chief Justice of the U.S. Supreme Court, John Roberts, delivered an address to the ABA’s House of Delegates on August 11 in which he, too, called on lawyers to help defend the core values and principles that Magna Carta has come to symbolize as it’s been sewn into the fabric of our Constitution.

You can view a video of Justice Roberts’s speech here. You can follow the ABA’s further coverage of the privilege issue here. And you can find a translation of the text of Magna Carta from the original Latin here. Below are a few notable provisions from the document that came to stand for the notion that no one, not even the King, is above the law.

  • No man shall be forced to perform more service for a knight’s fee, or other free holding of land, than is due from it.
  • No sheriff, royal official, or other person shall take horses or carts for transport from any free man, without his consent.
  • No constable or other royal official shall take corn or other movable goods from any man without immediate payment, unless the seller voluntarily offers postponement of this.
  • For a trivial offence [sic], a free man shall be fined only in proportion to the degree of his offence, and for a serious offence correspondingly, but not so heavily as to deprive him of his livelihood.
  • In future no official shall place a man on trial upon his own supported statement, without producing credible witnesses to the truth of it.
  • No free man shall be seized or imprisoned, or stripped of his rights or possessions, or outlawed or exiled, or deprived of his standing in any other way, nor will we proceed with force against him, or send others to do so, except by the lawful judgement [sic] of his equals or by the law of the land.

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