Last week the U.S. Attorneys Office prosecuting Masood Habibion, Mohsen Motamedian and Online Micro, LLC for, among other charges, violations of the Iranian Transactions Regulations (ITR) submitted proposed jury instructions to the United States District Court for the District of Columbia. Within those proposed jury instructions, the Government sought to clarify the phrase “willful violation of export control laws.”
In their proposed jury instructions, the government set out four (4) elements which must be satisfied for finding that the defendants engaged in a “willful violation of export control laws.” Those elements are as follows:
1. That the defendants exported goods from the United States to Iran, through the United Arab Emirates;
2. That the defendants acted willfully;
3. That a license was required from the Office of Foreign Assets Control (OFAC) before exporting the goods; and
4. That the defendants did not obtain the necessary license.
What is much more interesting than these elements, however, is the clarification the government proposed for the term “willful.” In their proposed jury instructions, the government stated that, “[the] government must prove beyond a reasonable doubt that the conduct alleged of the defendants…..was undertaken with the defendant’s knowledge that the export was unlawful. A finding that a defendant engaged in conduct with the intent to export goods to Iran is, by itself, insufficient to sustain a finding of guilt. The government must prove that the defendant engaged in the conduct with the intent to violate a known legal duty, that is, with knowledge of illegality.”
I was actually impressed with this portion of the jury instruction and thought that the government had offered a very fair standard for determining willfulness. My elation, however, passed once I read the next paragraph. According to the government’s proposed instruction, “While the government must show that the defendant knew that his conduct was illegal……..in this case, the government is not required to prove that any defendant had read, was aware of, or had consulted the relevant Iranian Transactions Regulations, including the licensing requirement in those regulations. The government, however, must prove beyond a reasonable doubt that the defendant knew that his conduct was unlawful. At all times relevant to this case, it was unlawful to export goods from the United States to Iran, either directly or indirectly, without prior approval in the form of a license issued by the Office of Foreign Assets Control in the Department of the Treasury.”
I think the language of this second paragraph confuses the issues as it suggests that the illegality of the conduct is directly tied to the exportation without a license, not merely the exportation itself. At the same time, the government states that the defendants must have known that their conduct was unlawful, but they did not need to be “aware of” the licensing requirement in the relevant regulations. However, if they were unaware of the licensing requirement, they couldn’t have known their conduct was unlawful because they wouldn’t have known that they needed a license. So in that case to have unlawfully exported without a license they must have been “aware of” a licensing requirement.
I think what the government is really shooting for here, and as they accurately state earlier in the instruction, is that the illegal conduct is the export of products to the U.A.E. with knowledge that they would then be shipped to Iran. However, the government’s comment about OFAC licenses later in the jury instruction could cause a juror to be confused as to whether the government is stating that the unlawful conduct is exporting to Iran without a license, as opposed to just exporting to Iran. I look forward to seeing how Judge Huvelle rules on this proposed instruction.
The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or firstname.lastname@example.org.