by Patrick Briscoe
Export Controls and International Projects Officer
May 7, 2014
Lately you might have noticed how often trade sanctions are a topic of discourse in the news. How does the U.S. government respond to Russia’s involvement in Ukraine, one of the biggest foreign policy crises of the year? Sanctions. Why did the Dutch subsidiary of a Minnesota-based hospitality company recently pay a fine of nearly $6 million for booking trips to Cuba? Sanctions. Why was part-time ambassador Dennis Rodman in trouble for giving a fur coat and other luxury goods to North Korea’s First Family? No, not just PETA. Sanctions.
It might not be surprising to many that trade restrictions can affect more than government officials, multinational corporations, and sports stars with friends in high places. In early 2014, a U.S. educational non-profit that hosts massive online open courses (called “MOOCs” by people who apparently didn’t think to check a slang dictionary) had to block access from Cuba, Iran, and certain other countries. The reason? You guessed it—sanctions.
For the most part, U.S. economic sanctions take the form of the Foreign Assets Control Regulations, which are administered by the Treasury Department’s Office of Foreign Assets Control (OFAC). These regulations work in two ways, roughly speaking. First, they prohibit a diverse range of transactions involving targeted countries—as of May 2014, these are Cuba, Iran, North Korea, Sudan (North), and Syria. Second, the regulations prohibit transactions with individuals and organizations on OFAC’s Specially Designated Nationals and Blocked Persons List, which includes drug kingpins, terrorist groups, war criminals, proliferators of weapons of mass destruction, traffickers of conflict minerals, and maybe my first dentist.
Members of the university community are most likely to run into potential OFAC issues in one of three situations.
- Travel and exports involving sanctioned countries. The rules regarding travel (and what can be sent or taken) to and from Cuba, Iran, North Korea, Sudan, and Syria are elaborate, and vary by country. For example, spending money on mere travel to Cuba must be licensed by OFAC, but not so for travel to Sudan. Taking your own laptop to Cuba for personal use is permitted if your travel is licensed, but you may not take a laptop to Iran in most situations. You can bring Iranian pistachios back as gifts, but not Cuban cigars.
- Interactions with students or researchers who came from, and return to, sanctioned countries. Subject to a few limitations, OFAC regulations and related laws allow institutions to teach and employ students, researchers, and lecturers from sanctioned countries who have the necessary visas to be in the U.S. But once they return to their countries of origin, the full scope of economic sanctions applies and interactions become tightly restricted. Plans to collaborate with a researcher who moves home to Iran, for instance, might have to be modified or cancelled.
- Reviewing papers authored in sanctioned countries. To differing degrees, OFAC’s regulations prohibit the export of services to persons in Cuba, Iran, North Korea, Sudan, and Syria without authorization. Because commenting on an article authored in a sanctioned country is furnishing a service, this restriction has been relevant to many participants in the peer review process. And I mean “relevant” in the sense of “terrifying.” In fact, a few concerned organizations involved in academic research publication sued OFAC in 2007. As a result, the agency has authorized the peer review, editing, and publication of journal articles from Cuba, Iran, North Korea, and Sudan in most circumstances. Papers from Syria remain hot potatoes.
The civil penalties for violating OFAC’s regulations range from warning letters to fines in the thousands or even millions of dollars. For intentional violations that rise to the level of criminal misconduct, jail time is a distinct possibility.
The University of Minnesota is committed to compliance with all federal laws, even the complicated ones, including OFAC’s sanctions regulations. Please don’t hesitate to contact me at 612-625-3860 or email@example.com to discuss how these requirements might apply to your activities abroad and find solutions that keep us all on the right side of the law.