[FULL TEXT IN ORIGINAL PDF]
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Extraterritoriality
The Court finds that the Indictment alleges a domestic nexus between Zarrab and his coconspirators' conduct and the United States, i.e. the exportation of services from the United States. See United States v. Banki, 685 F.3d 99, 106 (2d Cir. 2012), as amended (Feb. 22, 2012). Therefore, the question of whether the IEEPA and the ITSR apply extraterritorially need not be reached. See United States v. Mostafa, 965 F. Supp. 2d 451,469 (S.D.N.Y. 2013) ("[T]here is a sufficient domestic nexus between the allegations... to avoid the question of extraterritorial application altogether. Overt acts occmTed in the United States."). Assuming, arguendo, that the issue of extraterritoriality were to be reached, Zarrab's argument that IEEP A and ISTR do not apply extraterritorially would likely prove to be unpersuasive. Several provisions of the IEEPA and the ITSR...
1) See p. 140 of linked .pdf file for Decision & Order.
2) This was the first case in which the familiar way of penalizing non-U.S. persons for "causing" the processing of payments through the U.S. from outside of the U.S. was subject to judicial scrutiny. As with the typical bank fine, the theory here was that Zarrab "caused" a U.S. person bank to violate a provision of the ITSR that only applies to U.S. persons (here 560.204), but in doing so violated 560.203, which prohibits "causing" violations of the ITSR and, unlike the substantive prohibitions of the ITSR, has no jurisdictional limitation.
The key interpretive question was whether the basis for the substantive prohibitions of the ITSR, i.e. 50 U.S.C. § 1702(a)(1)(B) of the...