Civil Enforcement Information - Diversified Business Communications

Date issued: Jan. 04 2008

TURBOFAC Commentary (213 words)

Notes:

1) Irregular fact pattern. OFAC considers the provision of the service to the Iranian entity to be considered an export of a service "to Iran," even though the entire transaction may have taken place outside of Iran.

As is the case with services provided to Iranian individuals ordinarily resident in Iran but located in a third country, OFAC considers a service to be exported "to Iran" (560.204) when the entity or individual is "in Iran" (560.410), and where "in Iran" is a function of the domicile of the entity or individual. Compare Case No. IA-2013-300441-1 and Case No. IA-2015-319421-1.

2) See also 560.215 (Prohibitions on foreign entities owned or controlled by U.S. persons), and comments thereto. "For purposes of paragraph (a) of this [560.215], a person is 'subject to the jurisdiction of the Government of Iran' if the person is organized under the laws of Iran or any jurisdiction within Iran, ordinarily resident in Iran, or in Iran, or owned or controlled by any of the foregoing."

3) In the Penalty Notice, OFAC rejects what appears to be an argument that the exhibition-related transaction was ordinarily incident to or somehow within the scope of the now-repealed GL for the purchase of Iranian-origin foodstuffs.