Archive for the ‘Sanctions’ Category

Texas Man Sentenced to 6 years in Prison for Cuba Embargo Violations

2018/10/30

By: Danielle Hatch

Bryan Evan Singer, 46, of Bryan Texas was sentenced to 6.5 years in prison on September 27, 2018 for attempting to export electronic devices to Cuba. On May 2, 2017 Singer was traveling from Stock Island, Florida to Havana, Cuba via his boat “La Mala” when law enforcement stopped him to conduct an outbound inspection of the boat. During the inspection, Singer explained that he was only taking items to Cuba that were on the deck of his boat and that the value of the items was less than $2,500 (possibly suspicious or a red flag). Law enforcement continued to search the boat and found a hidden compartment under a bolted down bed in the cabin where they discovered over $30,000 worth of electronic devices. Of those devices, there were 300 Ubiquiti Nanostation Network devices which allow for highly encrypted connections between computer networks over long distances, making a license required to export them to Cuba.

Singer did not apply for a license for the items…in case you didn’t already guess that.

Justice: https://www.justice.gov/usao-sdfl/pr/texas-resident-sentenced-south-florida-more-6-years-prison-violations-cuban-embargo


OFAC Reaches $5 Million Settlement with JPMorgan Chase Bank

2018/10/30

By: Danielle Hatch

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced this month that it had reached a $5,263,171 settlement with JPMorgan Chase Bank, N.A. for 87 violations of the Cuban Assets Control Regulations, the Iranian Transactions and Sanctions Regulations, and the Weapons of Mass Destruction Proliferators Sanctions Regulations.

The transactions were net settlement payments with a very small portion being provided to the interests of airlines that were on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List), blocked pursuant to OFAC sanctions, or located in countries subject to OFAC sanctions. The transactions included airline freight charges which are not exempt from the prohibitions of the International Emergency Economic Powers Act (IEEPA).

On a separate issue, OFAC issued a Finding of Violation to JPMC for violations of the Foreign Narcotics Kingpin Sanctions Regulations and the Syrian Sanctions Regulations. Between 2011 and 2014 JPMC processed 85 transactions worth $46,127.04 held accounts on behalf of six customers who were on the SDN list.

In both situations JPMC voluntarily disclosed the violations and they were considered to be non-egregious violations by OFAC.

Settlement Agreement: https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20181005.aspx


Epsilon vs. OFAC: Third Party Risks & “Reason to Know”

2018/10/30

By: Danielle Hatch

Before I get to the nitty gritty of this case its important to remember that companies can be held liable for sanctions violations when they export a product to a third-party in another country and know or have reason to know that the third party intends to reexport their product to Iran. Companies must do their due diligence to make sure that that third party who is receiving their products isn’t planning on sending them to Iran. Now that that’s out of the way, let’s get started.

Note: This case was between the Office of Foreign Assets Control (OFAC) and Epsilon Electronics but Power Acoustik Electronics who is a subsidiary of Epsilon who engaged in the transactions in question.

Epsilon Electronics, also doing business as Power Acoustik Electronics, Sound Stream, Kole Audio, and precision Audio has agreed to pay $1.5 million to OFAC to settle the enforcement case related to alleged violations of the Iranian Transactions and Sanctions Regulations (ITSR). OFAC’s Penalty Notice alleged that Epilson violated the ITSR when it issued 39 invoices for sales to Asra Internationals LLC from 2008 to 2012 because Epsilon knew or had reason to know that Asra was distributing its products to Iran.

In 2008 OFAC found out that Power Acoustik exported items to an address in Iran. OFAC issued a subpoena and eventually sent the company a cautionary letter in 2012. During a separate investigation, OFAC uncovered wire transfers from Asra International (company located in Dubai) to Power Acoustik totaling more than $1.1 million between 2010 and 2011. OFAC believed that these wires may have been for products that were destined to Iran and they issued another subpoena to Power Acoustik. The company explained that they had 41 sales of audio and video equipment to Asra between 2008 and 2012 which explained the wire transfers. During a further investigation, OFAC did not directly find any proof that any of the equipment was reexported to Iran by Asra but they did find a website for Asra that specified that the company provided car audio and video products to Iran. The Iran affiliate’s address on Asra’s website was the same address as the 2008 address that OFAC initially sent a subpoena to Power Acoustik for, related to the illegal shipment.

OFAC then issued a Penalty Notice to Epsilon for $4 million based on 34 non-egregious violations (those that occurred before the 2012 cautionary letter) and 5 egregious violations (occurred after the cautionary letter). Epsilon challenged OFAC’s Penalty Notice in the US District Court for the District of Columbia and lost. The company than appealed the order to the US Court of Appeals for the District of Columbia which affirmed the 34 non-egregious violations but reversed the 5 egregious violations to be non-egregious changing the penalty from $4 million to $1.5 million. The Court of Appeals found that an exporter may be found liable if it exports goods from the US to a third country, with reason to know that those goods are specifically intended for reexport to Iran, even if they never make it to Iran. The “reason to know” requirement for OFAC can be established “through a variety of circumstantial evidence” including “course of dealing, general knowledge of the industry or customer preferences, working relationships between parties, or other criteria far too numerous to enumerate.”

Up until 2011, Asra distributed to Iran exclusively, making the evidence on their website evidence for OFAC that Power Acoustik could have reasonably inferred that Asra only distributed its products to Iran. The Court of Appeals found that the final five exports didn’t fit the “reason to know” standard because OFAC did not address several emails between Acoustik’s sales team and an Asra manager between 2011-2012 which explained that their products were going to be sold from Asra’s new retail store in Dubai…causing the 5 violations to be changed.

OFAC saw the following as aggravating factors:

  1. The alleged violations constituted or resulted in a systematic pattern of conduct
  2. Epsilon exported goods valued at $2,823,000 or more
  3. Epsilon had no compliance program at the time of the alleged violations

OFAC considered the following to be mitigating factors:

  1. Epsilon has not received a Penalty Notice or a Finding of Violation in five years preceding the transactions that gave rise to the alleged violations
  2. Epsilon is a small business
  3. Epsilon provided some cooperation to OFAC, including entering into an agreement to toll the statute of limitations for one year

The important take away from this case is that, as most people already know, there is a very far-reaching interpretation of what constitutes “reason to know” when dealing with third parties and Iran (and Cuba).

Enforcement Details: https://www.treasury.gov/resource-center/sanctions/CivPen/Documents/20180913_epsilon.pdf


State Department Adds to CAATSA List

2018/10/29

Countering American’s Adversaries Through Sanctions Act of 2017 (CAATSA) allows sanctions to be imposed on persons that knowingly, engage in a significant transaction with a person that is part of, or operates for or on behalf of, the defense or intelligence sectors of the Government of the Russian Federation.

The Chinese entity, Equipment Development Department of the Central Military Commission (EDD) formerly known as the General Armaments Department (GAD) has been added after engaging in a significant transaction with a person that is connected to the defense or intelligence sectors of the Government of the Russian Federation.

The Secretary of State is also updating the previously issued guidance to specify additional persons:

Section 231(d) List Regarding the Defense Sector of the Government of the Russian Federation

  • Komsomolsk-na-Amur Aviation Production Organization (KNAAPO)
  • Oboronlogistika, OOO
  • PMC Wagner

Section 231(d) List Regarding the Russian Intelligence Sector of the Government of the Russian Federation

  • Antonov, Boris Alekseyevich
  • Aslanov, Dzheykhun Nasimi Ogly
  • Badin, Dmitriy Sergeyevich
  • Bogacheva, Anna Vladislavovna
  • Bovda, Maria Anatolyevna
  • Bovda, Robert Sergeyevich
  • Burchik, Mikhail Leonidovich
  • Bystrov, Mikhail Ivanovich
  • Concord Catering
  • Concord Management and Consulting LLC
  • Gizunov, Sergey Aleksandrovich
  • Internet Research Agency LLC
  • Kaverzina, Irina Viktorovna
  • Korobov, Igor Valentinovich
  • Kovalev, Anatoliy Sergeyevich
  • Kozachek, Nikolay Yuryevich
  • Krylova, Aleksandra Yuryevna
  • Lukashev, Aleksey Viktorovich
  • Malyshev, Artem Andreyevich
  • Morgachev, Sergey Aleksandrovich
  • Netyksho, Viktor Borisovich
  • Osadchuk, Aleksandr Vladimirovich
  • Podkopaev, Vadim Vladimirovich
  • Polozov, Sergey Pavlovich
  • Potemkin, Aleksey Aleksandrovich
  • Prigozhin, Yevgeniy Viktorovich
  • Vasilchenko, Gleb Igorevich
  • Venkov, Vladimir
  • Yermakov, Ivan Sergeyevich
  • Yershov, Pavel Vyacheslavovich

Federal Register Notice: https://www.govinfo.gov/content/pkg/FR-2018-10-05/pdf/2018-21684.pdf


French Lender Has Been Saving for $1.27 Billion in US Sanctions Penalties

2018/09/27

By: Danielle Hatch

French multinational bank, Société Générale (SocGen) has released a statement that the lender believes it will be reaching a resolution in the coming weeks related to transactions it processed related to persons subject to US sanctions. The bank has been setting aside funds to cover the penalties since 2017 and they believe they have done it. In their statement, SocGen says that they expect the US penalty of 1.2 Billion to be, “almost entirely covered” by the provisions it’s been saving.

In June, SocGen agreed to pay $1.3 billion to authorities in the US and France to end disputes over transactions related to Libya and over the suspected rigging of Libor, an interest rate used in contracts worth trillions of dollars globally. The bank’s CEO at that time, Didier Valet, was released as part of the settlement.

ScoGen has also already paid 963 million euros in 2017 to settle disputes with the Libyan Investment Authority, a sovereign wealth fund.

A little background related to fines related to banks and sanctions penalties: In 2015, Credit Agricole SA (France’s second largest bank), paid $787 million in fines to cover a similar sanctions case. Four years ago, BNP Paribas SA plead guilty to charges related to transactions involving Iran, Cuba and Sudan and they paid $9 billion.

Statement: https://www.societegenerale.com/sites/default/files/regulated_information_090418.pdf


Swedish Telecom Company Pays Penalty for Sanctions Violation

2018/08/30

By: Thad McBride on July 19, 2018

Thad McBride is a member at Bass, Berry & Sims PLC (Washington, DC) and leads the firm’s International Trade Practice Group. He regularly counsels clients on compliance matters related to economic sanctions and embargoes, export controls, CFIUS, US anti-boycott controls, customs, and other import controls. In addition, he guides clients through internal audits and investigations and represents companies facing government investigations and enforcement actions. He is a regular contributor to the firm’s Government Contracts and International Trade blog and can be reached at tmcbride@bassberry.com

POSTED IN INTERNATIONAL TRADESANCTIONS (OFAC)

  • Ericsson Caused Violation by Having U.S. Party Ship Equipment to Sudan
  • U.S. Employee Facilitated Sudan Business
  • OFAC Expects Parties Conducting International Business to Have Robust Compliance Processes

In June 2018, the U.S. Treasury Department, Office of Foreign Assets Control (OFAC) announced that Ericsson, a Swedish telecommunications company, agreedto pay approximately $145,000 for violating U.S. sanctions on Sudan.  Among other things, this is one of the few OFAC enforcement actions explicitly premised on a non-U.S. actor causing a U.S. company to violate U.S. sanctions.

Non-U.S. Companies Can Violate Sanctions If They Cause a Violation

According to OFAC, the violations involved Ericsson, AB (EAB), which is based in Sweden, causing a U.S. seller of a satellite hub to export that hub from the United States to Sudan.  Interestingly, in connection with EAB’s purchase of the satellite hub, an EAB employee communicated about the matter with Ericsson’s compliance department.  In those communications, the EAB employee was informed that the purchase of the satellite would violate Ericsson’s sanctions compliance policy.

Yet the EAB employee proceeded with the acquisition, with support from an Ericsson employee in the United States.  OFAC asserted that the two Ericsson employees agreed to identify “Botswana” as the destination of the satellite hub.  The EAB employee then structured the acquisition so that the satellite hub was shipped through several other countries, including with help from a third party in Lebanon, before eventually arriving in Sudan.

U.S. Employee Facilitated Transaction by Supporting the Sudan Business

It appears that, when the Ericsson U.S. employee was first contacted by his counterparts at EAB, he informed them that he could not be involved in any Sudan business.  But subsequently, he did assist his EAB counterparts by providing technical guidance related to the Sudan project.  (The U.S. employee sent one e-mail related to Sudan in which “East Africa” was listed as the subject of the e-mail.)  The U.S. employee also met in person with an EAB employee to discuss the project.

There is no indication that the U.S. employee had any role in purchasing or shipping the satellite hub to Sudan.  Nonetheless, by providing guidance and advice about the Sudan project, the U.S. employee facilitated that project and thereby violated U.S. sanctions on Sudan.  Like other U.S. sanctions programs, under U.S. sanctions on Sudan, U.S. persons were prohibited from indirectly supporting (or facilitating) a project in Sudan that the U.S. person could not engage in directly.

Conduct Occurred Well Before Recent Lifting of U.S. Sanctions on Sudan

As we have discussed in prior blog posts (see this January 2018 blog post), it typically takes a long time for OFAC to impose penalties for sanctions violations.  The conduct at issue in the Ericsson matter occurred in 2011 and 2012.  Ericsson tolled the statute of limitations during OFAC’s investigation of the matter.

In fact, by the time Ericsson agreed to settle the matter, U.S. sanctions on Sudan had been lifted.  However, the U.S. government does maintain export controls on Sudan under the Export Administration Regulations.  As a result, an export license is needed to export most U.S.-origin items to Sudan, even though economic sanctions have been lifted.

This illustrates one of the practical challenges for U.S. companies considering business in Sudan.  Discussions about that business and even the provision of business services are generally permitted without a license.  Actual exports of products still usually require a license.  So Sudan is not entirely open for business from a U.S. perspective.

Compliance Is Complicated, Appropriate Resources Are Needed

The compliance narrative in this matter is jumbled.  As detailed above, the Ericsson compliance department advised the EAB employee – correctly – about the potential liability associated with Sudan business.  The U.S. employee of Ericsson originally responded to requests related to Sudan by stating his inability to work on a Sudan project.  Yet both the EAB employee and the Ericsson U.S. employee proceeded with the Sudan business.

This seems on its face like a situation in which company employees went rogue.  Notably, the company disclosed the violation to OFAC, which is one reason that OFAC imposed a penalty well below the statutory maximum amount (roughly $360,000).

Yet in imposing any penalty, OFAC indicates that Ericsson could have done better.  In particular, in the press release related to the matter, OFAC states the following:

This enforcement action highlights the importance of empowering compliance personnel to prevent transactions prohibited by U.S. economic and trade sanctions.  Entities should ensure their sanctions compliance teams are adequately staffed, receive sufficient technology and other resources, and are delegated appropriate authority to ensure compliance efforts meet an entity’s risk profile.

The Bass, Berry & Sims international trade team works closely with clients to assess their risks and put in place effective, cost-efficient measures to prevent and detect trade compliance violations.  OFAC clearly expects such measures.  Feel free to contact us anytime if we can assist in developing and implementing them.


Sanctions in Name Only Imposed on Russia for Nerve Gas Attack

2018/08/30

(Source: Export Law Blog, 8 Aug 2018. Reprinted by permission.)

By: R. Clifton Burns, Esq., Bryan Cave LLP, Washington DC, Clif.Burns@bryancave.com, 202-508-6067.

Clif Burns, Bryan Cave Leighton Paisner, Washington, DC. Copyright Clif Burns 2018

According to a State Department press release released today, the United States has made a determination that Russia used novichok, a chemical warfare agent, in an attack on British soil and, as a result, the US will impose sanctions on Russia under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (the “CBWC Act”), 22 U.S.C. § 5601 et seq.  The text of these sanctions was not released.  Instead, the text will be in a Federal Register notice expected to be published on or around August 22.  The sanctions will be effective as of the date of the publication of that notice.

Because these sanctions are being imposed under the CBWC Act, we can already get a good idea of what these sanctions will be.   The Act contemplates sanctions being imposed in two stages.  The first stage, described in section 5605(a), sets forth the following sanctions, all of which are required to be imposed upon the offending country:

  • Termination of all foreign assistance
  • Termination of all arms sales
  • Termination of all foreign military financing
  • Denial of U.S. government credit or assistance
  • Termination of all exports of items controlled on the Commerce Control List for NS reasons

To be honest, none of these sanctions will have any significant impact on Russia.  Arms sales to Russia have been prohibited for some time now.   The country chart already has Russia controlled for both columns of NS controls.  Of course, you could say that the new sanctions will mean that NS items will not be considered for licenses under any circumstances.  But I don’t think licenses to export NS items to Russia are being readily granted now.

The second stage, if it happens, would take place on November 8 of this year unless the President determines that Russia is no longer using chemical or biological weapons.  If that determination is not made, the President is required to impose three sanctions from a set of six possible sanctions.  Those six possible sanctions are:

  • Opposing multilateral bank financial assistance to Russia
  • Prohibition of U.S. bank loans to the government of Russia
  • Prohibition of all exports of all U.S. goods and technology to Russia
  • Downgrading or suspending diplomatic relations with Russia
  • Termination of all service to and from the United States by Russian airlines

Whether the President will make the findings necessary to impose this second stage and which three of the six will be imposed is anyone’s guess, although I suspect that most people likely have a pretty good guess.   The upcoming Federal Register notice will probably not even address the second stage sanctions.   If the United States does in fact impose the three second stage sanctions, the best guess is probably that he will impose the least restrictive of those, i.e., opposing multilateral bank loans, prohibiting U.S. bank loans, and expelling a few more diplomats.

 


Use Caution: Air Cargo Industry Experiences Increasing Compliance Regulations

2018/06/29

By: Ashleigh Foor

(Source: Bobsguide, 29 May 2018.)

Air cargo industry, be warned: regulations are ever-increasing in 2018, leading to more fines and penalties for those involved in illegal trade. A Maersk company recently violated international sanctions by carrying arms components with the potential for military use from North Korea to Egypt. This is just one example of what appears to be a lack of strong compliance procedures that diligently screen parties, goods, and destinations involved in a transport.

The use of air cargo continues to increase as it is the fastest means of transport for sending goods all over the world, but with many high profile sanctions breaches in the news many are left wondering if the industry can abide by these increasing regulations while still fulfilling the need for speedy exports. These new levels of regulation are due to the air cargo industry being used to launder money and fulfill terrorist objectives. Air cargo companies are currently required to check Airway Bills (AWBs) against sanctions and dual-use goods watch lists. Noncompliance can lead to hefty fines, loss of export/import privileges, along with reputational damage and even prison time.

The air cargo industry is in danger of losing its competitive advantage – speed – due to the burden of compliance regulations. The International Air Transport Association (IATA) believes that if these increased regulations are not dealt with and followed efficiently then costs will increase – slowing transit and hurting the industry’s unique selling point.

Currently, around 50% of AWBs globally are still processed on paper rather than electronically (e-AWBs). IATA is highly recommending a change from outdated paper-based processes to automated and digital screening solutions so that airway bills are verified with speed and accuracy. Companies that still rely on manual checks are at an immediate disadvantage.

One air cargo company leading the way in overhauling its compliance processes is Lufthansa Cargo. They have implemented a digital sanctions and dual-use goods screening engine that automatically checks cargo documentation to identify any irregularities that could pose a risk. The technology scans descriptions of goods to identify if they have the potential for military use as well as checks origin and destination locations to confirm the cargo is not moving to or from a sanctioned territory.

With all of the changes taking place and scandals in the headlines recently, automation and digitization of processes are not simply great goals to strive towards – they’re expected and necessary for staying compliant. Air cargo companies must evolve to meet higher regulatory requirements, and ultimately, to do their part in protecting global security.


Turkish Banker Receives 32 Months for Violating U.S. Sanctions Against Iran Involving Billions of Dollars

2018/05/30

By: Ashleigh Foor

On January 3, 2018, a five-week jury trial wrapped up and convicted Mehmet Hakan Atilla, 47, a resident and citizen of Turkey, to 32 months for conspiring with others in a scheme to violate U.S. economic sanctions imposed on the Islamic Republic of Iran. The violation involved billions of dollars’ worth of Iranian oil proceeds held at Atilla’s employer (Turkish Bank-1).

Atilla, a Turkish banker, Reza Zarrab, an international gold trader, and others defrauded U.S. financial institutions by using them to conduct transactions on behalf of the government of Iran and other Iranian entities which were barred by U.S. sanction. They did so by making these transactions falsely appear as if they involved food, therefore falling within humanitarian exceptions to the sanctions regime.

Atilla lied to U.S. Treasury officials about Turkish Bank-1’s activities and its supposed compliance efforts to avoid subjecting the bank to U.S. sanctions. Atilla and his co-conspirators’ deceptions led U.S. banks to unknowingly process international financial transactions in violation of the IEEPA, and to launder through the U.S. financial system funds promoting the scheme.


Summary of the Presidential Memorandum: “Ceasing U.S. Participation in the JCPOA and Taking Additional Action to Counter Iran’s Malign Influence and Deny Iran All Paths to a Nuclear Weapon”

2018/05/30

By: Ashleigh Foor

(Source: The White House)

On May 8, 2018, President Trump addressed the United States in a Presidential Memorandum, “Ceasing U.S. Participation in the JCPOA and Taking Additional Action to Counter Iran’s Malign Influence and Deny Iran All Paths to a Nuclear Weapon”. He started by stating that the safety and security of the United States and the American people is his highest priority. He then stated that since the inception of the Islamic Republic of Iran in 1979, the revolutionary theocracy has declared its hostility toward the United States and remains the world’s leading state sponsor of terrorism, listing other offenses such as human rights abuses and proving assistance to Hezbollah, Hamas, the Taliban, al-Qa’ida, and other terrorist networks.

“There is no doubt that Iran previously attempted to bolster its revolutionary aims through the pursuit of nuclear weapons and that Iran’s uranium enrichment program continues to give it the capability to reconstitute its weapons-grade uranium program if it so chooses,” stated the President. Therefore, as President, he has approved an “integrated strategy for Iran that includes the strategic objective of denying Iran all paths to a nuclear weapon.”

Trump then goes on to explain the preceding administration’s participation in the Joint Comprehensive Plan of Action (JCPOA) as an attempt to meet the threat of Iran’s pursuit of nuclear capabilities. Although some believed the JCPOA would moderate Iran’s behavior, he said, Iran has only escalated its destabilizing activities. “Iran’s behavior threatens the national interest of the United States,” said the President. On January 12, 2018, Trump outlined two paths moving forward – that the JCPOA’s “disastrous flaws would be fixed by May 12, 2018, or, failing that, the United States would cease participation in the agreement.” He states that these issues were not fixed and that he is making good on his pledge to end the United States’ participation in the JCPOA. “Further, I have determined that it is in the national interest of the United States to re-impose sanctions lifted or waived in connection with the JCPOA as expeditiously as possible,” Trump stated.

The changes are outlined below:

Section 1.  Policy.  It is the policy of the United States that Iran be denied a nuclear weapon and intercontinental ballistic missiles; that Iran’s network and campaign of regional aggression be neutralized; to disrupt, degrade, or deny the Islamic Revolutionary Guards Corps and its surrogates access to the resources that sustain their destabilizing activities; and to counter Iran’s aggressive development of missiles and other asymmetric and conventional weapons capabilities.  The United States will continue to pursue these aims and the objectives contained in the Iran strategy that I announced on October 13, 2017, adjusting the ways and means to achieve them as required.

Sec. 2.  Ending United States Participation in the JCPOA.  The Secretary of State shall, in consultation with the Secretary of the Treasury and the Secretary of Energy, take all appropriate steps to cease the participation of the United States in the JCPOA.

Sec. 3.  Restoring United States Sanctions.  The Secretary of State and the Secretary of the Treasury shall immediately begin taking steps to re-impose all United States sanctions lifted or waived in connection with the JCPOA, including those under the National Defense Authorization Act for Fiscal Year 2012, the Iran Sanctions Act of 1996, the Iran Threat Reduction and Syria Human Rights Act of 2012, and the Iran Freedom and Counter-proliferation Act of 2012.  These steps shall be accomplished as expeditiously as possible, and in no case later than 180 days from the date of this memorandum.  The Secretary of State and the Secretary of the Treasury shall coordinate, as appropriate, on steps needed to achieve this aim.  They shall, for example, coordinate with respect to preparing any recommended executive actions, including appropriate documents to re-impose sanctions lifted by Executive Order 13716 of January 16, 2016; preparing to re-list persons removed, in connection with the JCPOA, from any relevant sanctions lists, as appropriate; revising relevant sanctions regulations; issuing limited waivers during the wind-down period, as appropriate; and preparing guidance necessary to educate United States and non-United States business communities on the scope of prohibited and sanctionable activity and the need to unwind any such dealings with Iranian persons.  Those steps should be accomplished in a manner that, to the extent reasonably practicable, shifts the financial burden of unwinding any transaction or course of dealing primarily onto Iran or the Iranian counterparty.

Sec. 4.  Preparing for Regional Contingencies.  The Secretary of Defense and heads of any other relevant agencies shall prepare to meet, swiftly and decisively, all possible modes of Iranian aggression against the United States, our allies, and our partners.  The Department of Defense shall ensure that the United States develops and retains the means to stop Iran from developing or acquiring a nuclear weapon and related delivery systems.

Sec. 5.  Monitoring Iran’s Nuclear Conduct and Consultation with Allies and Partners.  Agencies shall take appropriate steps to enable the United States to continue to monitor Iran’s nuclear conduct.  I am open to consultations with allies and partners on future international agreements to counter the full range of Iran’s threats, including the nuclear weapon and intercontinental ballistic missile threats, and the heads of agencies shall advise me, as appropriate, regarding opportunities for such consultations.

Sec. 6.  General Provisions.

(a)  Nothing in this memorandum shall be construed to impair or otherwise affect:

(i)   the authority granted by law to an executive department or agency, or the head thereof; or

(ii)  the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b)  This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c)  This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.