Thursday, May 6, 2010
Appeals Court: Future Services Contract Violated Iran Embargo
By STEVEN M. ELLIS, Staff Writer
The Ninth U.S. Circuit Court of Appeals yesterday upheld a Southern California man’s conviction for violating the United States’ trade embargo against Iran.
A three-judge panel said evidence that Seyed Mahmood Mousavi entered into an agreement to provide future services to a Kuwaiti company seeking to do business in Iran was sufficient to show he violated the embargo.
A jury convicted Mousavi—who emigrated to the U.S. from Iran in the 1980s and became a citizen in 1999—of violating the International Economic Emergency Powers Act and the Iranian Transaction Regulations after authorities discovered evidence of concealed income on his 2002 tax returns.
The government said the income included more than $45,000 in payment for Mousavi’s services as a consultant on behalf of the Al Mal Kuwaiti Company, which sought to pursue investments in Iran and to develop an oil pipeline between the two countries.
The IEEPA allows the president to impose trade embargoes against foreign countries with which the United States has engaged in hostilities.
The Iranian Transaction Regulations, which imposed the embargo against Iran, resulted from executive orders issued in 1979 by then-President Carter in response to the seizure of the American embassy in Tehran. Some trade with Iran is still possible under the regulations, but requires a license from the Treasury Department’s Office of Foreign Assets Control.
At trial before U.S. District Judge Percy Anderson of the Central District of California, prosecutors introduced evidence of a contract in which Mousavi agreed to act as a consultant for Al Mal on its business ventures in Iran.
They pointed to Mousavi’s travel to Iran and Kuwait in 2002, and said he was aware of the embargo because he was a sophisticated businessman with high-level contacts in Iran who helped organize side trips there by Muslim pilgrims traveling to Mecca for the Hajj. Both the trips by Mousavi and those he helped arrange required obtaining Iranian visas through the Pakistani embassy and coordinating travel through third-party countries because the embargo and trade sanctions prohibited direct flights from the United States.
An OFAC official also testified that Mousavi never applied for or received a license to conduct business with Iran.
Insufficiency of Evidence
On appeal, Mousavi argued that the evidence was insufficient to allow any reasonable jury to convict him of violating the act because the government failed to prove any violation of the regulations. Contending that the government proved only the existence of the agreement, he said the regulations did not proscribe agreements for future services, and that the regulations were not clearly applicable to companies not located in Iran.
He further asserted that, even if he did violate the embargo, the government failed to show that it was willful.
The Ninth Circuit, however, rejected both arguments in an opinion by Judge Sandra S. Ikuta.
Writing that the relevant provision of the regulations “prohibits ‘any transaction or dealing in or related to’ providing ‘[g]oods, technology or services’ to Iran or its government, whether directly or indirectly,” the judge pointed out that they also indicated that “any transaction that ‘attempts to violate’ the prohibition against entering into the specified business transactions is prohibited.”
“Contrary to Mousavi’s argument, these provisions are not ambiguous; rather, they broadly prohibit any transaction that is related to providing goods or services to Iran, and any attempt to engage in such a transaction.”
Ikuta similarly rebuffed Mousavi’s willfulness argument, writing that the government must prove beyond a reasonable doubt that a defendant knew he or she was acting unlawfully, but is not required to also prove the defendant had a specific understanding of the regulations’ licensing requirements.
Applying that standard, she said a jury “could reasonably conclude that a sophisticated and politically connected businessman like Mousavi who lived and conducted business in Iran after 1979 was aware of the 1979 United States trade embargo.”
Judge Ronald M. Gould and U.S. District Judge Lloyd D. George of the District of Nevada joined Ikuta in her opinion.
The case is United States v. Mousavi, 08-50454.
Copyright 2010, Metropolitan News Company