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Exports to Iran Could Yield Millions in Fines, Substantial Prison Time

Tuesday, November 01, 2016
Sandler, Travis & Rosenberg Trade Report

Two California men have been arrested on federal charges for their alleged role in a scheme to smuggle millions of dollars’ worth of military aircraft parts and other potential defense items to Iran, the Department of Justice reports. A company owned by one of the men has also been charged. The U.S. embargo on Iran, which is enforced through the International Emergency Economic Powers Act and the International Traffic in Arms Regulations, prohibits the export of goods, technology, and services to Iran with very limited exceptions.

Among other things, the indictment alleges that items were purchased from a U.S. vendor, exported to addresses in the United Arab Emirates and Kuwait, and transshipped to Iran. To reduce the likelihood of detection, the defendants falsely claimed on shipping documents that the items were destined for countries other than Iran and substantially undervalued them to avoid having to file export forms that might prompt further inspection by U.S. Customs and Border Protection.

According to DOJ, one of the men faces up to 115 years in federal prison and a $4.77 million fine while the other faces up to 95 years in prison and a $3.77 million fine. The actual sentences will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

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