GAO Reports on Problems with Iran Sanctions Licensing Data
The Government Accountability Office has issued a report entitled, "Iran Sanctions: Complete and Timely Licensing Data Needed to Strengthen Enforcement of Export Restrictions."
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
(The U.S. has banned the export of most U.S. goods to Iran without an export license from the Office of Foreign Assets Control. OFAC's general policy is to deny most license applications for Iran, with the exception of agricultural and medical goods specified in the Trade Sanctions Reform and Export Enhancement Act of 2000.
The U.S. also has generally prohibited U.S. firms from knowingly shipping goods to Iran through other nations without a Treasury license. This prohibition includes dual-use goods (civilian goods with potential military applications) that the Bureau of Industry and Security (BIS) has licensed for export to other countries.
The Census Bureau is responsible for maintaining records of its export licensing decisions, including data filed by exporters or their agents using the Automated Export System (AES).)
Census Had Missed AES Errors for Low-Value Iran Shipments
GAO reports that U.S. trade statistics for exports to Iran erroneously include goods that were not exported to Iran. For example, statistics indicate that from 2004-2008 U.S. exporters shipped 278 different types of goods to Iran. GAO found, however, that 97 of the types of goods, including military rifles, were not shipped to Iran but to a variety of other nations, including Ireland, Israel, and Iraq. The remaining 181 types of goods were primarily agricultural, medical, humanitarian, and informational items.
The misidentification of Iran as the recipient nation resulted from errors in export data filings that the Census Bureau did not detect or correct in AES because of their low dollar value.
Manual check implemented. Census officials stated, as a result of the GAO review, that they have initiated a manual check of all new export filings to Iran, required filers of export data to select recipient countries from a list (instead of allowing them to enter a two-letter international country code, which is prone to error ("IE" for Ireland, and "IR" for Iran, for example), and begun posting newly-discovered corrections to Iran export data on a Census Web page.
OFAC Paper-Based Data Systems for Licenses Cannot be Searched or Integrated
OFAC is issuing export licenses for Iran in accordance with export regulations, but it cannot routinely provide complete and timely information about those licenses because it uses two paper-based information systems to record data on all Iran-related licensing decisions and the systems are not integrated and cannot be searched to specifically identify licenses for the export of goods to Iran.
Tracking for legal exports planned. Treasury is planning to upgrade its system for tracking licenses for agricultural and medical exports to Iran, which are allowed under U.S. law. The upgrade would not include export licenses for other types of goods, such as equipment with potential military uses.
Illegal transshipment a problem. Iran is obtaining U.S. military and dual-use goods that are illegally transshipped through intermediaries in third-party nations, such as the United Arab Emirates, Malaysia, or Singapore.
GAO wants complete and timely info. To help ensure that U.S. agencies have timely access to reliable data concerning U.S. exports to Iran, GAO recommends that OFAC develop the capability to provide other agencies and Congress with complete and timely information concerning all licenses issued for the export of goods to Iran.
(See ITT's Online Archives or 03/09/10 news, 10030930, for BP summary of OFAC easing of Iranian export restrictions for internet services/software.
See ITT's Online Archives or 02/02/10 news, 10020215, for BP summary of Senate passage of bill imposing new restrictions on trade with Iran.
See ITT's Online Archives or 12/17/09 news, 009121725 for BP summary of House passage of bill to impose additional sanctions on Iran.
See ITT's Online Archives or 11/24/09 news, 09112420, for BP summary of OFAC clarification on one-year licenses for agricultural/medical exports to Iran.)
GAO report (GAO-10-375, dated March 2010) available at http://www.gao.gov/new.items/d10375.pdf.