Ancient artifact from Iran seized by US Customs.

Seized Iranian vase, source:

U.S. Customs and Border Protection (CBP) Officers in Kentucky seized a shipment containing an antique amber glass bottle believed to be an antique from the 9th to 10th century. CBP officers forwarded the antique to a subject matter export who examined the bottle and determined the bottle was from Iran between the 11th and early 13th centuries.

The shipment from the UK bound for an address in Colorado was unfortunately seized for Office of Foreign Asset Control (OFAC) violations. As you are aware, current OFAC rules prohibit the importation of goods or services from Iran. OFAC is a department under the U.S. Treasury and enforces economic and trade sanctions against certain countries and individuals who are believed to be involved with terrorism, narcotics, human trafficking or other illegal and disreputable activities.

Besides OFAC issues, CBP also helps protect cultural property and keeps antiques with their rightful owners. The seized Iranian vase will be returned to Iran.

In addition to merchandise from Iran, OFAC regulations prohibit importation of goods and services from Cuba, Burma (Myanmar), and most of Sudan. Certain exceptions can be made but do require an OFAC license for those importations.

If you have any questions about OFAC enforcement or compliance, contact David Hsu by phone/text anytime at 832-896-6288 or by email at:

OFAC reaches settlement with Kollmorgen over Iran sanctions violations.

taj mahal

Photo by Burkay Canatar on

According to a press release from the U.S. Department of the Treasury:

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced a $13,381 settlement with Kollmorgen Corporation (“Kollmorgen”) of Radford, Virginia. Kollmorgen has agreed to settle potential civil liability on behalf of its Turkish affiliate Elsim Elektroteknik Sistemler Sanayi ve Ticaret Anonim Sirketi (“Elsim”) for six apparent violations of Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR). The apparent violations involved Elsim dispatching employees to Iran to service machines and providing other services to Iran in violation of ITSR § 560.215. OFAC determined that Kollmorgen voluntarily self-disclosed the apparent violations on behalf of Elsim and that the apparent violations constitute a non-egregious case.

If you have any questions about the Iran sanctions, want to update your OFAC compliance program or have concerns that your company or any affiliate is violating OFAC sanctions on Iran, call David Hsu at 832-896-6288 or by email at

In-depth details of the ZTE deal.


By ZTE Corporation (Own work (vectorized)) [Public domain or Public domain], via Wikimedia Commons

Most media reports of the ZTE deal stop only mention the $1 billion dollar fine and $400,000 to be placed in escrow.

I thought this reporting was a little lacking in details, so I went ahead and read the details of the ZTE deal and summarized them below:

1. Pay $1,000,000,000.00 within 60 days of June 8, 2018.

2. Pay $400,000,000 to escrow within 90 days of June 8, 2018 to a US headquartered bank selected by ZTE and approved by BIS.
-10-years probationary period.
-$400,000,000 will be returned to ZTE after 10 years.
-Records maintained and retained in the US or fully accessible from the US.
-Comply with all other terms and committed no other violation.
-Comply with OFAC settlement agreement.
-If ZTE is found to be non-compliant, then the $400,000 goes to BIS.
3. ZTE has 30 days to retain and their expense an “special compliance coordinator” (SCC)
-The SCC will be in place for 10 years
-If there is a change to any SCC, the replacement must be made within 30 days
-ZTE can’t hire an SCC to join ZTE until 5 years after the agreement ends.
4. ZTE must complete 9 audit reports to show compliance with US export control.
-Independent compliance monitor performs the first 4 audits.
-SCC completes remaining 6 audits
5. All records must be stored-in or fully accessible from the US.
6. ZTE must allow the US Gov’t to verify adherence to their export control compliance program.
-ZTE needs to provide export compliance training to leadership, mgmt, employees.
-ZTE needs to provide BIS copies of training materials until January 1, 2021.
-Implement export compliance program within 6 months.
-Replace entire Board of Directors
-Terminate all current senior leadership of ZTE and ZTE Kangxun.
-30 days after replaceing BOD, ZTE needs to create audit/compliance committee.
-Within 90 days of order, ZTE needs to detail all Chinese government ownership and control of ZTE, including stock ownership.
-Within 180 days, ZTE needs to publish online the classification under the regulations, publish in English and Chinese.
-Within 4 years, ZTE needs to hold 2 public symposia in China regarding export control compliance.

7. Full and timely payment of civil penalties.

8. For 10 years, ZTE cannot participate in any transaction involving any item exported or to be exported from the US that is subject to the Regulations.

9. ZTE cannot export or re-export to or on behalf of a denied person.

10. Any one related to a denied person also subject to the order.

11. 10 year denial period suspended as long as ZTE pays the penalties. If ZTE violates terms, then a 10-year denial period from the date it is determined that ZTE has failed to comply.

12. ZTE cannot make a statement directly or indirectly denying allegations in the: proposed charging letter, the March 17th settlement agreement, the June 2018 agreement or the superseding order.
-ZTE needs to consult with BIS regarding any press releases

13. ZTE should fully cooperate with BIS, DOJ, OFAC regarding production of documents and witnesses.
-ZTE must be truthful in disclosures to BIS.
-ZTE must make available for interview deposition or testimony of employees current and former as needed.
-ZTE to notify BIS of any violations during the 10-year probationary period.
14. The ZTE order is to be made public.

PLEASE NOTE: The Senate added an amendment in the National Defense Authorization Act for Fiscal Year 2019 that would reverse the ZTE deal if passed. The amendment passed the Senate on Friday the 15th and is now in the House.

My thoughts: I don’t believe the Senators supporting the amendment to the NDAA have read the entire settlement with ZTE. My guess is the Senators only read the “$1 billion” dollar fine.

The US/ZTE deal is good for several reasons:
1. This deal keeps ZTE in business.
2. If ZTE is in business, US companies that supply to ZTE will benefit (Qualcomm, Google, etc).
3. This agreement is the FIRST (and likely the LAST time that the US Government will have any oversight of a Chinese company. I don’t think the Senators understand how unusual this is. Oversight by the US government of a large Chinese company will never happen again.
4. This deal allows the US to ensure no export controlled technology is sent by ZTE to a denied country for the next 10 years.


Sudan joins the UN’s Convention on the Recognition and Enforcement of Foreign Arbitral Awards.


Credit: Wikipedia 

In October 2017, the US revoked certain sanctions against Sudan and the Sudanese government. These sanctions include those put in place by then-President Clinton (Executive Order 13067) and then-President Bush (Eexecutive Order 13412). However, OFAC sanctions related to the conflict in Darfur: EO 13400, EO 13067.

Following the removal of sanctions, the Sudanese government has made efforts to increase foreign investment – with the Sudanese state minister touring Germany, Bahrain and other countries in December 2017.

In a move to further increase foreign investment to Sudan, on Tuesday, April 3rd, Sudan joined the network of countries that agree to enforce and recognize other nation’s arbitral awards. By joining this network, the Sudanese government hopes to increase confidence of foreign investors – especially in Sudan’s oil and gas sector.

Nations that sign the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awardshe Signatories to the New York Convention agree to recognize arbitration agreements and enforce awards issued in other countries party to the rules. This agreement is viewed as the basis for international arbitration and allows a way for companies to settle commercial disputes.

The removal of 20 years of trade and financial sanctions will allow U.S. citizens and companies to now do business in Sudan, including deals with their government. However, U.S. citizens and companies are still probibited from conducting business with parties on the OFAC list.

If you or your company is planning to invest in Sudan, contact our offices, we can verify compliance with the most recent OFAC list and assist your company in taking all efforts to maintain export compliance – David Hsu, 832-896-6288 or by email at