In The Courts

In United States v. Homa International Trading Corp., 2004 WL 2367821 (2d Cir. Oct. 22, 2004) (per curiam), the Second Circuit held that “services” prohibited by the trade embargo against Iran (the Embargo) included transferring a customer's money to Iran for a fee. A jury convicted Mazyar Gavidel and Homa International Trading Corp., a business owned and operated by Gavidel, for violating the Embargo by transferring $277,045 from the United States to Iran, in violation of 50 U.S.C. ” 1702, 1705(b); Executive Order 12959; and 31 C.F.R. ” 560.203, 560.204, and 560.406(b). The Embargo prohibits the “exportation … directly or indirectly from the United States … of any goods, technology, or services to Iran.” 31 C.F.R. 260.204 (emphasis added). At trial, the government established that Gavidel transferred funds on behalf of customers from the United States to bank accounts in Iran via Dubai, U.A.E. On appeal, Gavidel argued that 1) there was insufficient evidence to demonstrate that the money-transfer services were “services” prohibited by the Embargo; and 2) that the district court's jury instruction on the element of willfulness, as it related to Gavidel's breach of the Embargo, was erroneous.

The Second Circuit interpreted “services” to refer to the performance of something useful for a fee. The Second Circuit then noted that the Embargo prohibited exportation of services where the benefit of such services was received in Iran if the actual services were performed in the United States. Putting these two principles together, the Second Circuit held that Gavidel's activities of transferring a customer's money to Iran for a fee were violated the Embargo.