June 21st, 2012

Apple taking heat for obeying Embargo law

CAIR and others are criticizing Apple this week because an Apple Store in Georgia refused to sell a Farsi-speaking woman an iPad.

It turns out that despite the claims of unfair prejudice, the choice saved the law from being broken by Apple and the woman.

The key here is that there was a red flag identified by the Apple employee. The U.S. has embargos on Iran, Cuba, Sudan, North Korea and Syria, so when the employee heard the customer speaking in Farsi, this gave Apple a legitimate reason to have concern. And the concern was valid: based on public reports we know Sahar Sebet, the potential customer, intended to export the iPad to Iran. The decision not sell the item to her for export to Iran was correct.

In United States Export Controls by John R. Liebman, Roszel C. Thomsen II, James E. Bartlett III, they write “The legalistic and mechanical distinction between and export sale and a domestic sale is inadequate. Strictly speaking, a domestic sale is one where title to the commodities and risk of loss pass in the United States. However, such a sale is nevertheless considered an export sale is if the seller knows or has reason to know that it is merely the first step in a series of transactions that will see the item spirited out of the United States.”

The Apple employee considered the language being used as sufficiently suspicious and followed policy. The risk to U.S. companies in participating in an illegal transaction can be high, so companies have to implement effective procedures in order to mitigate that risk. Apple’s policy is essential in that light. And again: Sabet intended to export the item to Iran, so by paying attention to red flags, Apple actually fulfilled its obligations under the law.

If CAIR and other groups wish to allow free exports of iPads and other items to Islamic Republic of Iran, they should as the US Congress for change, rather than attempt attacks and pressure to coerce private business to ignore the law.