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Lurie's column appears in the Jewish Journal of South Florida

United States of America

Federal Reserve Board drops interest rate 1/2 percent

WASHINGTON, D.C. (Press Release)—The Federal Open Market Committee decided today to lower its target for the federal funds rate 50 basis points to 4-3/4 percent.

Economic growth was moderate during the first half of the year, but the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally. Today’s action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time.

Readings on core inflation have improved modestly this year. However, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully.

Developments in financial markets since the Committee’s last regular meeting have increased the uncertainty surrounding the economic outlook. The Committee will continue to assess the effects of these and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Charles L. Evans; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; William Poole; Eric Rosengren; and Kevin M. Warsh.

In a related action, the Board of Governors unanimously approved a 50-basis-point decrease in the discount rate to 5-1/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Cleveland, St. Louis, Minneapolis, Kansas City, and San Francisco.

The preceding was provided by the Federal Reserve Board

Justice Department announces prosecution of Dutch company accused of smuggling to Iran

WASHINGTON, DC (Press Release)— A Dutch aviation services company, its owner, and two other firms have been charged in a criminal complaint in the District of Columbia with illegally exporting aerospace grade aluminum, aircraft components, and other equipment from the U.S. to Iran and the government of Iran in violation of U.S. embargoes. The defendants also have been charged with making false statements on export control documents.

The announcement was made today by Kenneth L. Wainstein, Assistant Attorney General for National Security; Jeffrey A. Taylor, U.S. Attorney for the District of Columbia, and Mario Mancuso, Under Secretary of Commerce for Industry and Security. The investigation was conducted by agents from the Department of Commerce’s Office of Export Enforcement and the Department of Homeland Security’s U.S. Immigration and Customs Enforcement (ICE), with assistance from the Defense Criminal Investigative Service (DCIS) and the FBI.

The defendants named in the complaint, which was recently unsealed, are Aviation Services International, B.V., an aircraft parts supply company located in the Netherlands, and the company’s owner Robert Kraaipoel. Two additional Dutch companies, Delta Logistics L.V., and TPC, B.V., which are owned by Kraaipoel’s son, are also listed as defendants. An arrest warrant has been issued for Kraaipoel, who is a citizen of the Netherlands and believed to be residing there. Dutch Customs officials are also conducting an inquiry into Kraaipoel’s business practices.

According to the criminal complaint, Dutch Customs officials have informed U.S. officials in the Netherlands that, in 2006 alone, Aviation Services obtained more than 290 items, including parachutes, aircraft parts, aircraft paints, and industrial chemicals, from the United States and caused them to be shipped or transported to Iran.

Dutch Customs officials have further reported that many of these U.S.-origin goods were sent to Iranian government agencies, Iranian procurement agencies or companies doing business in Iran, including Heavy Metals Industries in Tehran, Iran Aircraft Industries in Tehran, and Iran Helicopter Support and Renewal Co. in Tehran.

In carrying out this scheme, Aviation Services International and Kraaipoel attempted to use and did use entities in the Netherlands, Cyprus, and Dubai, that were owned or controlled by Kraaipoel, to pose as end users for U.S.-origin goods, when, in fact, the goods were being re-exported to Iran, according to the criminal complaint. Purchases were made from U.S. companies in several states, including Arizona, Connecticut, Florida, Kansas, and New Hampshire.

The criminal complaint alleges that Aviation Services and Kraaipoel made false statements in November 2005 and January 2006 when they certified that U.S.-origin aviation communications equipment with potential applications in Unmanned Aerial Vehicles was being sent to the Poland Border Control Agency, when, in reality, the equipment was being sent to Iran.

The complaint also details a January 2007 attempted shipment to Iran of U.S. aircraft parts, including airspeed indicators and navigation equipment; as well as a March 2007 attempted export of U.S.-origin polymide film to Iran; and an April 2007 shipment of U.S.-origin aerospace grade aluminum bound for Iran and detained in the Netherlands.

Under the International Emergency Economic Powers Act and the Iranian Transaction Regulations, all exports to Iran of U.S.-origin commodities are prohibited absent authorization in the form of an export license from the Office of Foreign Assets Control (OFAC) of the Department of the Treasury. It is also unlawful to ship U.S. origin products to a third country and then re-export them to Iran without the necessary authorization from OFAC. These prohibitions have been in place since 1995.

“This investigation demonstrates in very clear terms the threat we face from the illegal foreign acquisition of U.S. technology. Keeping America’s critical technology from falling into the hands of state sponsors of terror has never been more important,” said Assistant Attorney General Wainstein

“These charges demonstrate that our office will vigorously enforce the trade embargo regulations that protect our national security, diplomatic and economic interests. Let this be a warning to those who would seek to profit from trade with embargoed countries,” said United States Attorney Taylor.

“This case illustrates that U.S. Government Iran sanctions program encompasses many agencies working together to ensure that the sanctions are being implemented and enforced to the fullest extent possible under existing laws and regulations. The case also is an excellent example of how we work with our partners overseas to identify foreign entities that seek to evade U.S. export control laws to divert U.S.-origin goods to Iran,” said Under Secretary of Commerce for Industry and Security Mario Mancuso.

The maximum penalty for violating the trade embargo on Iran is twenty years imprisonment, a fine of $250,000, or both, and three years supervised release for natural persons and, for corporations, a $500,000 fine. The maximum penalty for filing false documents is five years imprisonment, a fine of $250,000, or both, and a term of three years supervised release.

Assistant Attorney General Wainstein, U.S. Attorney Taylor, and Under Secretary Mancuso praised Senior Special Agent David Poole from the Department of Commerce Office of Export Enforcement, the ICE Special Agents who participated, as well as Special Agent Michael Campion from DCIS, and Special Agent B. Reed Wilson from the FBI, for their thorough investigation.

The prosecution is being handled by Assistant U.S. Attorney Steven Pelak, as well as Trial Attorney Ryan Fayhee from the Counterespionage Section of the Justice Department’s National Security Division.

The preceding was provided by the U.S. Justice Department

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