[Ws2-jurisdiction] [Issue and Solution] ICANN and its obligation to apply for OFAC when necessary

Sun Aug 20 14:22:32 UTC 2017

ICANN RAA says it is under "no obligation" to seek an OFAC license (see
below)
With ICANN stating that it is under no obligation to apply for OFAC license
for applicants residing in sanctioned countries, ICANN provides a way for
jurisdiction to interfere with providing domain name services. Why, given
its commitment to global interoperability of the DNS, should it be
discretionary for ICANN to apply for an OFAC license?

*Solution: (as was suggested by Jeff, Mike,  IGP and others) *

Currently, the RAA states that:

*”** 4.  Application Process.*

*…..*

*Applicant acknowledges that ICANN must comply with all U.S. laws, rules,
and regulations. One such set of regulations is the economic and trade
sanctions program administered by the Office of Foreign Assets Control
("OFAC") of the U.S. Department of the Treasury. These sanctions have been
imposed on certain countries, as well as individuals and entities that
appear on OFAC's List of Specially Designated Nationals and Blocked Persons
(the "SDN List"). ICANN is prohibited from providing most goods or services
to residents of sanctioned countries or their governmental entities or to
SDNs without an applicable U.S. government authorization or
exemption. ICANN generally will not seek a license to provide goods or
services to an individual or entity on the SDN List. In the past, when
ICANN has been requested to provide services to individuals or entities
that are not SDNs, but are residents of sanctioned countries, ICANN has
sought and been granted licenses as required. **However, Applicant
acknowledges that ICANN is under no obligations to seek such licenses and,
in any given case, OFAC could decide not to issue a requested license**.”
[Emphasis Added]*

…………………

The red part should be changed to require ICANN  to applying for an OFAC
license. with the clarification that OFAC could decide not to issue a
requested license.

Farzaneh

*From:* ws2-jurisdiction-bounces at icann.org [mailto:ws2-jurisdiction-
bounces at icann.org] *On Behalf Of *farzaneh badii
*Sent:* Monday, August 7, 2017 4:08 PM
*To:* Mike Rodenbaugh <mike at rodenbaugh.com>
*Cc:* acct-staff at icann.org; Thomas Rickert <thomas at rickert.net>;
ws2-jurisdiction <ws2-jurisdiction at icann.org>
*Subject:* Re: [Ws2-jurisdiction] Some interesting points from the OFAC
Call [WAS RES: WRITTEN ANSWERS TO THE QUESTIONS RAISED DURING THE CALL]

I also agree with Jeff and Mike. IGP had proposed this change back in
January and we hope it happens.

One more issue that we discussed during the meeting was about the
uncertainty regarding the application of OFAC to non US-based registrars.
Some registrars not based in the US might want to avoid risk and not
provide services for sanctioned countries because of their contract with
ICANN. I think we should follow up on this issue and solve it by
just clarifying ( as Steve asked and Sam confirmed )  "that
contracted parties are not obligated to follow OFAC solely on the basis of
their having a contract with ICANN".

Farzaneh

On Mon, Aug 7, 2017 at 3:16 PM, Mike Rodenbaugh <mike at rodenbaugh.com> wrote:

I agree with Jeff's proposal that ICANN be required to make a good faith
application for OFAC license whenever it is necessary to fulfill the
purpose of registry and/or registrar agreements.  And I support his 2d
question, requesting details.

Note that OFAC doesn't just hamper registries and registrars located or
formed in sanctioned countries, but also registries and registrars with
officers, directors or significant shareholders from any of the sanctioned
countries (regardless where the business is located or formed).  Note
further that OFAC licenses are time-limited, requiring periodic
reapplication.  And ICANN legal has told me that they were not required to
seek an OFAC license for my client, even though that client had executed
registry agreements with ICANN.  I disputed that, and they got the license;
but there is no guarantee they will seek it again when it expires, even
though the registries are live.

I can't see any good reason why ICANN should not be required at least to
make a good faith effort to get a license.  It seems at least to be implied
in the registry agreement anyway, via the covenant of good faith and fair
dealing inherent in every contract (at least under California law).  If
ICANN refused to seek a license, it would frustrate the purpose of the
entire agreement.

Mike Rodenbaugh

RODENBAUGH LAW

tel/fax:  +1.415.738.8087 <(415)%20738-8087>

http://rodenbaugh.com

On Mon, Aug 7, 2017 at 11:10 AM, Jeff Neuman <jeff.neuman at comlaude.com>
wrote:

All,

Is someone able to document the questions that were not answered during the
teleconference?  I was on the teleconference, which was great, and I am not
sure what still needs to be answered.

Also, it seems like we have lost some sight of the main points raised
during the call.

   1. One of the main points I got on the call was that the language found
   on the Registrar Accreditation page of the ICANN site states:

*”** 4.  Application Process.*

*…..*

*Applicant acknowledges that ICANN must comply with all U.S. laws, rules,
and regulations. One such set of regulations is the economic and trade
sanctions program administered by the Office of Foreign Assets Control
("OFAC") of the U.S. Department of the Treasury. These sanctions have been
imposed on certain countries, as well as individuals and entities that
appear on OFAC's List of Specially Designated Nationals and Blocked Persons
(the "SDN List"). ICANN is prohibited from providing most goods or services
to residents of sanctioned countries or their governmental entities or to
SDNs without an applicable U.S. government authorization or
exemption. ICANN generally will not seek a license to provide goods or
services to an individual or entity on the SDN List. In the past, when
ICANN has been requested to provide services to individuals or entities
that are not SDNs, but are residents of sanctioned countries, ICANN has
sought and been granted licenses as required. **However, Applicant
acknowledges that ICANN is under no obligations to seek such licenses and,
in any given case, OFAC could decide not to issue a requested license**.”
[Emphasis Added]*

…………………

Although the language states that ICANN does not have to seek licenses for
residents of sanctioned countries, they generally do.  I would like to see
that last paragraph state in writing that they are required to seek a
license, but acknowledge that OFAC could decide not to issue a requested
license.  This would ensure that we could have registries and/or registrars
in these countries able to at least apply to become accredited.

   1. The second point that was interesting was that ICANN seeks licenses
   for all changes to the root zone if initiated by entities or residents in
   the OFAC sanctioned countries.    It would be helpful to know the terms
   (and limits) of those licenses (from an accountability standpoint).  Are
   there certain changes that cannot be made without additional licenses, etc.

Thanks again for the information on last weeks call and I look forward to
discussing the substance.

https://www.icann.org/resources/pages/application-2012-02-25-en

*Jeffrey J. Neuman*

*Senior Vice President *|*Valideus USA* | *Com Laude USA*

1751 Pinnacle Drive, Suite 600

Mclean, VA 22102, United States

E: jeff.neuman at valideus.com or jeff.neuman at comlaude.com

T: +1.703.635.7514 <(703)%20635-7514>

M: +1.202.549.5079 <(202)%20549-5079>

@Jintlaw
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