[Ws2-jurisdiction] Response Requested: Proposed Changes to OFAC Recommendation

[Greg Shatan]

All,

Please take a few minutes to *read and respond* to this email, and the
*proposed
changes* discussed here, so that we can finalize the OFAC Recommendation
and send it to the Plenary.

There are three remaining proposed changes as far as I can tell. These
changes are below. *Please indicate whether you support adding any of
proposed changes 1, 2 and/or 3 to the OFAC Recommendation.  *

To make it easy, please respond along the lines of “I [support/do not
support] adding change 1” or “I would support change 1 with the following
revisions.”  If you think it would help others, please explain your
conclusion.

In addition to the changes, I have attached two documents:

·         A draft of the OFAC Recommendation that incorporates the proposed
changes suggested by Kavouss.  Where unclear, I placed a change where it
seemed most likely intended to be.

·         A document with virtually all of the emails devoted to these
proposed changes, arranged chronologically by topic.

*The proposed changes suggested by Kavouss are as follows:*

1.      The first proposed change appears intended to be added to the Issue
and Recommendation “Application of OFAC Limitations by Non-US Registrars.”
 The first part reads:

*There are several reports in the media that US-Based and Non-US registrars
have asked registrants to transfer out their domains immediately because
they might get affected by US sanctions.*

*Examples of that are related to Godaddy*[1]* and Online Nic,*[2]* which
made pressure against registrants having citizenship of Sanction countries.*

Kavouss asked that the second part be inserted into the corresponding
Recommendation:

Registrars should be reminded that they should not normally examine zero
risk policy in regard of penalties imposed by OFAC.

2.         The second proposed change relates to an action taken by
Resello, a Dutch registrar.  It’s also unclear where this would go (it does
not seem to fit in the section “Application of OFAC Limitations by Non-US
Registrars.”)  Perhaps it would go into a new section, possibly
entitled “Policy
of not Doing Business with Iranian Customers/Resellers (Unconnected to
OFAC/Sanctions) by a Non-US Registrar”:

*An individual domain Name Iranian National reseller residing outside Iran
sent a request  to <sales at resello.com <sales at resello.com>> in an online
form, asking to become reseller of Domain Name in Iran (to sell domains to
Iranian people).*

*He received the following reply:*

*Quote*

*“On Tue, Sep 19, 2017 at 9:48 PM, Resello Sales <sales at resello.com
<sales at resello.com>> wrote:*

*Dear reseller (XXX)*

*Unfortunately our policy restricts doing business with Iranian
customers/resellers, even if they aren't living in Iran, but have an
Iranian passport.*

*Kind regards,*

*Mark Assenberg”*

*It is worth mentioning that Resello is a subsidiary company for following
holding:*

*Yourholding*

*Ceintuurbaan 28*

*8024 AA Zwolle*

*+31 38 453 0752*

*The name is Yourholding and they are based in Netherlands. So they are not
US-Based company.*

*They do not want to explain why they don't want to provide service to
Iranian. They say, they is our internal policy decision.*

*It is important to make it clear that none of Registrars and service
providers which are not US Nationals or not based in USA cannot make
internal policies to avoid giving services  to a given citizens. This is a
global business not a personal decision of a company or its managers. They
must fully observe the expected behaviour and responses.*

*It is important to emphasize that non-US based companies should not to
replicate the rules inside USA.*

*[Recommendation]*

*The group in attempting to address the case mentioned above thought that
the above situation might have been arised as result of misinterpretation
of applicability of OFAC Regulation to the case.*

*The Group concluded that there was no relation between the case and OFAC
Regulation and its applicability.*

*The Group also did not find any provision in RAA to obligate the Resello
to get into a business with the domain name reseller to provide the
requested domain name did not find also any provision in the RAA to allow
the registrar to reject / deny the request.[3] The group therefore
considered / recommends that there is a need that ICANN further examine the
matter with a view to address the silent point in the RAA.*

3.      The third suggested change is intended to change the Recommendation
relating to General Licenses.  After Kavouss suggested several changes
(including the language in blue), I added the red language to reflect
Kavouss’s changes in a way that seemed to read better in the text.  After
the red language was added, Kavouss continued to request that the language
in blue be added as well.

ICANN should then pursue one or more OFAC general licenses at the earliest
possible time, unless significant obstacles were discovered in the “study”
process. If there are significant obstacles, ICANN should report them to
the [empowered] community and seek its advice on how to proceed.  If
unsuccessful, ICANN would need to find other ways to accomplish the
ultimate goal -- enabling transactions between ICANN and residents of
sanctioned countries to be consummated with a minimum of “friction.”  It is
critical that ICANN communicate regularly about progress toward securing
general licenses, in order to raise awareness in the ICANN community and
with affected parties. * The role of ICANN, to make awareness about such
situation is critical and should not be undermined.*



Finally, there have been a number of questions asked about each of these
suggested changes, which have largely gone unanswered.  I’ve rephrased and
listed them here, since it could be helpful for the Subgroup to consider
them (or see if any members might answer them).  (I am not suggesting these
questions need to be answered to evaluate the proposed changes.)



*On suggested change 1*:



1.   Do you have the “reports in the media” referred to in the proposed
change?

a.    If the Subgroup has not seen the reports in the media, can the
Subgroup Report refer to them, or the activities reported in them?

b.    For US registrars, considering that they have to comply with OFAC, is
this an issue for this Subgroup?

c.    For non-US registrars, why isn’t the current text of this section of
the OFAC Recommendation sufficient? (It discusses possible mistaken
application of OFAC sanctions by non-US registrars because they think
contracting with ICANN imposes OFAC compliance obligations on them)*.*

2.   Since GoDaddy and OnlineNIC are both US-based registrars, does it make
sense to refer to them?who are required to comply with OFAC sanctions.

a.    Do you know what “made pressure against” refers to?

b.    Are there any example of this “pressure”? With non-US registrars?

3.   What does it mean to say “Registrars should be reminded that they
should not normally examine zero risk policy in regard of penalties imposed
by OFAC”?

a.    If this refers to the exercise of business or legal judgment of
registrars, do you believe it is appropriate for the Subgroup Report to
comment on this?

b.    What proposed issue does this Recommendation resolve/remediate?



*On suggested change 2*:

1.                      Is this an example of a non-US Registrar complying
with OFAC sanctions?  Where is the connection to OFAC?

2.                      What section of the RAA is being violated by
this business
decision (i.e., a registrar deciding not to do business with citizens of a
given country (whether it is Canada, Haiti, Iran or otherwise))?

3.                      If Resello's business decision does not seem to be
related to OFAC, US jurisdiction or to any ICANN-related jurisdiction, does
the Subgroup approve this as an “Issue” or our group to make a
Recommendation on?  If so, what recommendation?

4.                      Is this possibly an EU sanctions issue (the
registrar is Dutch)

5.                      If this is possibly an EU sanctions issue, should we
get into interpreting EU sanctions?

6.                      Why is the current language of the Recommendation
insufficient? It reads:

a.          "ICANN needs to bring awareness of these issues to registrars.
ICANN should clarify to registrars that the mere existence of their RAA
with ICANN does not cause them to be required to comply with OFAC
sanctions. ICANN should also explore various tools to remind registrars to
understand the applicable laws under which they operate and to accurately
reflect those laws in their customer relationships."

7.                      What connection does this have to OFAC sanctions or
to ICANN's "jurisdiction" -- in the US or elsewhere?



*On suggested change3:*

1.                        Why is the language already added to the text (in
red) insufficient?

2.                        What situation does “make awareness about such
situation” refer to?

3.                        Is there a concern that something will be
“undermined”?  What does this refer to?

------------------------------

[1] NOTE TO SUBGROUP: GoDaddy is a U.S.-based registrar incorporated in
Delaware as GoDaddy, LLC and headquartered in Scottsdale, Arizona.

[2] NOTE TO SUBGROUP: OnlineNIC is a U.S.-based registrar incorporated in
California as OnlineNIC, Inc. and headquartered in San Leandro, California.

[3]  Resello’s “General Terms and Conditions,” for resellers state in
Article 1.1 that “acceptance by Resello … may be refused without reason.”
https://www.resello.com/agreement
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