Dominica Diplomatic Passport Row highlights Distinction between ‘knowingly’ and ‘knowable’
The latest controversy over the issue of diplomatic passports by Eastern Caribbean governments to wealthy individuals with questionable backgrounds and motives has served to raise awareness of a little-discussed provision in US law as it relates to sanctions imposed on Iran.
The Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) of 2010 expanded the scope of potential criminal and civil liability under the law from possessing “actual knowledge” to include what “should have been known”.
In generally accepted US legal usage, when the word “knowingly” is used, it means that the defendant realised what he was doing and was aware of the nature of his conduct and did not act through ignorance, mistake, or accident. Knowledge may be proved by the defendant’s conduct and by all the facts and circumstances surrounding the case. [United States v. Kisting, 159 Fed. Appx. 725, 728 (7th Cir. Ill. 2005)]
However, in Section 101 of CISADA (“Definitions”), subsection (6) provides:
(6) KNOWINGLY -- The term ‘‘knowingly’’, with respect to conduct, a circumstance, or a result, means that a person has actual knowledge, or should have known, of the conduct, the circumstance, or the result.
Therefore, once significant and/or relevant information is freely available in the public domain, there is an expectation that such information is knowable.
Dan Peak, CEO of WorldCheck, noted, “This legislation has teeth and it will have a serious bite. The expanded scope of the new international legislation means that checking dusty, old sanction lists or doing Internet searches for anything mentioning Iran is not going to cut it.”
In fact, World-Check established a new Iran Economic Interest solution that enabled its clients to screen every relationship and transaction for individuals and entities with a “knowable economic relationship with Iran, therefore ensuring the client is adequately protected from risk.
While the current controversy relates to the alleged sale of a Dominica diplomatic passport to Iranian national, Alireza Monfared, who has since been arrested in the Dominican Republic and “extradited” to Iran to face charges there related to a multibillion dollar fraud connected to sanctions-evading oil sales, none of the Eastern Caribbean governments that run citizenship by investment programmes have been immune to allegations of impropriety regarding the issue of diplomatic passports, some also involving other Iranian nationals.
Although Dominica Prime Minister Roosevelt Skerrit has denied that he has ever sold or will ever sell diplomatic passports to anyone, his exposure to US criminal and/or civil proceedings for facilitating the freedom of travel of an individual involved in the evasion of Iran sanctions would not appear to turn on whether he received money but whether Monfared’s involvement was “knowable”.
Given that at least one compliance expert that worked for World-Check at the time has stated that he had been aware of Monfared’s activities as long ago as 2012, an assertion by Skerrit or on his behalf that what appears to be a largely superficial “due diligence” report obtained in 2014 from a firm that may not have the necessary resources or expertise to do so would not seem to amount to a persuasive defence in this respect.
Simply put, under US law, Monfared’s activities as an Iran sanctions evader were clearly “knowable” in 2014 if the right resources had been engaged.