This originally appeared in Just Security.
Virgil Griffith, it’s safe to assume, did not have a happy Thanksgiving. On arriving at Los Angeles International Airport from abroad, he was arrested that day. An unsealed criminal complaint revealed that he was charged with violating sanctions against North Korea imposed under the International Emergency Economic Powers Act (IEEPA).
A criminal enforcement action for violating sanctions is rarely noteworthy; most cases involve defendants accused of trying to sell items surreptitiously to sanctioned countries. But the facts as alleged in this case set it apart, and raise the troubling possibility that the Department of Justice (DOJ) could be using IEEPA to encroach on Americans’ free speech rights under the First Amendment.
IEEPA and North Korea
IEEPA, enacted in 1977, provides broad powers that allow the president to place financial sanctions on individuals, businesses, governments, and other entities. In general, once entities are sanctioned, Americans and American businesses are prohibited from conducting any sort of financial transaction or trade with them. IEEPA is an emergency power that requires the president not only to declare a national emergency under the National Emergencies Act, but also, under the terms of IEEPA, to assert that the situation constitutes an “unusual and extraordinary threat . . . to the national security, foreign policy, or economy of the United States,” which threat “has its source in whole or substantial part outside the United States.”
In 2008, as sanctions against North Korea under a different statutory scheme (the Trading With the Enemy Act) were set to terminate, President George W. Bush invoked IEEPA in Executive Order 13466 to continue the sanctions. Since then, President Barack Obama and President Donald Trump have both issued additional executive orders modifying the sanctions against North Korea. Most relevant here is Obama’s 2016 Executive Order 13722, which expanded the sanctions to prohibit, among other things, “the exportation or reexportation … by a United States person, wherever located, of any goods, services, or technology to North Korea” (emphasis added). The Treasury Department’s Office of Foreign Assets Control (OFAC), which largely administers IEEPA, has issued regulations to implement these executive orders.
The Criminal Complaint
Virgil Griffith is a 36-year-old American who has a doctorate in computation and neural systems. He is a long-time blockchain enthusiast, and is affiliated with the company Ethereum, which is behind an eponymous cryptocurrency. According to the unsealed criminal complaint, Griffith traveled to North Korea via China in April to attend and present at a conference titled “Pyongyang Blockchain and Cryptocurrency Conference.” He chose to travel there even though his request for permission to do so from the State Department had been denied.
Griffith’s presentation was titled “Blockchain and Peace,” and according to the complaint, addressed “valuable information on blockchain and cryptocurrency technologies,” including, among other things, “how a blockchain technology, including a ‘smart contract,’ could be used to benefit” North Korea. However, the complaint also notes Griffith’s view, expressed in an interview with the FBI, that his presentation contained “basic concepts accessible on the internet.” Indeed, Griffith’s assessment seems to be buttressed by the complaint, which at one point gives an example of discussions that arose around Griffith’s presentation as concerning “technical issues such as ‘proof of work’ versus ‘proof of stake’.” A quick search of those terms on the internet reveals multiple pages and videos explaining those concepts, and so while they may or may not be technical, they are certainly not obscure. (The complaint also alleges that Griffith engaged in discussions “regarding using cryptocurrency technologies to evade sanctions and launder money,” without any further particulars.)
The complaint characterizes Griffith’s activities at the conference as providing “services” to North Korea within the meaning of the term in Executive Order 13722 and the OFAC regulations. The sole count against Griffith is conspiracy to violate IEEPA. Although the complaint alleges other facts that may form additional bases for arguing a conspiracy to violate sanctions (for instance, text communications concerning how to send cryptocurrency between North and South Korea), it is clear that at least some portion of the conspiracy claim is based on the claim that Griffith’s presentation and discussions at the conference were in themselves “services” that violate sanctions.
Plainly, the complaint uses the term “services” to describe Griffith’s activities because that is something prohibited under Executive Order 13722. But that is not the only word that could describe those activities, and that matters because if Griffith’s actions were characterized as a transfer of “information,” his conduct would likely be protected under IEEPA.
IEEPA and the First Amendment
IEEPA explicitly prohibits sanctioning the transfer of information. In a 1988 amendment to IEEPA prompted by the government’s confiscation of published materials arriving from sanctioned countries known as the Berman Amendment (named after its sponsor, Rep. Howard Berman (D-Calif.)), Congress specified that the president did not have the authority under that law to regulate the import or export of “informational materials.” OFAC interpreted the Berman Amendment narrowly in its regulations, however. The regulations defined “informational materials” as applying only to tangible items, and thus not applying to information conveyed in intangible ways such as by telephone. The regulations also limited the transfer of information to the purchasing of completed products (e.g., purchasing already-written books from a sanctioned country), and prohibited more iterative or collaborative processes such as editing an unfinished manuscript purchased from a sanctioned country before distribution.
When OFAC began interpreting the prohibition narrowly, and some (but not all) courts found the OFAC and DOJ interpretations reasonable, Congress went back in 1994 and amended IEEPA again with the Free Trade in Ideas Act (FTIA) to strengthen and update the language of the Berman Amendment and clarify that Congress intended the prohibition on regulating information transfers to be far-reaching. After the passage of the FTIA, this exception to IEEPA reads as it does today at 50 U.S.C. § 1702(b)(3):
“The authority granted to the President by this section does not include the authority to regulate or prohibit, directly or indirectly … the importation from any country, or the exportation to any country, whether commercial or otherwise, regardless of format or medium of transmission, of any information or informational materials, including but not limited to, publications, films, posters phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, art works, and news wire feeds.”
(It then clarifies that the exception does not apply to certain items listed in other statutory provisions.)
The congressional conference report on the FTIA, which states that its purpose is to “clarify [the Berman Amendment] by eliminating some of the unintended restrictive administrative interpretations of it,” speaks in broad terms regarding the interests it intends to protect. It first notes that the Berman Amendment “was explicitly intended, by including the words ‘directly or indirectly,’ to have a broad scope.” It then laments that “the Treasury Department has narrowly and restrictively interpreted the language in ways not originally intended,” before specifying: “The committee of conference intends these amendments to facilitate transactions and activities incident to the flow of information and informational materials without regard to the type of information, its format, or means of transmission…”
Congress also enacted a Sense of Congress that a president should not restrict travel for “informational, educational, religious, cultural, or humanitarian purposes or for public performances or exhibitions.” The conference report spoke expansively about what Congress intended the FTIA, in combination with the travel statement, to achieve, which was to:
“seek to protect the constitutional rights of Americans to educate themselves about the world by communicating with peoples of other countries in a variety of ways, such as by sharing information and ideas with persons around the world, traveling abroad, and engaging in educational, cultural and other exchanges with persons from around the world.”
As the Ninth Circuit described it in a 2003 decision, the Berman Amendment and FTIA were “designed to prevent the executive branch from restricting the international flow of materials protected by the First Amendment.”
Side-stepping the Law?
Presenting at a conference and engaging in discussions would seem to be clear instances of information transfer. Indeed, while the complaint does not characterize Griffith’s actions as providing information, the U.S. Attorney for the Southern District of New York justified the charges in a DOJ press release by stating: “Virgil Griffith provided highly technical information to North Korea, knowing this information could be used to help North Korea launder money and evade sanctions.”
The OFAC regulations exclude from the information exemption materials that are not fully complete when transferred (i.e., a completed book would be okay, film clips that need to be edited together would not). The DOJ could argue that this applies to Griffith’s interactions at the conference, perhaps on a theory that his participation in discussions, and particularly in answering questions, means the information he transferred was not a complete product on arrival. It is also possible that the DOJ will argue that the exemptions do not apply to at least some of the North Korean individuals with whom Griffith may be accused of having transacted. OFAC regulations exclude from the informational exemptions persons or entities that are also sanctioned pursuant to a different sanctioning statute (the UN Participation Act), presumably on the basis that that statute is not subject to the information exception. But to the extent that the DOJ’s arguments are based on OFAC regulations rather than IEEPA, there will be room for Griffith to argue that those interpretations are invalid. Thus far, his attorney has simply stated: “We dispute the untested allegations in the criminal complaint, and Virgil looks forward to his day in court, when the full story can come out.”
Whatever the DOJ’s ultimate arguments, its approach has raised serious questions about whether it is faithfully adhering to the Berman Amendment and the FTIA. This case appears to represent a serious threat to the broad exceptions for informational transfer and First Amendment activities that Congress intended.