run is not a required element the four million penalty is still on constitutional if there is no evidence of any harm caused by epsilons conduct and finally a fact did not get adequate notice of its factual and legal record i thought your argument in part was that the agency took the position that as it was interpreted in the statute in its own regulation that it had to show the goods went to iran time and this could well it could if the law supports that it should not where it fails to give adequate warning of massive liability and which is the situation n what is opec supposed to do when they go to the web site and see the distribution to iran and their photos of your goods it what are they supposed to do i have a couple comments to that ok and the first one is that when you look at the timeline here of the photos that they looked at the photos that they used to rely on  evidence of actual exports that tone occur until two thousand and eight to two thousand and twelve then later they tell the pictures of all sorts website of a suppose that shared website and two thousand and thirteen which is after the fact of all of th contends that they were not aware that that was all they do business and many different countries and they weren't maintaining their website they are a small family owned company and they have multiple different lines of products distributing multiple multiple different places around the circumstantial evidence that you knew or had your client knew or had reason to know i would say the products we're going to are and i would say that in that situation that would probably constitute reason to know but that's all we have here us  items from a trade show mind you these items could have gotten there from anybody anybody could've walked into the rio to a retail store in dubai or anywhere because upsilon ships and multiple different countries and regions and taken those into iran these are not there are lots of pictures of arguably that goods were going to that retail store in dubai well i want to focus on the thirty four as i understand the max argument as to it's evidence it's that your client had that two thousand and eight shipment and then after that there were these wire transfers that led the agency to do some i didn't catch this to the two thousand and thirteen point you're talking about the agency took the position that that website showed that astra was dealing only with companies in iran so whatever went to it therefore it was reasonable to assume your client knew or should have known that the goods were going to go into iran all of two thousand and twelve amounts for international saving it doesn't have its website up yet it's developing a website and asking if it can post a link to its website the only thing on the in itself doesn't more than four billion dollars fine and evidence that every single one of the thirty nine shipments actually ended up in iran now even reason to know if they had reason to know that the morning your honour's made peace the part of the us yelling from the department of justice i'm here today on behalf of the office of foreign assets control if i may begin by addressing some of the circumstantial evidence that was in the record and response specifically the question reminding me now of the line of cases that say our deference is not necessarily appropriate if a little agency right and i take that point and i'd like to explain why our deference is not necessary in this case opposing country undertaking with knowledge or reason to know that such goods technology or services are intended specifically for supply transshipment or we exportation directly or indirectly to iran or the government of iran yes sees that and so the sly your honor we do not believe that the standard requires a showing of exportation to run or a finding a way to go no i'm not concerned about first of all what  is not on the part of the penalty determination was based on the theory that epsilon shipment to us from added three point four million dollars to the iranian economy that was an express rationale for the penalty wish that there wasn't such a finding in effect by saying well predominantly use that adverb that the goods went to iran i thought well that doesn't even cover all thirty four know if i may we defended the agency's understanding that actual exportation is not required by the regulation we do believe that the agency further at a page thirty one of our brief and page eleven or for brief we express the say that the agency also did find the thing that we don't think is necessary but that is and out of the fire but we're focusing on the point we don't see that finding and and i think that tends to show language is a finding will if i read from the agency councils are sorry and foresman officers evaluation i think what you might have one about to read juxtaposes direct evidence with circumstantial evidence and says there is no direct evidence nah the reason i was hedging your honor without giving you a direct answer is because your question assumes certain facts which are critical for example the percentage if we have if you want to assume the example here on highway a better question  means shipment from the united states it does not necessarily mean receipt in the foreign country as a matter of of just general commerce law an import is a receipt in a country and export is the act of shipment from this country so once the ship leaves the dock for iran and on your hypothetical sinks in the middle of the ocean the export has been complete even completed even if the import hasn't been completed so in other words the regulation was but it's also a point that absalom didn't make and so i would suggest that that actually has been a way for purposes of this litigation a very interesting point the need is not really and in fact you know what the problem you rich so we have focuses on the enforcement memos to the director of fact and looks at the language and the juxtaposition of the absence of direct evidence but the existence of indirect evidence and then looks at the penalty notice which uses the identical language describing the circumstantial evidence and if i may i think it's quite critical i hoped to start this colloquy by reciting the evidence that was before back and i really think it's important i do to and i'd just like to hear your take on it thank you your honor so the following i think you can be distilled to five points the following five facts were in the record as found by ofac first absalom doing business as power acoustic previously shipped goods directly to subsequently after that subpoena epsilon then made the five subsequent strip minutes to ostrow which were the basis for the greeter snus not terminate that let me ask you though but at that point there is evidence in the record that this retail store had been opened in dubai and that these goods were going there to remain at this retail store in d so why isn't that consistent with a non violation of over five chose not to credit bad evidence in the record for a number of reasons first it found that the pictures of the shop considered this evidence and chose not to credit it not only because of as i said there wasn't specific evidence that it was a commercial shop but also because opec found suspicious the timing but that this was after over a question about it but the question i had in my mind necessarily follow the twenty twelve letter and it seems that the agency took the position no matter what happens after twenty eleven if you ship to d background i know but my point is once guilty always guilty of the argument with respect your honor if you look at the valuations i really don't believe that was it i think the agency evaluated the evidence considered  and concluded that the slender evidence that epsilon had identified in the e mails especially when coupled with know that it was i don't look at it from this point of view why on earth would they do this and risk all shipments to asura i think and if asura was now coca cola i think at that point given the history here given that the butt of the answer is yes isn't it that they had a course of conduct before twenty twelve and it really didn't matter what they did afterward no no your honor they could have put into place compliance procedures to verify and given the long history right and one of the things  own website from two thousand and six contain pictures which were identical from the os from website and so we know at least as two thousand and six the same websites that started the same pictures and  all that was required and that and i hasten to add of course this is a question in the first instance for the agency to decide you know it then but i just want to understand what the it because when i'm knows i wrote down everything i thought was absolutely relied on in part because at that point from about point on epsilon was on notice that its business dealings with ours for him were highly problematic it should at the very least undertake a compliance process to ensure that none of its products knowing that ofac has substantial concern that its products are being sent on to iran to undertake a compliance program a number of e mails from an oscar representative saying oh no we've opened up a new store and overacts terminations was not sufficient justice on a no to raise a red flag as amicus argues that there used to be this inventory exception i notifies that you didn't see any factor if i may just address the inventory exception on undervalue conception of the world if a u s person shoots it's good to a third country and the merchandise becomes part of the general inventory and then the person would be blameless that's not the test ofac uses the test ofac uses is whether the individual u s person knew or should have known that both personally so these are very fact specific  are intended for and so and so if there is a compliance program for example that demonstrates beyond speculation that the goods in fact didn't go to iran but the goods went to or some other place then there would be no liability it's all a question of the facts in the particular case here the facts as opec found them were that they were that astra did its dealings only in iran at the time of the events in question here that and you know that based on it's two thousand twenty thirteen based on the twenty thirteen web site and again the web site the content of the website which o the content of the website said we've been doing business in iran years and so again these were all determinations that ofac made and its judgment as the fact finder in this case and it was only the combination of all of the circumstantial evidence that led to the conclusion there was never and that is why you have language might tend to show because it was a circumstantial determination not a determination based on direct if there well even if they didn't show that all thirty four oh no no i'm sorry your honor no predominantly goes to the question about whether or not a person should have known and one of the factors that the agency considers is whether the person in the third country predominately or exclusively trades with iran so that would just be a factor for consideration and absolutely my pathetic alarm coca cola and i'm shipping throughout the middle east  once i know i get this cautionary letter then i have all kinds of things that you've undertaken to compliance process to make sure that your product actually doesn't go to iran that the third  person and third person excuse me in the third country has set up procedures to make sure that when coke is received from the united states it doesn't get mixed into any deliveries going to iran and so we're imposing these  and at the initial two thousand and eleven subpoena actually the initial two thousand and eight cautionary letter made abundantly clear that there is severe danger in dealing with any company that does business with iran we recognize that fact made the determination that three point four million dollars were added to the iranian economy and that was a harm to us sanctions interests again this goes to whether the helen argument that this will bankrupt the company just for my curiosity if that's true are there quote arrangements that can re well i don't know depends on the nature of the law and saying is these case summaries point out that in other situations there were major adoptions that were allowed and even in this case the client was eligible for first defend your honor and all i wish there was further education within the agency there and now all of this litigation as your honor knows there's always a trade off when there's a settlement and every single case but one the blue robin case that epsilon cites one sentiment exception and the statute should be interpreted and we made arguments below concerning the different elements here and specifically why are that's kind altie was a disproportionate to even see action and why this case  go back to this point in your reply brief you do make the argument that the agency's new interpretation imposes massive liability without fair warning that's not the point  government is imposing a penalty and the causes i could come was the fair warning notice argument that you made which is different but it's in the ballpark c's post hoc rationalization concerning this stuff it's just that it's a brand new interpretation the response you heard earlier was that it doesn't need our deference that you specifically knew or should have known that those goods were going to iran whether they get to iran or not well when you look at all the imports my actions that i mentioned before there is not one in force an action and posing liability under t investigation of the thirty nine shipments so it was not clear that that cautionary letter for that one spare d v d part back in two thousand and eight or had any connection to ask for international to buy or even to ask for electronic  opportunity to fully respond to all of the bases the shared website that the two outs for us are allegedly one company or even their affiliate that they could have cleared up a lot of this and conducted their own information and provided evidence or a response to bad but they never had that opportunity and the only notice that they were given was that there was a sound strange gallery of which the government turned around and slapped them for taking down and said that they were trying to conceal that's the gallery do not come down until after they already responded to the thir requirement here and actual knowledge usually comes into play when there is a direct x part export to iran reason to know the lower level of knowledge comes into play when something has gone through a third country maximum that they could have received it is not anything higher that they contend it is not the higher overall statutory not some which was which is for many many different violations and intended for that they have no knowledge of any of their products going to iran and mind you the transshipment guidance here the facts behind the transshipment guidance is exactly the situation where a company actually they had actual knowledge that a few of those items ended up in iran and still facts