How the Office of Foreign Assets Control Affects Publishing

Who would have thought that the war on terrorism would affect scholarly publishing? But it has, because of the Department of the Treasury’s Office of Foreign Assets Control (OFAC). The debate boils down to trading “assets,” ensuring national security, and First Amendment rights.

OFAC History
OFAC’s roots date back to the Civil War. In 1861, Congress passed the Trading With the Enemy Act (TWEA), which prohibited transactions with the Confederacy. The Department of the Treasury served as the watchdog agency, as it does today. Since that time, there have been various renditions of the law to accommodate changing world events.

The U.S. Department of the Treasury created OFAC in 1950, after China invaded Korea, thereby extending the Korean War and alarming Washington with the potential for a third world war. In 1977, the International Emergency Economic Powers Act (IEEPA) was passed, giving presidents powers during times of “national emergency” to enact trade embargoes.

An exception to IEEPA was later issued that excluded materials imported for news publication or broadcast (the Berman Act; written by Congressman Howard Berman, D-CA), and in 1994 the Free Trade Agreement put additional limits on the president’s ability to restrict media materials.

OFAC Today
After 2001, OFAC was asked to create rules to enforce IEEPA. OFAC barred the provision of certain editorial services to authors from any of several embargoed countries, including Iran, Sudan, and Cuba, without special license and consideration from OFAC. The Institute of Electrical and Electronics Engineers (IEEE) protested this interpretation in a fall 2002 letter to OFAC, in which IEEE asserted that the services applied to accepted manuscripts are non-economic and used to validate or strengthen the science and to improve readability of the final article. In September 2003, OFAC told IEEE that although peer review was exempt from trade embargoes, a license would be required for activities such as copy editing.

After more than a year of negotiations and meetings with OFAC, IEEE succeeded in its mission to have the interpretation of the act, as it pertains to publishing, restated for the organization. In an April 2004 letter to IEEE, OFAC concluded that copy editing, stylizing, and peer reviewing as conducted by IEEE fall outside the regulatory process of OFAC. OFAC nonetheless stated that activities associated with “the substantive artistic alteration or enhancement” of manuscripts from embargoed nations would still require a license. OFAC posts its letter rulings on its web site in a section titled “Interpretative Rulings,” so that others can take guidance from them. The IEEE letter is at http://www.treas.gov/offices/eotffc/ofac/rulings/ia040504.pdf.

Publishing groups such as the Association of American Publishers (AAP) are questioning the Treasury Department’s authority over scientific publishing, claiming that basic publishing activities are protected by the First Amendment’s guarantee of freedom of the press. In fact, AAP’s Professional and Scholarly Publishing Division, the Association of American University Presses, the PEN American Center, and Arcade Publishing filed a lawsuit on September 27 asking a federal court to strike down OFAC regulations requiring publishers to seek license from the government to perform core publishing activities, calling restrictions on publishing contrary to the First Amendment and acts of Congress.