Specialist’s Mistake Reaches All the Way to Iran

Arriving at work each day, Apple retail employees expect they’ll be enriching lives, but one U.S. employee created even more impact when he refused to sell an iPhone to a Farsi-speaking customer in order to comply with export regulations. The incident generated immediate condemnation from Iranian-American groups who called the practice insulting, and demonstrated the difficulty of training employees of a global retail chain. According to a WSB-TV news story, on June 14th two people visited the North Point (Geo.) Apple store to buy an iPad. Sahar Sabet is a U.S. citizen residing in this country, and told the reporter she was attempting to purchase an iPad for her cousin in Iran. However, a male store employee overheard Sabet speaking Farsi to her uncle and questioned her about it. Sabet told the employee she was “from Iran,” and the employee then refused to sell her an iPad, citing U.S. export regulations and Apple’s sales policies. “Dicrimination. Racially profiled,” Sabit said of the incident. “He didn’t have any business asking me what country I was from.” The TV story was picked up by various Apple-related blogs, but also generated mainstream press stories, including from the Iranian news agency and Al-Jazeera. Apple did not directly address the incident, but did issue a statement to Al Jazeera. “Our retail stores are proud to serve customers from around the world of every ethnicity,” Apple said. “Our teams are multilingual, and diversity is an important part of our culture. We don’t discriminate against anyone.”

From Sabet’s account, it’s clear the employee was attempting to comply with government regulations on the exportation of products to other countries. The regulations are very complex and apply differently for almost every country on earth. However, a key element of the regulations is that they pertain to the “export” of products and not to the “sale” of products within the United States. One reason for that distinction in the regulations is that retailers would find it impossible to question every product buyer about their intent to export the product to another country and screen their purchases accordingly.

As part of its diplomatic efforts, and for various reasons, the United States has selectively cut diplomatic ties with and imposed economic sanctions on several countries. Five of those countries have received the most severe penalty of an import-export embargo: Cuba, Iran, North Korea, Sudan and Syria. In the case of Iran, the sanction were imposed for, “support for international terrorism and its aggressive actions against non-belligerent shipping in the Persian Gulf.”

The Iran sanctions (pdf), administered by the U.S. Department of the Treasury, prohibit the export, re-export or sales of goods, technology or services to the country or the government of Iran. The ban applies to any “U.S. person,” no matter where they are located, including U.S. citizens living or traveling in other countries.

In this case, Sabet told the TV reporter she was purchasing an iPad for her cousin in Iran. It’s not clear from the account if she admitted to the Apple store employee that she intended to export the iPad to Iran, an action that would be illegal under the sanction regulations. In any event, selling a product to Sabet and knowing she intended to export it would not be illegal under the export regulations.

Apple Position

In the WSB-TV account, the reporter returned to the North Point Apple store with Sabet, and another employee confirmed the sales policy. The employee referred the pair to the company’s on-line sales policy. In fact, that policy repeats the Treasury Department’s explanation of the regulations, as follows:

“The exportation, re-exportation, sale or supply, directly or indirectly, from the United States, or by a U.S. person wherever located, of any Apple goods, software, technology (including technical data), or services to any of these countries is strictly prohibited without prior authorization by the U.S. Government. This prohibition also applies to any Apple owned subsidiary or any subsidiary employee worldwide.”

The wording of the policy does not indicate that it’s illegal to sell Apple products to an individual, even if that individual intends to export the product to Iran.

According to various sources, Apple does train new employees on about U.S. export regulations in general, including that the company could experience substantial fines for violations or have the company’s export privileges revoked. The training emphasizes vigilance for non-compliance with the export regulations, and provides several examples of signs a buyer may not be in compliance: large cash payments for many products, direct requests for the store to export the product, or requests to send the product to a carrier like UPS or Fed-Ex. Employees are also trained to be alert to customer questions about warranties or electric compatibility in other countries.

None of Apple’s initial training includes the requirement or recommendation that retail store employees question customers about the intent to export the product to any country, including those on the Treasury Department sanction list. The training does not mention that employees use the customer’s language, race, clothing or any other visual method to help enforce the export regulations.

Instead, the training states employees should contact a store manager whenever an export compliance issue is suspected. Store managers have been trained to consult with the company’s export compliance department for information and advice on handling suspect purchases. Like other companies, in some cases Apple might request that a customer sign a letter certifying the purchased products will not be exported to a prohibited country.

International Reaction

Days after the WSB-TV story, the international press began to explore the incident, and included statements from various middle East and Iranian groups that denounced the employee’s actions.

An Al-Jazeera story quoted Jamal Abdi, the policy director of the National Iranian American Council (NIAC), saying that his group had received reports of similar incidents at other Apple stores involving U.S. citizens, and Iranians legally in the United States.

Of the Georgia incident, Abdi said, “The way that the employee seems to have arrived at this decision seems to be based on ethnic profiling.” The NIAC released a copy of a letter (pdf) they wrote to Apple CEO Tim Cook telling him the group was, “deeply concerned and outraged” over the incident.

The NIAC said its analysis of the U.S. export regulations showed that sales of Apple products to individuals was entirely legal. However, it did warn that sending an iPhone to Iran is illegal, even as a gift, and that it would be illegal, for example, for an Iranian student moving back to Iran to return with an iPhone.

In a separate move, the Council of American-Islamic Relations (CAIR) said it had contacted Apple about the incident, but did not say if Apple had any reaction. The group said it also had received other reports of customers being denied sales at Apple stores because they spoke Farsi. CAIR national executive director Nihad Awad told Al-Jazeera that the Apple store employee’s actions were like a store employee not selling the same items to Spanish-speakers because they might be from Cuba.

Writing from Tehran, the FARS news agency said, “Apple Stores have started racial profiling against Iranians, refusing to sell them iPads, iPhones, and other devices.” The story said Apple, “is going to find that it is in a very precarious position if the company is going to enforce these policies at the retail level.” FARS claims to be independent, although there is consensus among other news organizations that it is controlled by the government.

Both Sabet and FARS characterized the Apple store incident as “racial” profiling. However, sociologists consider citizens of Iran to be Indo-European, or the White race. The NIAC termed the incident “ethnic” profiling, which includes a broader view of a person, including their manner of dress, language and other cultural appearance.

Agence France Press spoke to “vendors of Apple products” in Iran to obtain reaction to the incident. They said that trade sanctions were easy to circumvent, with most products coming through Iraq.

Update: In mid-July Jamal Abdi, policy director at the National Iranian American Council, wrote an op-ed piece in The New York Times about the controversy. He noted that, “Apple has not been taken over by xenophobes,” but rather that store employees are simply trying to follow a set of complicated company policies intended to comply with U.S. export laws.