OFAC Issues Guidance, Expands COVID-19-Related Humanitarian Exemptions
The Office of Foreign Assets Control issued guidance and three new general licenses to expand humanitarian-related exemptions for shipments and activities in sanctioned countries. The licenses apply to Iran, Syria and Venezuela and are accompanied by six new frequently asked questions to “further support the critical work” of humanitarian and COVID-19 aid to people in sanctioned regions. The guidance comes amid criticism from humanitarian groups that U.S. sanctions continue to inadvertently block aid shipments (see 2105260047 and 2105280004).
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OFAC said the new general licenses “expand upon longstanding humanitarian exemptions” and cover more pandemic-related transactions than were previously authorized. “OFAC encourages those interested in providing COVID-19-related relief to Iran, Syria, and Venezuela to avail themselves of the available exemptions, exceptions, and authorizations pertaining to humanitarian assistance, including the COVID-19-related GLs issued today,” the agency said June 17. All three general licenses expire June 17, 2022.
New Iran General License N expands existing authorizations under OFAC’s Iran sanctions regime to cover items that previously needed a specific license to export to Iran, including certain COVID-19 testing and vaccine manufacturing equipment, along with other goods and technology. OFAC said those items include medical gowns, medical goggles, surgical gloves, respirators and masks, personal hygiene products, vaccines and “vaccine ingredients,” and software and technology for producing testing kits.
The agency added that certain COVID-19-related medical devices designated under the Export Administration Regulations as EAR99 that would normally require a specific OFAC license no longer require a specific license if they meet the conditions of the general license. The license also authorizes a host of activities “related to the exportation, reexportation, sale, or supply of such goods or technology,” including processing of funds, tax payments, import duties, use of public utility services and cargo inspection services. Also authorized are certain transactions with the Central Bank of Iran, the National Iranian Oil Co. and any company they own by 50% or more.
Syrian General License No. 21, authorizes many of the same transactions and activities, including those related to exports of COVID-19 diagnostic and treatment services. The license also allows certain transactions involving the Syrian government, Polymedics, Letia and any company those two entities own by 50% or more.
Under both the Syria and Iran licenses, OFAC said services “related to the prevention, diagnosis, or treatment” of COVID-19 include necessary training for the use of goods related to those services, “shelter activities,” community engagement efforts, the repair of goods, clinical studies, public education and more.
Venezuela General License No. 39 also authorized transactions and activities related to the prevention and treatment of COVID-19, including transactions with certain Venezuelan banks. Those include Banco Central de Venezuela; Banco de Venezuela, S.A. Banco Universal; Banco Bicentenario del Pueblo, de la Clase Obrera, Mujer y Comunas, Banco Universal C.A.; and any entity each of the three owns by 50% or more.
OFAC stressed that the license doesn’t authorize exports of goods, technology or services to the military, intelligence, or law enforcement purchasers or importers. It also doesn’t allow transactions or activities involving Petroleos de Venezuela, S.A., Banco de Desarrollo Economico y Social de Venezuela, Banco Bandes Uruguay or any entity they own by 50% or more.
The agency said U.S. banks and other financial institutions may “process transfers of funds or engage in trade finance transactions” to “give effect to the transactions and activities” authorized by the licenses. For due diligence purposes, OFAC said banks may “rely on the originator of the funds transfer with regard to compliance” with the licenses as long as the bank doesn’t have “reason to know” that the funds transfer doesn’t comply with the licenses. OFAC said non-U.S. people “do not risk exposure” to U.S. sanctions if they engage in activities authorized under the licenses.
The agency said it “stands ready” to issue more guidance and respond to specific license applications if U.S. exporters or humanitarian providers don’t think their transaction or activity falls under the licenses. For transactions not authorized by the licenses, OFAC said it will consider license requests case by case, prioritizing applications related to COVID-19 relief or other humanitarian support.