A PRIMER ON OFAC, THE JCPOA & CHANGES IN U.S.-IRAN SANCTIONS
What is OFAC?
The Office of Foreign Assets Control (OFAC) is a subsection of the United States Department of the Treasury. OFAC administers and enforces U.S. sanctions based on U.S. foreign policy and national security objectives. OFAC aims to prevent “prohibited transactions,” which means trade or financial transactions U.S persons are not allowed to engage in without prior authorization. For more information on OFAC, please see OFAC’s Home Page.
What is the JCPOA and how did it affect U.S. sanctions on Iran?
The Joint Comprehensive Plan of Action (JCPOA) is a multilateral agreement, commonly known as the “Iran nuclear deal” that removed various sanctions on Iranian entities. The JCPOA lifted U.S. secondary sanctions on non-U.S. entities doing business with Iran. However, the JCPOA had little effect on U.S. primary sanctions restricting trade with Iran under the Iranian Transactions and Sanctions Regulations (ITSR). Several important general licenses were issued after the implementation day of the JCPOA and they can be found in OFAC’s JCPOA Guidance.
What is the SDN List?
The Specially Designated Nationals (SDN) List names various people, entities, organizations, and vessels, which U.S. persons are prohibited from doing business with. Under no circumstance should a U.S. person engage in any transactions or dealings with persons or entities on this list.
Are there any other lists that I should be concerned with and how can I find or search these lists?
Yes, other lists that name sanctioned people, entities, organization, and vessels are called the Non-SDN Iran Sanctions Act List, E.O. 13599 List, and the Foreign Sanction Evaders List.
To search these lists, please use OFAC’s Sanctions List Search feature Here.
What is the difference between a General License and a Specific License?
OFAC only issues specific licenses to particular persons or entities after an application process. General licenses are broader and authorize a U.S. person to engage in a particular type of transaction without the need to apply for a license.
What general licenses have been granted by OFAC as it relates to U.S.-Iran trade?
OFAC has issued general licenses for the exportation to Iran of certain agriculture products, medicine, and medical supplies. These general licenses do not allow any export of these goods to military or law enforcement entities in Iran.
The agricultural license applies to products that are covered by the U.S. Export Administration Regulations (EAR). Agriculture products exported to Iran must be meant for use in Iran as food for humans (including vitamins and minerals) and animals, seeds for crops, fertilizers and organic fertilizers, and reproductive materials for food production.
If you are interested in engaging in business under the medical supplies general license, you should consult the list of approved products for export available Here.
If you are interested in engaging in business under the medicine general license, you should examine the definition of “medicine” in the U.S. regulations. The definitions for “medical device” and “medicine” are found in the U.S. Federal Food, Drug, and Cosmetic Act. Some items under this license also may be covered by the EAR, and would be marked as “EAR99.” The current list of Bureau of Industry and Security (BIS) EAR99 medical devices is available Here.
Finally, OFAC also issued general licenses allowing persons to bring into the United States Iranian-origin carpets, textile floor coverings and carpets used as wall hangings, and Iranian-origin food items intended for human consumption. For more information on these general licenses, please see the Department of the Treasury’s website Here.
How would my company obtain a specific license?
The USIRCC can inform you about the license application process required under U.S. laws and regulations. For your specific transactional needs, the USIRCC maintains a legal referral database, and can provide referrals to specialized sanctions or OFAC attorneys. For further guidance, please contact us at info@USIRCC.org.
Where can I learn more about U.S. sanctions as it relates to U.S.-Iran trade?
The USIRCC regularly provides guidance to businesses and individuals interested in learning more about the status of U.S.-Iran trade relations. In addition, you can visit OFAC’s resource center Here. You may also find updated answers relating to the JCPOA and Iran-related sanctions questions Here.