On June 17, 2021, the US Department of Treasury’s Office of Foreign Assets Control (“OFAC“) issued General License N (“GL N“) authorizing certain COVID-19 related transactions and activities through June 16, 2022, involving Iran. The recent authorization from OFAC is an effort to “further aid the global fight against COVID-19” according to its press release. GL N is part of OFAC’s efforts under National Security Memorandum-1. This new authorization may provide much-needed support to Iran, which is greatly affected by the COVID-19 outbreak in conjunction with the broad restrictions imposed on trade with Iran due to U.S. sanctions.
GL N authorizes certain transactions and activites related to the diagnosis, treatement, or prevention of COVID-19. These transactions and activites range from the exportation of pandemic technology (e.g, surgical gloves, facial shields, respirators, etc.) to importation of non-functioning medical technology for the purposes of maintenance. The three major categories of activites that OFAC outlines in GLN is (1) exportation of goods or technology; (2) importation of, or dealings in, certain COVID-19 related goods and; (3) exportation or importation of COVID-19 related services. To ensure these transactions and activites can occur, OFAC is authorizing certain transactions to occur with the involvement of the Central Bank of Iran (“CBI”), as well as the National Iranian Oil Company (NIOC).
In addition to issuing GL N, OFAC issued six Frequently Asked Questions (“FAQs”), clarifying the scope and effect of GL N and other additional general licenses for similar purposes—FAQ 906, 907, 908, 909, 910, and 911. In particular, FAQ 910 explains OFAC’s expectations for US financial institutions when processing funds transfers (or trade finance transactions) when handling the abovementioned transactions. For example, a US financial institution can rely on the originator to ensure compliance with GL N so long as that financial institution does not definitely know the funds transferred are not in compliance with the GL N.
Additionally, according to FAQ 911, engaging in activites authorized by the GL N would not, generally, put a non-US person at risk of being designated as a Specially Designated National. However, understanding GLN and the potential risks that it carries can be complicated—even if the intent of the person using GL N is well intentioned. It is important to consult a U.S. sanctions attorney prior to engaging in any COVID-19 related trade with Iran.