On June 17, 2021, the US Treasury Department’s Office of Foreign Assets Control (“OFAC“) issued three pandemic-related general licenses (“GLs“) authorizing certain transactions and activities through June 16, 2022, involving Syria, Venezuela, Iran, or certain blocked entities in these countries. The new GLs are Syria General License No. 21, Venezuela General License No. 39, and Iran General License N, and they authorize certain transactions and activities related to the prevention, diagnosis, or treatment of COVID-19 (including research or clinical studies relating to COVID-19). According to OFAC’s press release, the GLs build upon OFAC’s existing humanitarian authorizations, including authorizations for COVID-19-related activities. The GLs are part of OFAC’s continued efforts under the National Security Memorandum – 1, which directed varous agencies, including OFAC, to review existing US sanctions to evaluate whether they are unduly hindering responses to the pandemic worldwide.
Companies that wish to rely on the GLs to engage in pandemic-related activities and services should review the GLs to confirm that their proposed activities are within the scope of the authorizations and that they are able to comply with the GL’s terms and conditions. For example, Venezuela General License No. 39 does not authorize dealings with certain Specially Designated Nationals (“OFAC“).
OFAC also issued six Frequently Asked Questions (“FAQs“) (FAQ 906, 907, 908, 909, 910, 911), clarifying the scope and effect of the GLs. Notably, FAQ 910 sets out OFAC’s expectations regarding the due diligence to be conducted by US financial institutions when processing funds transfers or trade finance transactions authorized under the GLs. Specifically, OFAC clarifies that US financial institutions may rely on the transfer originator with regard to compliance with the GLs, provided that the financial institution does not know or have reason to know that the funds transfer is not in compliance with the GLs.
We also note that according to FAQ 911, non-US persons do not risk exposure under US sanctions for engaging in activities that are authorized by the GLs with respect to US persons. In other words, engaging in activities within the scope of the GLs would not, without more, put a non-US person at risk of being designated as a Specially Designated National for providing “support” to a blocked person.
The authors acknowledge the assistance of Alexandra Pasch in this blog post.