New guidance issued by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) clarifies that U.S. attorneys, compliance personnel, and others are not prohibited from providing services related to compliance with U.S. sanctions laws, even where sanctions would otherwise prohibit U.S. persons from direct or indirect involvement in the underlying business activities.
On January 12, 2017, OFAC published its "Guidance on the Provision of Certain Services Relating To the Requirements of U.S. Sanctions Laws" as well as updating its website to address five Frequently Asked Questions, regarding whether U.S. persons may provide, and whether U.S. persons have been able to provide in the past, certain types of legal and compliance services to covered persons. For purposes of the Guidance, OFAC defined "covered persons" to mean U.S. persons and foreign persons other than any person (i) whose property and interests in property are blocked pursuant U.S. sanctions, or (ii) to whom a U.S. person is prohibited from exporting services or from whom a U.S. person is prohibited from importing services pursuant to U.S. sanctions.
Specifically, the Guidance reflects that U.S. persons may (i) provide information or guidance regarding the requirements of U.S. sanctions laws administered by OFAC, including statutes, regulations, and Executive orders, and (ii) opine on the legality of specific transactions under U.S. sanctions laws, regardless of whether it would be prohibited for a U.S. person to engage in those transactions. The Guidance is not a change in OFAC's prior policy, nor is it intended to be an exhaustive list of the permitted services. Rather, OFAC describes the Guidance as a means to ensure that both U.S. and foreign individuals and entities understand that U.S. persons may provide these types of services, given the numerous inquiries that OFAC has received on the issue.
- The Guidance is not limited to the role of U.S. persons who are attorneys; it therefore covers non-lawyers providing services within the scope of the Guidance, such as compliance personnel and those providing assistance with sanctions due diligence. The Guidance expressly refers to conducting research to investigate the legality of particular transactions under U.S. law as permitted activities.
- The Guidance does not cover the provision of non-sanctions-related legal services.
- Different rules will apply where compliance-related services are being provided to a person or entity that is, itself, subject to direct sanctions under U.S. law.