The first FAQ (830) primarily repeats the guidance already provided on April 16, but with one clarifying addition. FAQ 830 – Repeating (Mostly) What Is Already out ThereĮxclusion of Iranian manufacturers of medical, safety, and hygiene-related products. With the new FAQs, OFAC has now released a fuller set of interpretations. That interpretation appears to have been fast-tracked in response to the COVID-19 pandemic. exempted the provision of agricultural commodities, food, medicine, and medical devices to entities in Iran, what about the entities themselves that are operating in Iran and manufacturing these items?Īs discussed in a Client Alert we provided in April, on April 16 OFAC published web guidance that, among other things, removed Iranian manufacturers of medicine, medical devices, PPE, hygiene items and several other products from OFAC’s interpretation of the "manufacturing sector of the Iranian economy,” provided they are manufacturing products for use in Iran and not for export from Iran. How will OFAC define these economic sectors, particularly with respect to the possibly gargantuan manufacturing sector? How broad is the class of “goods used in connection with” an identified sector? And although the E.O. After its issuance, OFAC provided a 90-day wind-down period for companies to complete their existing business with Iran, which ended on April 9. also threatens any persons operating in these sectors in Iran with the same blocking sanctions, and it threatens foreign financial institutions with correspondent account sanctions if they knowingly facilitate a significant financial transaction for such a supply of goods or services or otherwise for anyone blocked pursuant to the E.O. to or from Iran of significant goods or services used in connection with” the construction, mining, manufacturing, or textiles sectors of the Iranian economy. 13902 threatens persons (individuals and entities) with blocking sanctions if they knowingly engage in “a significant transaction for the. There is also an across-the-board exception related to ensuring the protection of life and prevention of injuries. 13902, and the meanings of the terms “knowingly” and “significant.” The sector definitions, however, are surprisingly not worded in an open-ended fashion, and two of the definitions – particularly the definition of the textiles sector – cover less than expected.
The new FAQs confirm earlier guidance and provide detailed but mostly unremarkable definitions of the four sectors of the Iranian economy, as well as the goods and services used in connection with those sectors, that are targeted by E.O.
In four new FAQs issued on June 5, OFAC provides a few surprises in its clarifications of the sector-based sanctions contained in Iran-related Executive Order 13902, which was issued this past January.
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