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 OFAC FAQs: Other Sanctions Programs

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Burma Sanctions

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481. If there is an active and ongoing investigation against an individual or entity for apparent violations of the Burmese Sanctions Regulations (“BSR”), would that investigation cease now that the President has ended economic and financial sanctions on Burma and the prohibitions in the BSR are no longer in effect?

Pending OFAC enforcement matters will proceed irrespective of the termination of OFAC-administered sanctions on Burma, and OFAC will continue to review apparent violations of the BSR, whether they came to the agency’s attention before or after the Burma sanctions program was terminated. Under longstanding practice, apparent sanctions violations are analyzed in light of the laws and regulations that were in place at the time of the underlying activities, and civil and criminal enforcement authorities are applied accordingly. Current or future investigations regarding apparent violations of the BSR will not be impacted by its termination and may result in OFAC enforcement actions after the termination of the BSR. [Published on 10-07-2016]


 

Cuba Sanctions

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Overview of the changes that have been made to the Cuba Sanctions program as a result of the President's announcement on December 17, 2014


For information regarding changes to the Cuba Sanctions Program, please see the following document.


 

Cyber-related Sanctions: Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities (Executive Order 13694), as amended

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444. How will Treasury decide whom to sanction under this authority?

Executive Order (E.O.) 13694, as amended on December 29, 2016, focuses on specific harms caused by significant malicious cyber-enabled activities, and directs the Secretary of the Treasury, in consultation with the Attorney General and the Secretary of State, to impose sanctions on those persons he determines to be responsible for or complicit in activities leading to such harms. Acting pursuant to delegated authority, Treasury’s Office of Foreign Assets Control (OFAC) works in coordination with other U.S. government agencies to identify individuals and entities whose conduct meets the criteria set forth in E.O. 13694, as amended, and designate them for sanctions. Persons designated under this authority are added to OFAC’s list of Specially Designated Nationals and Blocked Persons (SDN List).

E.O. 13694, as amended, is intended to address situations where, for jurisdictional or other issues, certain significant malicious cyber actors may be beyond the reach of other authorities available to the U.S. government. [12-29-2016]


445. What are my compliance obligations with respect to E.O. 13694, as amended?

As with many of the sanctions programs that Treasury administers, U.S. persons (and persons otherwise subject to OFAC jurisdiction) must ensure that they are not engaging in trade or other transactions with persons named on OFAC’s SDN List pursuant to E.O. 13694, as amended, or any entity owned by such persons.

As a general matter, U.S. persons, including firms that facilitate or engage in online commerce, are responsible for ensuring that they do not engage in unauthorized transactions or dealings with persons named on any of OFAC’s sanctions lists or operate in jurisdictions targeted by comprehensive sanctions programs. Such persons, including technology companies, should develop a tailored, risk-based compliance program, which may include sanctions list screening or other appropriate measures. An adequate compliance solution will depend on a variety of factors, including the type of business involved, and there is no single compliance program or solution suitable for every circumstance.

The names of, and identifying information for, all individuals and entities included on OFAC’s sanctions lists may be located via OFAC’s free, online search engine at the following URL: http://sanctionssearch.ofac.treas.gov. In addition, OFAC offers text and PDF versions of these lists for manual review and a number of data file versions of its lists that are designed to facilitate automated screening. Depending on the scale, sophistication, and risk profile of your business, you may consider one of the numerous commercially available screening software packages. [12-29-2016]


447. What will significant malicious “cyber-enabled” activities mean for the purposes of Executive Order (E.O.) 13694?

We anticipate that regulations to be promulgated will define “cyber-enabled” activities to include any act that is primarily accomplished through or facilitated by computers or other electronic devices. For purposes of E.O. 13694, malicious cyber-enabled activities include deliberate activities accomplished through unauthorized access to a computer system, including by remote access; circumventing one or more protection measures, including by bypassing a firewall; or compromising the security of hardware or software in the supply chain. These activities are often the means through which the specific harms enumerated in the E.O. are achieved, including compromise to critical infrastructure, denial of service attacks, or massive loss of sensitive information, such as trade secrets and personal financial information.

E.O. 13694 is tailored to address cyber-enabled activities that are reasonably likely to result in, or have materially contributed to, a significant threat to the national security, foreign policy, or economic health or financial stability of the United States. As this language indicates, it is intended to counter the most significant cyber threats that we face, whether they target our critical infrastructure, our companies, our citizens, or our economic health or financial stability. [4-1-2015]


448. I conduct cyber-related activities for legitimate educational, network defense, or research purposes only. Am I vulnerable to the application of sanctions under this authority for these activities?

The measures in this order are directed against significant malicious cyber-enabled activities that have the purpose or effect of causing specific enumerated harms, and are not designed to prevent or interfere with legitimate cyber-enabled academic, business, or non-profit activities. The U.S. government supports efforts by researchers, cybersecurity experts, and network defense specialists to identify, respond to, and repair vulnerabilities that could be exploited by malicious actors.

Similarly, these measures are not intended to target persons engaged in legitimate activities to ensure and promote the security of information systems, such as penetration testing and other methodologies, or to prevent or interfere with legitimate cyber-enabled activities undertaken to further academic research or commercial innovation as part of computer security-oriented conventions, competitions, or similar “good faith” events. [4-1-2015]


449. I administer a network for my employer and I regularly deny access to certain services and systems (e.g., retail websites, social media platforms) in order to ensure the performance of the network for authorized business activities. Could I or my employer be sanctioned for this?

The measures in this order are designed to address the threat posed by individuals and entities engaged in significant malicious cyber-enabled activities that have the purpose or effect of causing specific enumerated harms. These measures are not designed to prevent or interfere with legitimate network defense or maintenance activities performed by computer security experts and companies as part of the normal course of business on their own systems, or systems they are otherwise authorized to manage. [4-1-2015]


450. Will Treasury impose sanctions on persons whose personal computers (or other networked electronic devices) are, without their knowledge or consent, used in malicious cyber-enabled activities (e.g., in denial-of-service attacks against U.S. financial institutions)?

No. These sanctions are designed to target those actors whose malicious cyber-enabled conduct is reasonably likely to result in, or have materially contributed to, a significant threat to the national security, foreign policy, or economic health or financial stability of the United States. These measures are not intended to target victims of such activities, including the unwitting owners of compromised computers.

For more information about best practices for securing home networks and engaging in responsible online behavior, visit the Department of Homeland Security’s website at OnGuardOnline.gov. [4-1-2015]


451. How do financial sanctions relate to existing legal authorities in this context?

The United States’ whole-of-government strategy to combat cyber threats draws from a broad range of tools and authorities to respond to the growing and evolving threat posed by malicious cyber actors. Similar to our approach to global threats from terrorists, narcotics traffickers, and transnational criminal organizations, we will use financial sanctions in the fight against malicious cyber actors as a complement to existing tools, including diplomatic outreach and law enforcement authorities. [4-1-2015]


452. Are these sanctions consistent with international obligations?

As with all financial sanctions programs Treasury administers, these measures will be implemented in accordance with domestic law and our international obligations. [4-1-2015]


489. The President has amended E.O. 13694 to cover “misappropriation of information.” What does that term mean? Does that mean that Treasury will impose sanctions related to the publication of information by American whistleblowers or members of the press?

No. This authority does not target American whistleblower activity or constitutionally protected activity. The E.O. defines misappropriation to be the “taking or obtaining by improper means, without permission or consent, or under false pretenses.” Importantly, to be eligible for sanctions under this provision, an individual or entity must not only “misappropriate” information, but it must also do so with the purpose or effect of interfering with or undermining election processes or institutions. [12-29-2016]


The Designation of the Federal Security Service and Cyber General License 1, “Authorizing Certain Transactions with the Federal Security Service”(Print)

501. What does General License 1 (GL 1), “Authorizing Certain Transactions with the Federal Security Service,” authorize?

GL 1 authorizes transactions with the Federal Security Service (a.k.a. Federalnaya Sluzhba Bezopasnosti) (FSB) that are necessary and ordinarily incident to requesting, receiving, utilizing, paying for, or dealing in certain licenses and authorizations for the importation, distribution, or use of certain information technology products in the Russian Federation. It also authorizes transactions necessary and ordinarily incident to compliance with rules and regulations administered by, and certain actions or investigations involving, the FSB.

This general license does not authorize U.S. persons to transact with the FSB except for the limited purposes described above, nor does it authorize the exportation, reexportation, or provision of any goods, technology, or services to the Crimea region of Ukraine. [02-08-17]


502. What sanctions remain in place on the FSB following the issuance of GL 1?

GL 1 only authorizes certain transactions with the FSB acting in its administrative and law enforcement capacities. The GL was issued in order to ensure that U.S. persons engaging in certain business activities in Russia that are not otherwise prohibited are not unduly impacted. All other transactions involving any property within U.S. jurisdiction or within the possession or control of U.S. persons, in which the FSB has an interest, including all other transactions directly or indirectly with the FSB, remain prohibited unless exempt or otherwise authorized by OFAC. [02-08-17]


503. Does GL 1 authorize the exportation of hardware or software directly to the FSB, or where the FSB is the end user of such hardware and software?

No. GL 1 does not authorize the export of any goods, technology, or services directly or indirectly to the FSB or any other blocked person or entity, except for the limited purposes of complying with certain rules, regulations, and investigations involving the FSB or requesting certain licenses or authorizations for the importation, distribution, or use of information technology products in the Russian Federation. [02-08-17]


504. I understand that travel to Russia involves clearing Russian border control, which is part of the FSB. Do I need a license from OFAC to travel to Russia, or to clear Russian customs?

No, the sanctions on FSB do not apply to transactions by U.S. persons that are ordinarily incident to travel to or from Russia, including those transactions required to enter into or exit the country (i.e., complying with Russian border control requirements). [02-08-17]


Compliance for Internet and Web-based Activities

For additional information regarding OFAC compliance on the Internet, please see the following topic.


 

 

Somalia Sanctions: Private Relief Efforts

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129. Can I make a private donation to a charity that is delivering humanitarian assistance in Somalia?

Yes. Please visit USAID’s website for more information about how you can help. [08-04-2011]


130. Can my organization provide humanitarian assistance in Somalia?

Yes, non-governmental organizations may provide humanitarian assistance in Somalia without the need for a license from OFAC. Organizations considering entering Somali territory to conduct assistance operations should be aware that areas of Somalia are extremely unstable and dangerous, and should review the State Department’s Travel Warning for Somalia. Among the most powerful armed groups operating in Somalia is al-Shabaab, a Specially Designated Global Terrorist and a Foreign Terrorist Organization under U.S. law. U.S. persons should exercise caution not to provide funds or material support to this organization or other designated groups. [08-04-2011]


131. What if, in delivering humanitarian assistance, my organization unintentionally provides food or medicine to members of al-Shabaab?

Due to the dangerous and highly unstable environment combined with urgent humanitarian needs in south and central Somalia, some food and/or medicine delivered in these areas may end up in the hands of al-Shabaab members. Such incidental benefits are not a focus for OFAC sanctions enforcement. [08-04-2011]


132. What if, in delivering humanitarian assistance, my organization unintentionally provides cash to members of al-Shabaab?

U.S. persons should be extremely cautious in making cash payments in areas under the control of al-Shabaab. Al-Shabaab has, in the past, demanded “taxes” and “access” payments from assistance organizations. To the extent that such a payment is made unintentionally by an organization in the conduct of its assistance activities, where the organization did not have reason to know that it was dealing with al-Shabaab, that activity would not be a focus for OFAC sanctions enforcement. To the extent that an organization is facing demands for large or repeated payments in al-Shabaab-controlled areas, it should consult with OFAC prior to proceeding with its operations. [08-04-2011]


133. I have heard that certain U.S. humanitarian assistance organizations are exempted from the prohibition on making certain cash payments to al-Shabaab. Is that correct?

Under the current extreme circumstances on the ground, the Department of State and USAID and their contractors and grantees are authorized to engage in certain transactions in the conduct of their official assistance activities in Somalia, under rigorous controls aimed at preventing diversion of assistance or cash payments to designated parties.

Humanitarian assistance organizations that wish to apply for a contract or grant with the State Department or USAID should visit USAID’s website. [08-04-2011]


134. I have family members or friends in Somalia and would like to send remittances to them. Can I do that without violating OFAC sanctions?

Yes, you can send remittances to Somalia, as long as the transactions do not involve parties listed on OFAC’s Specially Designated Nationals and Blocked Persons List.

For additional information on OFAC’s Somalia-related sanctions programs, visit here. To request additional information from OFAC, please call the OFAC hotline at (800) 540-6322 or (202) 622-2490. [08-04-2011]


 

Sudan, Darfur, and South Sudan-related Sanctions

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Revocation of Certain Sanctions with Respect to Sudan and the Government of Sudan on October 12, 2017


528. How will sanctions with respect to Sudan and the Government of Sudan change on October 12, 2017?

Effective October 12, 2017, sections 1 and 2 of Executive Order (E.O.) 13067 of November 3, 1997 and all of E.O. 13412 of October 13, 2006 will be revoked, pursuant to E.O. 13761 of January 13, 2017, as amended by E.O. 13804 of July 11, 2017.

Sections 1 and 2 of E.O. 13067 and E.O. 13412 block the property of the Government of Sudan and generally prohibit U.S. persons from engaging in transactions with Sudan and the Government of Sudan.  As a result of the revocation of these sanctions provisions, effective October 12, 2017, U.S. persons will no longer be prohibited from engaging in transactions that were previously prohibited under the Sudanese Sanctions Regulations, 31 C.F.R. part 538 (SSR).   

Consistent with the revocation of these sanctions provisions, OFAC expects to remove the SSR from the C.F.R.  Pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), an OFAC license is still required for certain exports and reexports to Sudan of agricultural commodities, medicine, and medical devices as a result of Sudan’s inclusion on the State Sponsors of Terrorism List (SST List).  However, these exports and reexports are generally licensed by OFAC (see the subsequent FAQ below).

U.S. persons and non-U.S. persons will still need to obtain any licenses required by the Department of Commerce’s Bureau of Industry and Security (BIS) to export or reexport to Sudan certain items (commodities, software, and technology) that are on the Commerce Control List (CCL), Supp. No. 1 to part 774 of the Export Administration Regulations, 15 C.F.R. parts 730-774 (EAR).  In limited circumstances, U.S. persons and non-U.S. persons may also need to obtain licenses from BIS to export or reexport to Sudan items that are subject to the EAR but not specifically listed on the CCL (“EAR99” items) if such transactions implicate certain end-use or end-user concerns (see 15 C.F.R. part 744). [10-06-2017]


529. If certain sanctions on Sudan are being revoked, why is OFAC issuing a new general license authorizing exports and reexports of certain TSRA items to Sudan?

Because the October 12, 2017 revocation of certain sanctions does not remove Sudan from the SST List and does not affect the requirements of section 906 of TSRA, 22 U.S.C. § 7205, TSRA still requires a license for the export to the Government of Sudan or any other entity in Sudan of agricultural commodities, medicine, or medical devices.  Effective October 12, 2017, General License A authorizes exports and reexports of certain TSRA items to Sudan.  No OFAC license is required for financing of these exports and reexports.  General License A is available for review here. [10-06-2017]


530. How will the revocation of certain sanctions with respect to Sudan and the Government of Sudan affect OFAC’s Sudan-related general license at section 538.540 of the SSR that took effect on January 17, 2017?

The OFAC general license that took effect on January 17, 2017, which authorized all transactions prohibited under the SSR, will not be operable as of October 12, 2017.  This general license will no longer be needed to authorize U.S. persons to engage in transactions that were previously prohibited under the SSR.  As a result of the revocation of sanctions, U.S. persons may engage in these transactions without a general or specific OFAC license, effective October 12, 2017. [10-06-2017]


531. What U.S. economic and financial sanctions remain on Sudan?

The October 12, 2017 revocation of certain sanctions with respect to Sudan and the Government of Sudan:

  • Does not terminate the national emergency declared with respect to Sudan in E.O. 13067;
  • Does not affect OFAC sanctions related to the conflict in Darfur, which were imposed pursuant to E.O. 13400 of April 26, 2006; and
  • Does not affect OFAC designations of any Sudanese persons pursuant to sanctions authorities other than E.O.s 13067 and 13412.

Because Sudan remains on the SST List, the Terrorism List Governments Sanctions Regulations, 31 C.F.R. part 596 (TLGSR), prohibit U.S. persons from engaging in transfers from the Government of Sudan that would constitute a donation to a U.S. person, or with respect to which a U.S. person knows, or has reasonable cause to believe, would pose a risk of furthering terrorist acts in the United States.  See 31 C.F.R. §§ 596.201 and 596.504.  Notwithstanding this prohibition, a general license in the TLGSR authorizes U.S. persons to engage in financial transactions with respect to stipends and scholarships covering tuition and related educational, living, and travel expenses provided by the Government of Sudan to Sudanese nationals who are enrolled as students in an accredited educational institution in the United States.  See 31 C.F.R.  § 596.505.

As noted above, pursuant to TSRA, an OFAC license is still required for certain exports and reexports to Sudan of agricultural commodities, medicine, and medical devices as a result of Sudan’s inclusion on the SST List.  In order to authorize these exports and reexports of TSRA items, OFAC is issuing General License A (effective October 12, 2017) on its website.

Additionally, this revocation of sanctions does not eliminate the need to comply with other applicable provisions of law, including export control requirements pursuant to the EAR administered by BIS.  These requirements include restrictions that are maintained as a consequence of Sudan’s inclusion on the SST List and apply to certain exports and reexports of items on the CCL made by both U.S. persons and non-U.S. persons.  BIS also maintains end-use and end-user controls on the export and reexport to Sudan of EAR99 items by U.S. persons and non-U.S. persons. [10-06-2017]


532. Does the October 12, 2017 revocation of certain sanctions with respect to Sudan and the Government of Sudan impact pending or future OFAC enforcement investigations against individuals or entities for apparent violations of the SSR relating to activities that occurred prior to the effective date of the revocation?

No.  The revocation of certain sanctions on Sudan and the Government of Sudan will not affect past, present, or future OFAC enforcement investigations or actions associated with any apparent violations of the SSR relating to activities that, effective October 12, 2017, will no longer be prohibited but that occurred prior to that date.  Under longstanding practice, and consistent with Section 1 of E.O. 13761, apparent sanctions violations are analyzed in light of the laws and regulations that were in place at the time of the underlying activities, and civil and criminal enforcement authorities are applied accordingly.  Current or future investigations regarding apparent violations of the SSR that occurred prior to the effective date of the revocation of sanctions will not be impacted by the revocation of sanctions and may result in OFAC enforcement actions after the effective date of the revocation of sanctions. [10-06-2017]


General License Authorizing Transactions Involving Sudan (31 C.F.R. § 538.540) (Print)

506. Did OFAC make any changes to sanctions with respect to Sudan and the Government of Sudan on July 11, 2017?

No.  The President issued an executive order on July 11, 2017, extending the review period established by E.O. 13761 of January 13, 2017, which set forth criteria for the revocation of certain sanctions on Sudan and the Government of Sudan (GOS).  The new E.O. extends until October 12, 2017 the period of review of the GOS’ actions.  OFAC’s sanctions remain in place, as does the general license broadly authorizing most prohibited transactions with respect to Sudan (the “2017 Sudan Rule”), as described below. [07-12-2017]


490. What does the 2017 Sudan Rule do?

The 2017 Sudan Rule amends the Sudanese Sanctions Regulations, 31 C.F.R. part 538 (SSR), effective January 17 2017, to add a general license authorizing all transactions prohibited by the SSR and by Executive Orders 13067 and 13412. The general license does not eliminate the need to comply with other provisions of 31 C.F.R. chapter V or other applicable provisions of law, including any requirements of agencies other than OFAC. Such requirements include, for example, the Export Administration Regulations (15 C.F.R. parts 730 through 774) administered by the Bureau of Industry and Security of the Department of Commerce. [01-13-2017]


491. Does the 2017 Sudan Rule authorize transactions prohibited under the Darfur or South Sudan sanctions programs?

No. The 2017 Sudan Rule only authorizes transactions prohibited by the SSR and by Executive Orders 13067 and 13412. It does not authorize transactions that are prohibited under any other OFAC sanctions program, including transactions that are prohibited under the Darfur Sanctions Regulations, 31 C.F.R. part 546, the South Sudan Sanctions Regulations, 31 C.F.R. part 558, or Executive Orders 13400 or 13664. [01-13-2017]


492. In light of the issuance of the 2017 Sudan Rule, are U.S. persons still required to abide by the conditions of other general licenses in the SSR and on OFAC’s Sudan web page?

No. The 2017 Sudan Rule authorizes all transactions prohibited by the SSR and therefore is broader than – and supersedes – other general licenses in the SSR, such as the general licenses relating to noncommercial, personal remittances, 31 C.F.R. § 538.528; commercial sales, exportation, and reexportation of agricultural commodities, medicine, and medical devices, 31 C.F.R. § 538.523; and the exportation, reexportation, or provision of certain services, software, and hardware incident to personal communications, 31 C.F.R. § 538.533. As a result, U.S. persons may rely on the broader authorization in the 2017 Sudan Rule and do not need to abide by the narrower requirements of other general licenses under the SSR. OFAC’s general recordkeeping and reporting obligations continue to apply. See 31 C.F.R. §§ 501.601, 501.602. [01-13-2017]


493. Do U.S. persons engaging in activities pursuant to an Office of Foreign Assets Control (OFAC) specific license issued pursuant to the SSR need to renew such licenses or apply for additional specific licenses?

No. The 2017 Sudan Rule authorizes all transactions prohibited by the SSR and, therefore, effective January 17, 2017, U.S. persons are not required to renew or obtain a new specific license from OFAC to engage in activities prohibited by the SSR. Further, pursuant to 31 C.F.R. § 501.801, it is the policy of OFAC not to grant applications for specific licenses authorizing transactions to which the provisions of an outstanding general license are applicable. [01-13-2017]


494. Does the 2017 Sudan Rule impact pending or future OFAC enforcement investigations against individuals or entities for apparent violations of the SSR relating to activities that are now authorized by the 2017 Sudan Rule but that occurred prior to the effective date of such rule?

No. The 2017 Sudan Rule will not affect past, present, or future OFAC enforcement investigations or actions related to any apparent violations of the SSR relating to activities that are now authorized by the general license in the 2017 Sudan Rule but that occurred prior to the effective date of such rule. Under longstanding practice, apparent sanctions violations are analyzed in light of the laws and regulations that were in place at the time of the underlying activities, and civil and criminal enforcement authorities are applied accordingly. Current or future investigations regarding apparent violations of the SSR that occurred prior to the effective date of the 2017 Sudan Rule will not be impacted by the 2017 Sudan Rule and may result in OFAC enforcement actions after the effective date of the 2017 Sudan Rule. [01-13-2017]


Executive Order 13664, "Blocking Property of Certain Persons with Respect to South Sudan" (Print)

368. Are humanitarian aid groups prohibited from making payments to or otherwise transacting with non-designated individuals or entities in South Sudan, including militias and armed groups under the command or control of a designated individual?

An entity in South Sudan that is commanded or controlled by an individual designated under Executive Order 13664 is not considered blocked by operation of law. Payments, including “taxes” or “access payments,” made to non-designated individuals or entities under the command or control of an individual designated under E.O. 13664 do not, in and of themselves, constitute prohibited activity. U.S. persons should employ due diligence, however, to ensure that an SDN is not, for example, profiting from such transactions. [06-02-2014]


Non-Governmental Organization (NGO) Registration Numbers for Activities in Sudan (Print)

57. Are Non-Governmental Organizations (NGOs) involved in humanitarian or religious activities in Sudan still required to obtain an NGO registration number

No. The general license at 31 C.F.R. § 538.540 authorizes all transactions prohibited under the Sudanese Sanctions Regulations, 31 C.F.R. part 538, effective January 17, 2017. As a result, NGOs are no longer required to obtain an NGO registration number to operate in or transact with Sudan. [01-13-2017]


Exports of Agricultural Commodities, Medicine, and Medical Devices to Sudan
 

Effective January 17, 2017, a specific license is not required to export or reexport agricultural commodities, medicines, or medical devices to Sudan, as such transactions are generally licensed pursuant to 31 C.F.R. § 538.540. For further information regarding exports and reexports of agricultural commodities, medicine, and medical devices to Iran and Sudan pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), please see the following topic.


For information on Specific Software, Hardware, and Services Covered by General License D-1 for Iran and 31 CFR § 538.533 for Sudan (the "Personal Communications General Licenses"), please see the following topic.
  

Syria Sanctions

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The United States government is working with the international community to provide urgently needed humanitarian assistance to the Syrian people while applying comprehensive sanctions against the Government of Syria and targeted sanctions on key individuals and entities supporting the Assad regime, in order to continue pressuring the Syrian government to stop its human rights abuses and other illicit activities. The following frequently asked questions provide an overview of the U.S. Department of the Treasury’s Syria sanctions program and guidance to the public on sending remittances, goods and services, and charitable assistance to Syria.

For additional Treasury guidance on protecting charitable donations from abuse, please view this document or visit this website. Additional questions may be directed to Treasury’s Office of Foreign Assets Control (OFAC) hotline at (800) 540-6322 or (202) 622-2490.


225. Why does the United States have sanctions against Syria and what does that mean for me?

The United States has sanctioned the Syrian government, including the Central Bank of Syria, senior Syrian government officials, and individuals and entities supporting the Assad regime and/or responsible for human rights abuses in Syria, in order to reinforce the President’s call that Bashar al-Assad step down and to disrupt the Assad regime’s ability to finance its campaign of violence against the Syrian people. In addition, Treasury has sanctioned the Commercial Bank of Syria and a number of other entities under Executive Order 13382, an authority that targets proliferators of weapons of mass destruction (WMD) and their supporters. Over the years Treasury has applied a broad range of sanctions using several different authorities and Executive orders (E.O.s), including counter-terrorism (E.O. 13224), human rights abuses (E.O. 13572), and non-proliferation (E.O. 13382). The United States has also prohibited the exportation of services to Syria, and there have long been legal restrictions on what goods U.S. persons can export to Syria.

These sanctions mean that U.S. persons are not permitted to do business with individuals or entities on OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List), or with any entity 50 percent or more owned by an Specially Designated National (SDN), unless exempt or authorized by OFAC through a general or specific license.


226. How can I help the Syrian people while making sure to abide by the U.S. sanctions?

Recognizing that the Syrian people need many critical services and goods, OFAC has issued several general licenses that, among other things, allow all U.S. persons to send non-commercial, personal remittances to Syrian persons without needing to apply to OFAC for a separate or specific license. Moreover, U.S. persons may donate humanitarian goods like food and medicine to people in Syria, as long as such donations are consistent with Commerce and OFAC regulations.

Finally, OFAC has also issued a general license to allow nongovernmental organizations (NGOs) to engage in not-for-profit activities in Syria in support of humanitarian projects, democracy-building, education, and non-commercial development projects directly benefitting the Syrian people. Copies of all OFAC general licenses issued for Syria can be found here. For any activities that fall outside of these general licenses, specific authorization from OFAC would be required, unless the transactions fall within a small category that are exempt from regulation by statute.

As mentioned above, one of the goals of the U.S. sanctions on Syria is to reinforce the President’s call for Bashar al-Assad to step down and to disrupt the Assad regime’s ability to finance its campaign of violence against the Syrian people. OFAC can issue a specific license to authorize particular transactions that may otherwise be prohibited by the sanctions, as long as those transactions are in the foreign policy interests of the United States. For example, specific licenses may be issued on a case-by case basis to authorize charitable donations of funds that would otherwise be prohibited by the Syrian sanctions regime.


229. Do I need a specific license from OFAC to send U.S.-origin food or medicine to Syria?

No. You may send U.S.-origin food or medicine to Syria without a specific license from OFAC. The Department of Commerce, Bureau of Industry and Security (“BIS”), which maintains jurisdiction over the export of most items to Syria, does not require a license for the export of U.S.-origin food and most medicine to Syria. For further guidance regarding the exportation of items to Syria, including a list of such items, please review the BIS Syria Web page, or contact BIS by phone at (202) 482-4252.


230. Can I give donations to NGOs to help the Syrian people?

Yes. U.S. persons can give a charitable donation to U.S. or third-country NGOs, but U.S. persons cannot send such a donation directly to Syria or a Syrian entity without a specific license in order to try to protect the donations from being misused. U.S. depository institutions, including banks, and U.S.-registered money transmitters, are allowed to process transfers of funds to or from Syria on behalf of U.S. NGOs and third-country NGOs in support of the not-for-profit activities described in OFAC General License No. 11.*

These not-for-profit activities include: (1) activities to support humanitarian projects to meet basic human needs in Syria, including drought relief, assistance to refugees, internally displaced persons, and conflict victims, food and medicine distribution, and the provision of health services; (2) activities to support democracy building in Syria, including rule of law, citizen participation, government accountability, and civil society development projects; (3) activities to support education in Syria, including combating illiteracy, increasing access to education, and assisting education reform projects; and (4) activities to support non-commercial development projects directly benefiting the Syrian people, including preventing infectious disease and promoting maternal/child health, sustainable agriculture, and clean water assistance.

General License No. 11 does not authorize transactions with the Government of Syria or other blocked persons, except for limited transactions with the Government of Syria that are necessary for the above-described not-for-profit activities, such as payment of taxes and other fees.

*For guidance on specific questions with respect to charitable donations, NGOs, and the scope of General License No. 11, please reach out to OFAC. Contact information may be found here.


231. Can U.S. NGOs deliver humanitarian assistance directly to Syria?

Yes. U.S. NGOs may provide services to Syria in support of humanitarian projects in Syria without the need for a specific license from OFAC because this activity is covered under OFAC General License No. 11. However, other U.S. government authorities, including the BIS export requirements, may apply to the delivery of humanitarian assistance to Syria. For further guidance, please review the BIS Syria Web page or contact BIS or contact BIS by phone at (202) 482-4252.

NGOs considering entering Syria to conduct assistance operations should be aware that areas of Syria are extremely unstable and dangerous, and should review the State Department’s Travel Warning for Syria http://travel.state.gov/content/passports/english/alertswarnings/syria-travel-warning.html.

U.S. persons should exercise caution not to engage in prohibited transactions with the Syrian Government or any individual or entity on OFAC’s SDN list.


135. Are travel-related transactions permissible under the new Syria Executive order 13582?

Yes. The new Syria Executive order, Executive Order 13582, does not prohibit U.S. persons from engaging in transactions ordinarily incident to travel to or from any country, including importation of accompanied baggage for personal use, maintenance within any country including payment of living expenses and acquisition of goods or services for personal use, and arrangement or facilitation or such travel including nonscheduled air, sea, or land voyages. [08-17-11]


Syria General License No. 4: Exports or reexports to Syria of items subject to the Export Administration Regulations (Print)
136. What does the term "items" cover, and what is meant by items subject to the Export Administration Regulations?

For the purposes of OFAC Syria General License No. 4A, "items subject to the EAR" is defined at § 734.3 of the Export Administration Regulations ("EAR"), 15 C.F.R. Parts 730-774.The EAR are administered by the U.S. Department of Commerce, Bureau of Industry and Security ("BIS"). Note that BIS maintains authority to license exports and reexports to persons in Syria whose property and interests have been blocked pursuant to Executive Order 13606 (the “GHRAVITY E.O.”). For further guidance regarding the exportation or reexportation of items to Syria, please consult the EAR. You may also wish to review the BIS Syria Web page or contact BIS by phone at (202) 482-4252. [06-22-12]


137. Regarding OFAC Syria General License No. 4A, will I need a specific license from OFAC to export or reexport food or medicine to the Government of Syria?

The export or reexport of food or medicine that is subject to the EAR to the Government of Syria, other than medicine on the Commerce Control List that has not been licensed by BIS for export or reexport to Syria, does not require a specific license from OFAC.

As set forth in the EAR, which implements the Syria Accountability and Lebanese Sovereignty Restoration Act of 2003 ("SAA") and Executive Order 13338 of May 11, 2004, BIS does not require a license for the export or reexport of "EAR99" food and medicine; accordingly, EAR99 food and medicine can be exported or reexported to the Government of Syria on a "NLR" ("No License Required") basis, under the regulations administered by BIS.

Additionally, as set forth in the EAR, a BIS license is required for the export or reexport of medicine that is on the Commerce Control List ("CCL medicine"). If BIS has licensed the export or reexport of CCL medicine to the Government of Syria, no specific OFAC license is required. [06-22-12]


138. Does General License No. 4A authorize U.S. persons to export or reexport from a third country to Syria or the Government of Syria a foreign-made item with either no U.S. content or de minimis U.S. content?

General License No. 4A only applies to items that are subject to the EAR, as set forth in 15 C.F.R. § 734.3. If a foreign-made item located abroad is not subject to the EAR based on the regulations administered by BIS, the exportation or reexportation of such items by U.S. persons to the Government Syria and the reexportation of services incident to an exportation of such items to Syria are not authorized by General License No. 4A. Because Executive Order 13582 generally prohibits U.S. persons from engaging in transactions with the Government of Syria and separately prohibits the exportation, reexportation, sale, or supply, directly or indirectly, by a United States person, wherever located, of any services to Syria, such transactions remain prohibited. [06-22-12]


Syria General License No. 6 (Print)
227. May I continue to send money to family or friends in Syria?

Yes. OFAC General License No. 6 authorizes U.S. depository institutions, including banks, and U.S.-registered money transmitters, to process non-commercial, personal remittances to or from Syria, or for or on behalf of an individual ordinarily resident in Syria, provided the funds transfer is not by, to, or through the Government of Syria or any other person designated or otherwise blocked by OFAC. Such transactions do not require further authorization from OFAC. If banks or other institutions have questions about processing remittances, they can contact OFAC’s Sanctions Compliance and Evaluation Division via the OFAC hotline at (800) 540-6322 or (202) 622-2490.


228. May I send personal remittances through the Commercial Bank of Syria, the Syrian-Lebanese Commercial Bank, or the Syria International Islamic Bank (SIIB) to family or friends in Syria?

No. General License No. 6 does not authorize any transactions involving individuals or entities designated under E.O. 13382, which targets proliferators of weapons of mass destruction and their supporters, including the Commercial Bank of Syria, the Syrian Lebanese Commercial Bank, and the SIIB. On August 10, 2011, under Executive Order 13382, the Department of the Treasury designated the Commercial Bank of Syria for its involvement in proliferation activities, and also designated its subsidiary, the Syrian-Lebanese Commercial Bank. On May 30, 2012, the Department of the Treasury also designated the SIIB. Therefore, the use of these financial institutions is not authorized by General License No. 6.


Syria General License No. 11: Authorizing Services in Support of Nongovernmental Organizations’ Activities in Syria (Print)
205. Who is authorized to send money to support certain nongovernmental organizations’ activities?

U.S. depository institutions, U.S. registered brokers or dealers in securities, and U.S. registered money transmitters are authorized to process transfers of funds to or from Syria on behalf of U.S. and third-country nongovernmental organizations (NGOs), in support of the not-for-profit activities described in General License No. 11. These not-for-profit activities include: (1) activities to support humanitarian projects to meet basic human needs in Syria, including, but not limited to, drought relief, assistance to refugees, internally displaced persons, and conflict victims, food and medicine distribution, and the provision of health services; (2) activities to support democracy building in Syria, including, but not limited to, rule of law, citizen participation, government accountability, and civil society development projects; (3) activities to support education in Syria, including, but not limited to, combating illiteracy, increasing access to education, and assisting education reform projects; and (4) activities to support non-commercial development projects directly benefiting the Syrian people, including, but not limited to, preventing infectious disease and promoting maternal/child health, sustainable agriculture, and clean water assistance. Except for limited transactions with the Government of Syria, General License No. 11 does not authorize the transfer of funds to the Government of Syria or other blocked persons. [06-22-12]


206. As an individual, may I transfer funds directly to Syria in support of authorized NGO activities under General License No. 11?

No. Only U.S. depository institutions, U.S. registered brokers or dealers in securities, and U.S. registered money transmitters are authorized to process such transfers of funds, and only on behalf of U.S or third-country NGOs. Although individuals may not transfer funds directly to Syria in support of authorized NGO activities under General License No. 11, please note that, pursuant to General License No. 6, individuals may send noncommercial, personal remittances to individuals in Syria provided that, among other things, the Government of Syria is not involved. However, General License No. 6 provides that “noncommercial, personal remittances” do not include charitable donations of funds to or for the benefit of any entity or funds transfers for use in supporting or operating a business. Please see General License No. 6 for further details.

If you wish to donate funds in support of humanitarian work in Syria, you may do so by transferring funds to an NGO to support its work in Syria. If you wish to send a charitable donation directly to Syria, you must apply for specific authorization to transmit such funds. [06-22-12]


232. As an individual, can I send financial donations directly to Syria in support of charitable activities under General License No. 11?

No. Without a specific license, U.S. persons are not permitted to transfer financial donations directly to Syria or to NGOs in Syria. Therefore, if you wish to donate funds in support of humanitarian work in Syria, you may do so by giving funds to U.S. or third-country NGOs to support not-for-profit activities in Syria, per General License No. 11 and as described above.

If you still wish to send a charitable donation directly to Syria or to a Syrian NGO, you may apply to OFAC for specific authorization to transmit such funds. You should provide as much information as possible about how the funds would be transferred, the recipients, and the end use of the funds. Although General License No. 6 does not authorize charitable donations, as mentioned above non-commercial, personal remittances can be sent to Syria under GL No. 6.


Grave Human Rights Abuses by the Governments of Iran and Syria Via Information Technology (the “GHRAVITY E.O.”)


For information regarding the GHRAVITY E.O., please see the following topic.


Foreign Sanctions Evaders (FSEs) and Executive Order 13608 (Prohibiting Certain Transactions with and Suspending Entry into the United States of Foreign Sanctions Evaders with Respect to Iran and Syria)

For information regarding FSEs and Executive Order 13608, please see the following topic.


 

Ukraine-/Russia-related Sanctions: Sectoral Sanctions under Executive Order 13662, CAATSA

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370. What do the prohibitions in Directives 1 and 2 mean? Are they blocking actions?

The sectoral sanctions imposed on specified persons operating in sectors of the Russian economy identified by the Secretary of Treasury were done under Executive Order 13662 through Directives issued by OFAC pursuant to its delegated authorities. Directive 1, as amended on September 29, 2017 in accordance with the Countering Russian Influence in Europe and Eurasia Act of 2017 (CRIEEA) (Pub. L. 115-44, title II), prohibits transacting in, providing financing for, or otherwise dealing in debt of specified tenors or equity if that debt or equity was or is issued on or after the relevant sanctions effective date ("new debt" or "new equity") by, on behalf of, or for the benefit of the persons operating in Russia’s financial sector named under Directive 1, their property, or their interests in property.  The relevant tenors of prohibited debt are noted in the table below.


Period when the debt was issued

Applicable tenor of prohibited debt

On or after July 16, 2014 and before September 12, 2014

Longer than 90 days maturity

On or after September 12, 2014 and before November 28, 2017

Longer than 30 days maturity

On or after November 28, 2017

Longer than 14 days maturity

There were two prior versions of Directive 1, which were issued on July 16, 2014 and September 12, 2014, and which were superseded by the September 29, 2017 version of Directive 1.  The prior versions of Directive 1 prohibited the same activities, but involving debt of longer than 90 days maturity (July 16, 2014 version) and 30 days maturity (September 12, 2014 version) or equity if that debt or equity was issued on or after the date a person was determined to be subject to Directive 1.   

Directive 2, as amended on September 29, 2017 in accordance with CRIEEA, prohibits transacting in, providing financing for, or otherwise dealing in new debt of specified tenors by, on behalf of, or for the benefit of the persons operating in Russia’s energy sector named under the Directive 2, their property, or their interests in property.  The relevant tenors of prohibited debt are noted in the table below.


Period when the debt was issued

Applicable tenor of prohibited debt

On or after July 16, 2014 and before November 28, 2017

Longer than 90 days maturity

On or after November 28, 2017

Longer than 60 days maturity

There were two prior versions of Directive 2, which were issued on July 16, 2014 and September 12, 2014, and which were superseded by the September 29, 2017 version of Directive 2.  The prior versions of Directive 2 prohibited the same activities, but involving debt of longer than 90 days maturity if that debt was issued on or after the date a person was determined to be subject to Directive 2.

These actions pursuant to Directives 1 and 2 prohibit transactions by U.S. persons as defined in E.O. 13662, wherever they are located, and transactions within the United States. This action does not require U.S. persons to block the property or interests in property of the entities identified in the Directives, nor will persons identified in Directives 1 and 2 be added to the Specially Designated Nationals (SDN) List. U.S. persons should reject transactions or dealings that are prohibited by Directives 1 or 2, and to the extent required by Section 501.604 of the Reporting, Procedures and Penalties Regulations (31 C.F.R. part 501), U.S. persons must report to OFAC any rejected transactions within 10 business days. [9-29-2017]

371. What does OFAC interpret to be debt and equity? Are there other prohibited activities under Directives 1, 2, and 3? Can U.S. financial institutions continue to maintain correspondent accounts and process U.S. dollar-clearing transactions for the entities subject to these Directives?

Note:  On September 29, 2017, OFAC amended and reissued Directives 1 and 2 in accordance with Sections 223(b) and (c) of CRIEEA.  While the Directives are effective immediately, both Directives contain certain new prohibitions that will not come into effect until November 28, 2017, pursuant to CRIEEA.  In addition to these new prohibitions, the Directives continue to prohibit conduct that was prohibited by prior versions of the Directives.  OFAC plans to issue further guidance regarding the implementation of the new prohibitions in the Directives at a later date, including updating relevant FAQs to account for the new prohibitions that will come into effect on November 28, 2017.  For additional information regarding what the amended Directives prohibit, see FAQ 370. 

The term debt includes bonds, loans, extensions of credit, loan guarantees, letters of credit, drafts, bankers acceptances, discount notes or bills, or commercial paper. The term equity includes stocks, share issuances, depositary receipts, or any other evidence of title or ownership.

The prohibitions in Directive 1 apply to all transactions involving new debt with a maturity of longer than 30 days or new equity; all financing in support of such new debt or new equity; and any dealing in, including provision of services in support of, such new debt or new equity.

The prohibitions in Directive 2 apply to all transactions involving new debt with a maturity of longer than 90 days; all financing in support of such new debt; and any dealing in, including provision of services in support of, such new debt.

The prohibitions in Directive 3 apply to all transactions involving new debt with a maturity of longer than 30 days; all financing in support of such new debt; and any dealing in, including provision of services in support of, such new debt.

All the prohibitions in these Directives extend to rollover of existing debt, if such rollover results in the creation of new debt with a maturity of longer than 30 days (for persons subject to Directives 1 or 3) or longer than 90 days (for persons subject to Directive 2).

Transacting in, providing financing for, or otherwise dealing in any debt or equity issued by, on behalf of, or for the benefit of persons subject to Directives 1, 2, or 3 is permissible, if the debt or equity was issued prior to the date on which the person was determined to be subject to the relevant Directive. In addition, transacting in, providing financing for, or otherwise dealing in debt instruments with maturities of 30 days or less (issued by, on behalf of, or for the benefit of persons subject to Directives 1 or 3) or 90 days or less (issued by, on behalf of, or for the benefit of persons subject to Directive 2), even if they are issued after the sanctions effective date, is permissible. Transacting in, providing financing for, or otherwise dealing in new equity instruments of persons subject to Directives 2 and 3 is permissible. U.S. financial institutions may continue to maintain correspondent accounts and process U.S. dollar-clearing transactions for the persons subject to the Directives, so long as those activities do not involve transacting in, providing financing for, or otherwise dealing in transaction types prohibited by these Directives.

On September 12, 2014, OFAC amended and reissued Directive 1, changing the allowable maturity of debt instruments issued by, on behalf of, or for the benefit of persons subject to Directive 1 from longer than 90 days to longer than 30 days. Transacting in, providing financing for, or otherwise dealing in debt with maturity of 90 days or less issued by, on behalf of, or for the benefit of the persons identified under Directive 1 is not prohibited if such debt instruments were issued prior to September 12, 2014, and the terms of such instruments do not change subsequently (see FAQ 394 for additional detail on what constitutes the changing of terms). Rollovers of such instruments must comply with the 30-day maturity limit imposed on September 12, 2014. [9-29-2017]


372. Do Directives 1, 2, and 3 prohibit U.S. persons from entering into derivatives contracts linked to new debt or new equity issued by the entities subject to the Directives?

On September 12, 2014, OFAC issued General License 1A, which authorizes certain transactions involving derivative products that would otherwise be prohibited pursuant to Directives 1, 2, or 3. This General License 1A replaced and superseded General License No. 1, dated July 16, 2014, which authorized certain transactions involving derivative products that would have been prohibited pursuant to Directives 1 or 2. [9-12-2014]


373. Do the prohibitions imposed pursuant to the Directives also extend to entities owned 50 percent or more by one or more entities identified by these Directives, as per revised guidance OFAC issued on August 13, 2014?

Yes, these prohibitions apply to the named persons, their property, and their interests in property, which includes entities owned 50 percent or more by one or more persons identified as subject to the Directives.

On October 31, 2017, OFAC amended and reissued Directive 4 in accordance with Section 223(d) of the Countering America’s Adversaries Through Sanctions Act (CAATSA) (Pub. L. 115-44). For additional information regarding what amended Directive 4 prohibits, see FAQ #412. The amendments to Directive 4 do not change the applicability of OFAC’s 50 percent rule in the Directive 4 context. The references to “33 percent or greater ownership” and “ownership of a majority of the voting interests” in subsection 2 of Directive 4 refer to a Directive 4 SSI entity’s ownership interest in a deepwater, Arctic offshore, or shale project. [10-31-2017]


374. If I own a Kalashnikov product, is that product blocked by sanctions? Am I able to resell a Kalashnikov product at a gun show or other secondary market?

If a U.S. person is in possession of a Kalashnikov Concern product that was bought and fully paid for prior to the date of designation (i.e., no payment remains due to Kalashnikov Concern), then that product is not blocked and OFAC sanctions would not prohibit the U.S. person from keeping or selling the product in the secondary market, so long as Kalashnikov Concern has no interest in the transaction. New transactions by U.S. persons with Kalashnikov Concern are prohibited, however, and any property in which Kalashnikov Concern has an interest is blocked pursuant to OFAC’s designation of Kalashnikov Concern on July 16, 2014. If a U.S. person has an inventory of Kalashnikov Concern products in which Kalashnikov Concern has an interest (for example, the products are not fully paid for or are being sold on consignment), we advise that U.S. person to contact OFAC for further guidance on handling of the inventory. [7-16-2014]


375. If I have Kalashnikov products in my inventory, can I sell them?

If a U.S. person has an inventory of Kalashnikov Concern products in which Kalashnikov Concern has an interest (for example, the products are not fully paid for or are being sold on consignment), we advise that U.S. person to contact OFAC for further guidance on handling of the inventory. [7-16-2014]


391. Can U.S. persons issue and deal in new depositary receipts that are based on the equity of an entity subject to the Sectoral Sanctions Identification List (an SSI entity)?

In certain circumstances, yes. U.S. persons, including U.S. financial institutions, may issue and deal in depositary receipts that are based on equity issued by a person determined to be subject to Directive 1 prior to the date the person was determined to be subject to Directive 1. U.S. persons may not, however, deal in or issue depositary receipts that are based on equity issued by a person subject to Directive 1 on or after the sanctions effective date. Such transactions would constitute prohibited transactions or dealings in new equity under Directive 1. There are no equity-related prohibitions contained within Directives 2, 3, or 4, and thus U.S. persons are not prohibited from issuing or dealing in depositary receipts that are based on equity issued by persons subject only to those Directives. [9-12-2014]


392. How are banks expected to distinguish between transactions involving new versus old equity under Directive 1 if entities subject to Directive 1 issue new equity that utilizes the same International Securities Identification Number (ISIN) or other identifier as equity issued prior to the sanctions effective date?

Directive 1 prohibits U.S. persons from transacting in, providing financing for, or otherwise dealing in new equity for named persons, their property, or their interests in property. Directive 1 also prohibits such transactions from occurring in the United States. If a U.S. person decides to transact or otherwise deal in equity issued by an SSI entity prior to the sanctions effective date, the U.S. person should ensure that it is not transacting in, providing financing for, or otherwise dealing in the newly issued equity. To the extent that a U.S. person does in fact transact in, provide financing for, or otherwise deal in newly issued equity, such activity would constitute a violation of the prohibition set forth in Directive 1. [7-28-2014]


393. Does OFAC consider counterparty credit risk associated with derivatives transactions that are authorized pursuant to General License 1A to Executive Order 13662 to constitute new debt?

OFAC does not consider normal counterparty credit exposure encountered by a U.S. person to be an extension of credit when the U.S. person enters into an otherwise permissible derivatives transaction. U.S. persons engaging in such transactions should ensure that they do not hold, purchase, or sell the underlying asset in such transactions as described in Paragraph (b) of General License 1A. [7-28-2014]


394. If a U.S. person entered into a revolving credit facility or long-term loan arrangement for a person determined to be subject to Directives 1, 2, or 3 prior to the sanctions effective date, what are the restrictions on drawdowns from that facility? Do all drawdowns and disbursements pursuant to the parent agreement need to carry repayment terms of 30 days or less (for persons subject to Directives 1 and 3) or 90 days or less (for persons subject to Directive 2)?

Note:  On September 29, 2017, OFAC amended and reissued Directives 1 and 2 in accordance with Sections 223(b) and (c) of CRIEEA.  While the Directives are effective immediately, both Directives contain certain new prohibitions that will not come into effect until November 28, 2017, pursuant to CRIEEA.  In addition to these new prohibitions, the Directives continue to prohibit conduct that was prohibited by prior versions of the Directives.  OFAC plans to issue further guidance regarding the implementation of the new prohibitions in the Directives at a later date, including updating relevant FAQs to account for the new prohibitions that will come into effect on November 28, 2017.  For additional information regarding what the amended Directives prohibit, see FAQ 370.

If a U.S. person entered into a long-term credit facility or loan agreement prior to the sanctions effective date, drawdowns and disbursements with repayment terms of 30 days or less (for persons subject to Directives 1 and 3) or 90 days or less (for persons subject to Directive 2) are permitted. Drawdowns and disbursements whose repayment terms exceed the applicable authorized tenor are not prohibited if the terms of such drawdowns and disbursements (including the length of the repayment period, the interest rate applied to the drawdown, and the maximum drawdown amount) were contractually agreed to prior to the sanctions effective date and are not modified on or after the sanctions effective date. U.S. persons may not deal in a drawdown or disbursement initiated after the sanctions effective date with a repayment term of longer than 30 days (for persons subject to Directives 1 and 3) or 90 days (for persons subject to Directive 2), if the terms of the drawdown or disbursement were negotiated on or after the sanctions effective date. Such a newly negotiated drawdown or disbursement would constitute a prohibited extension of credit. [9-29-2017]


395. Do Directives 1, 2, and 3 prohibit U.S. persons from dealing in or processing transactions under a letter of credit that was issued on or after the sanctions effective date and that carries a term of longer than 30 days maturity (for Directives 1 and 3) or 90 days maturity (for Directive 2) when the beneficiary or the issuing bank of that letter of credit is one of the entities identified as subject to the Directives?

Note:  On September 29, 2017, OFAC amended and reissued Directives 1 and 2 in accordance with Sections 223(b) and (c) of CRIEEA.  While the Directives are effective immediately, both Directives contain certain new prohibitions that will not come into effect until November 28, 2017, pursuant to CRIEEA.  In addition to these new prohibitions, the Directives continue to prohibit conduct that was prohibited by prior versions of the Directives.  OFAC plans to issue further guidance regarding the implementation of the new prohibitions in the Directives at a later date, including updating relevant FAQs to account for the new prohibitions that will come into effect on November 28, 2017.  For additional information regarding what the amended Directives prohibit, see FAQ 370.

U.S. persons may deal in (including act as the advising or confirming bank or as the applicant (i.e., the purchaser of the underlying goods or services)) or process transactions under a letter of credit in which an entity subject to Directive 1, 2, or 3 is the beneficiary (i.e., the exporter or seller of the underlying goods or services) because the subject letter of credit does not represent an extension of credit to the SSI entity. U.S. persons may deal in (including act as the advising or confirming bank or as the applicant or beneficiary) or process transactions under a letter of credit where the issuing bank is an SSI entity provided that the terms of all payment obligations under the letter of credit conform with the debt prohibitions under the applicable Directives. For example, a U.S. bank acting as the negotiating bank for a letter of credit issued by an SSI entity subject to Directive 1 should ensure that it receives reimbursement from the SSI entity within the allowable 30-day debt limit.

U.S. persons may not deal in (including act as the advising or confirming bank or as the beneficiary) or process transactions under a letter of credit if all of the following three conditions are met: (1) the letter of credit was issued on or after the sanctions effective date, (2) the letter of credit carries a term of longer than 30 days maturity (for persons subject to Directives 1 and 3) or 90 days maturity (for persons subject to Directive 2), and (3) an SSI entity is the applicant of the letter of credit. This would constitute prohibited activity because the subject letter of credit would represent an extension of credit to the SSI entity. [9-29-2017]


396. How do I know when a name has been added, changed, or removed on the Sectoral Sanctions Identifications (SSI) List?

The SSI List available on OFAC's website is the latest version of the list and contains the most updated information on entities determined to be subject to one or more of the Directives. OFAC also maintains "changes files" that record all significant changes to the SSI List. Any addition, alteration, or removal of an SSI record is considered a significant change and will appear in these files along with the date that such an action occurred. These files are offered in two formats and are called SSINEW14.PDF and SSINEW14.TXT. The changes files are produced by year, thus future file names will be SSINEW15.PDF and SSINEW15.TXT and so on. [9-12-2014]


404. Is the term "new equity" in Directive 1 limited to equity that is issued by an SSI entity after the sanctions effective date or would equity purchased or acquired by an SSI entity from a third party after the sanctions effective date be considered new equity?

The equity prohibitions in Directive 1 pertain to equity issued directly or indirectly, by an SSI entity on or after the sanctions effective date. Directive 1 does not prohibit U.S. persons from dealing with an SSI entity as counterparty to transactions involving equity issued by a non-sanctioned party. [9-12-2014]


405. Does the prohibition on “otherwise dealing in new debt” of longer than 30 days maturity (for persons subject to Directives 1 and 3) or 90 days (for persons subject to Directive 2) of SSI entities, their property, or their interests in property prohibit dealing in debt with maturity that exceeds the applicable authorized tenor in which the SSI entity is not directly or indirectly the borrower?

Note:  On September 29, 2017, OFAC amended and reissued Directives 1 and 2 in accordance with Sections 223(b) and (c) of CRIEEA.  While the Directives are effective immediately, both Directives contain certain new prohibitions that will not come into effect until November 28, 2017, pursuant to CRIEEA.  In addition to these new prohibitions, the Directives continue to prohibit conduct that was prohibited by prior versions of the Directives.  OFAC plans to issue further guidance regarding the implementation of the new prohibitions in the Directives at a later date, including updating relevant FAQs to account for the new prohibitions that will come into effect on November 28, 2017.  For additional information regarding what the amended Directives prohibit, see FAQ 370.

Directives 1 and 3 prohibit U.S. persons from dealing in debt of longer than 30 days maturity and Directive 2 prohibits U.S. persons from dealing in debt of longer than 90 days maturity issued on or after the sanctions effective date in cases where the new debt is issued by an SSI entity subject to these Directives. Directives 1, 2, and 3 do not prohibit U.S. persons from dealing with an SSI entity as counterparty to transactions involving debt issued on or after the sanctions effective date by a non-sanctioned party. For example, U.S. persons are not prohibited from dealing in a loan exceeding the applicable authorized tenor that is issued after the sanctions effective date of sanctions provided by an SSI entity to a non-sanctioned third-party, dealing with an SSI entity who is the underwriter on new debt of a non-sanctioned third party exceeding the applicable authorized tenor, or accepting payment under a letter of credit with terms exceeding the applicable authorized tenor that is issued, advised, or confirmed by an SSI entity, so long as the SSI entity is not the borrower. [9-29-2017]


406. Does the prohibition on dealing in new equity of entities subject to Directive 1 apply to transactions in which those entities are not the issuer of the equity?

U.S. persons are not prohibited from dealing in new equity with an entity subject to Directive 1 if the entity is not the issuer of the equity. For instance, U.S. persons are not prohibited from transacting with an entity subject to Directive 1 in support of new equity where the entity subject to Directive 1 is the underwriter of the equity and not the issuer. [8-27-2014]


407. May a U.S. person consent to a replacement of its participation by a non-U.S. person in a long-term loan facility that was extended to a person subject to Directives 1, 2, or 3 prior to the sanctions effective date?

A U.S. person is not prohibited by Directives 1, 2, or 3 from engaging in transactions necessary to exit or replace its participation in a long-term loan facility that was extended to an SSI entity prior to the sanctions effective date. This would not constitute dealing in new debt. U.S. persons involved in such facilities should ensure that all newly negotiated drawdowns or disbursements from the facility utilize repayment terms that are not prohibited by the applicable sanctions effective date. See FAQ 394 for additional information on what constitutes a permitted drawdown or disbursement from an existing long-term loan obligation. [9-12-2014]


408. Is a U.S. person permitted under Directives 1, 2, or 3 to extend credit for greater than 30 days (for persons subject to Directives 1 or 3) or 90 days (for persons subject to Directive 2) to a non-sanctioned party for the purpose of purchasing goods or services from a person subject to Directives 1, 2, or 3?

Note:  On September 29, 2017, OFAC amended and reissued Directives 1 and 2 in accordance with Sections 223(b) and (c) of CRIEEA.  While the Directives are effective immediately, both Directives contain certain new prohibitions that will not come into effect until November 28, 2017, pursuant to CRIEEA.  In addition to these new prohibitions, the Directives continue to prohibit conduct that was prohibited by prior versions of the Directives.  OFAC plans to issue further guidance regarding the implementation of the new prohibitions in the Directives at a later date, including updating relevant FAQs to account for the new prohibitions that will come into effect on November 28, 2017.  For additional information regarding what the amended Directives prohibit, see FAQ 370.

Directives 1, 2, and 3 do not prohibit U.S. persons from extending credit for longer than 30 days (for persons subject to Directives 1 or 3) or 90 days (for persons subject to Directive 2) to non-sanctioned parties for the purpose of purchasing goods or services from an SSI entity, so long as the SSI entity is not the indirect borrower. [9-29-2017]


409. If a person determined to be subject to Directives 1, 2, or 3 makes successive draws under a short-term facility created after the sanctions effective date (e.g., it borrows $100 million with a 15-day maturity, then at the end of the 15 days, the debt “rolls over”), does the facility become prohibited if the SSI borrower makes successive short-term borrowings that cumulatively add up to more than 30 days (for persons subject to Directives 1 or 3) or 90 days (for persons subject to Directive 2)?

Note:  On September 29, 2017, OFAC amended and reissued Directives 1 and 2 in accordance with Sections 223(b) and (c) of CRIEEA.  While the Directives are effective immediately, both Directives contain certain new prohibitions that will not come into effect until November 28, 2017, pursuant to CRIEEA.  In addition to these new prohibitions, the Directives continue to prohibit conduct that was prohibited by prior versions of the Directives.  OFAC plans to issue further guidance regarding the implementation of the new prohibitions in the Directives at a later date, including updating relevant FAQs to account for the new prohibitions that will come into effect on November 28, 2017.  For additional information regarding what the amended Directives prohibit, see FAQ 370.

Two conditions must be met for short-term facilities created after the sanctions effective date to be permissible. As long as (1) each individual disbursement has a maturity of 30 or 90 days or less (depending on the applicable Directive) and the disbursement is paid back in full before the next disbursement and (2) the lender is not contractually required to roll over the balance for a cumulative period of longer than 30 or 90 days (depending on the applicable Directive) at the borrower’s request (i.e., it has the option to refuse the request for a new short-term loan and terminate the facility), the loan is not prohibited, even though the same borrower may obtain a series of short-term loans from the same lender over a cumulative period exceeding 30 or 90 days (depending on the applicable Directive). U.S. persons may not deal in a drawdown or disbursement initiated after the sanctions effective date with a repayment term of longer than the applicable authorized tenor if the terms of the drawdown or disbursement are negotiated or re-negotiated on or after the sanctions effective date. Such a newly negotiated drawdown or disbursement would constitute a prohibited extension of credit. [9-29-2017]


410. Are U.S. persons prohibited from entering into new contracts after the sanctions effective date with persons subject to Directives 1, 2, or 3 that provide payment terms to the SSI entities of greater than 30 days (for persons subject to Directives 1 or 3) or 90 days (for persons subject to Directive 2)? For instance, if a U.S. person agrees to sell shares or assets to an SSI entity in a corporate transaction that becomes effective on or after the sanctions effective date, is the U.S. person prohibited from agreeing to deferred purchase payments, even if no interest is involved, that may be paid more than the permissible number of days later by the SSI entity?

Note:  On September 29, 2017, OFAC amended and reissued Directives 1 and 2 in accordance with Sections 223(b) and (c) of CRIEEA.  While the Directives are effective immediately, both Directives contain certain new prohibitions that will not come into effect until November 28, 2017, pursuant to CRIEEA.  In addition to these new prohibitions, the Directives continue to prohibit conduct that was prohibited by prior versions of the Directives.  OFAC plans to issue further guidance regarding the implementation of the new prohibitions in the Directives at a later date, including updating relevant FAQs to account for the new prohibitions that will come into effect on November 28, 2017.  For additional information regarding what the amended Directives prohibit, see FAQ 370.

Directives 1 and 3 prohibit new extensions of credit to SSI entities of greater than 30 days maturity and Directive 2 prohibits new extensions of credit to SSI entities of greater than 90 days maturity, and these prohibitions include deferred purchase agreements extending payment terms of longer than 30 days or 90 days (depending on the applicable Directive) to an SSI entity. Such agreements would constitute a prohibited extension of credit to an SSI entity if the terms were longer than the permissible number of days and the agreement was entered into on or after the sanctions effective date. OFAC does not consider the inclusion of an interest rate to be a necessary condition for establishing whether a transaction represents new debt. [9-29-2017]


411. What does the prohibition contained in Directive 3 under Executive Order 13662 mean? What is the scope of prohibited services?

OFAC issued Directive 3, introducing new prohibitions on all transactions in, provision of financing for, and other dealings in new debt of longer than 30 days maturity of persons determined to be subject to the Directive, their property, or their interests in property. Transactions by U.S. persons or within the United States involving derivative products whose value is linked to an underlying asset that constitutes new debt with maturity of longer than 30 days issued by a person subject to Directive 3 are authorized by General License 1A pursuant to Executive Order 13662. [9-12-2014]


412. What do the prohibitions contained in Directive 4 mean? What is the scope of prohibited services?

Directive 4, as amended on October 31, 2017 in accordance with CAATSA, imposes two prohibitions on the provision, exportation, or reexportation of goods, services (except for financial services), or technology for certain activities involving persons subject to Directive 4, their property, or their interests in property, operating in the energy sector of the Russian Federation.
First, Directive 4 prohibits the direct or indirect provision, exportation, or reexportation of goods, services (except for financial services), or technology in support of exploration or production for deepwater, Arctic offshore, or shale projects that have the potential to produce oil in the Russian Federation, or in maritime area claimed by the Russian Federation and extending from its territory, and that involve any person determined to be subject to Directive 4 or such person’s property or interests in property.

Second, pursuant to section 223(d) of Title II of CAATSA, Directive 4 further prohibits the direct or indirect provision, exportation, or reexportation of goods, services (except for financial services), or technology in support of exploration or production for deepwater, Arctic offshore, or shale projects that meet all three of the following criteria: (1) the project was initiated on or after January 29, 2018; (2) the project has the potential to produce oil in any location; and (3) any person determined to be subject to Directive 4 or any earlier version thereof, including their property or interests in property, either has a 33 percent or greater ownership interest in the project or owns a majority of the voting interests in the project.

The prohibitions on the exportation of services include, for example, drilling services, geophysical services, geological services, logistical services, management services, modeling capabilities, and mapping technologies. The prohibitions do not apply to the provision of financial services, e.g., clearing transactions or providing insurance related to such activities.

When Directive 4 was implemented on September 12, 2014, OFAC contemporaneously issued General License 2, which authorized for 14 days all services and activities prohibited by Directive 4 that are ordinarily incident and necessary to the wind down of operations, contracts, or other agreements involving persons determined to be subject to Directive 4. In order to qualify under this General License, a transaction must have (1) occurred prior to 12:01 a.m. eastern daylight time on September 26, 2014, and (2) been related to operations, contracts, or agreements that were in effect prior to September 12, 2014. General License 2 did not authorize any new provision, exportation, or re-exportation of goods, services, or technology except as needed to cease operations, contracts, or other agreements involving affected projects.

See section 746.5 of the Export Administration Regulations (15 C.F.R. parts 730 through 774) for the Department of Commerce’s related license requirement on exports of certain goods for specified deepwater, Arctic offshore, or shale projects. [10-31-2017]


413. For the purposes of Directive 4, how does OFAC define "deepwater" projects that have the potential to produce oil?

A project is considered to be a deepwater project if the project involves underwater activities at depths of more than 500 feet. [9-12-2014]


414. Does Directive 4 apply to projects that have the potential to produce gas?

If a deepwater, Arctic offshore, or shale project has the potential to produce oil, and the other requirements for either of the Directive 4 prohibitions are fully satisfied, then the relevant Directive 4 prohibition applies, irrespective of whether the project also has the potential to produce gas. If the project has the potential to produce gas only, then the Directive 4 prohibitions do not apply. [10-31-2017]


415. For persons determined to be subject to multiple Directives, how do the prohibitions and exemptions listed under one Directive affect prohibitions and exemptions under the other Directives?

Note:  On September 29, 2017, OFAC amended and reissued Directives 1 and 2 in accordance with Sections 223(b) and (c) of CRIEEA.  While the Directives are effective immediately, both Directives contain certain new prohibitions that will not come into effect until November 28, 2017, pursuant to CRIEEA.  In addition to these new prohibitions, the Directives continue to prohibit conduct that was prohibited by prior versions of the Directives.  OFAC plans to issue further guidance regarding the implementation of the new prohibitions in the Directives at a later date, including updating relevant FAQs to account for the new prohibitions that will come into effect on November 28, 2017.  For additional information regarding what the amended Directives prohibit, see FAQ 370.

Each Directive operates independently of the others. If a transaction involves a person subject to two Directives, for example, a U.S. person engaging in that transaction must comply with the requirements of both Directives. Exemptions in one Directive apply only to the prohibitions contained in that Directive and do not carry over to another Directive. For example, if a person is subject to both Directive 2 and Directive 4, the exemption for the provision of financial services by U.S. persons or in the United States under Directive 4 does not supersede the prohibition in Directive 2 on dealing in debt of longer than 90 days maturity of such a person. For these reasons, when OFAC references a prohibition involving an "SSI entity" in these FAQs or in other guidance, it is referring to an entity subject to the Directive(s) at issue in a particular FAQ or piece of guidance. [9-29-2017]


416. What does the "sanctions effective date" mean in the context of sectoral sanctions pursuant to E.O. 13662?

For purposes of the sectoral sanctions, "sanctions effective date" means the date a person is determined to be subject to the prohibition(s) of the relevant Directive. When a person has been previously determined to be subject to a Directive and the prohibitions in the Directive are subsequently amended, (1) the sanctions effective date for the prohibitions of the original Directive remains the date on which the person was identified as subject to the prohibitions of that Directive, and (2) the sanctions effective date for the prohibitions in the amended Directive is the date of the amendment (or other date specified in the amended Directive). [10-31-2017]


418. How does OFAC interpret the term "shale projects" with respect to the prohibitions in Directive 4 under Executive Order 13662?

The term "shale projects" applies to projects that have the potential to produce oil from resources located in shale formations. Therefore, as long as the projects in question are neither deepwater nor Arctic offshore projects, the prohibitions in Directive 4 do not apply to exploration or production through shale to locate or extract crude oil (or gas) in reservoirs. [10-31-2017]


419. How should U.S. persons account for the 30- and 90-day debt prohibitions under Directives 1, 2, and 3 as they relate to payment terms for the following types of transactions: (1) the sale of goods to an SSI entity, (2) the provision of services to and subscription arrangements involving SSI entities, and (3) progress payments for long-term projects?

Note:  On September 29, 2017, OFAC amended and reissued Directives 1 and 2 in accordance with Sections 223(b) and (c) of CRIEEA.  While the Directives are effective immediately, both Directives contain certain new prohibitions that will not come into effect until November 28, 2017, pursuant to CRIEEA.  In addition to these new prohibitions, the Directives continue to prohibit conduct that was prohibited by prior versions of the Directives.  OFAC plans to issue further guidance regarding the implementation of the new prohibitions in the Directives at a later date, including updating relevant FAQs to account for the new prohibitions that will come into effect on November 28, 2017.  For additional information regarding what the amended Directives prohibit, see FAQ 370.

U.S. persons may engage in commercial transactions with SSI entities provided that any such transactions do not represent a direct or indirect dealing in prohibited debt or equity. Because offering payment terms of longer than 30 or 90 days to an SSI entity generally constitutes a prohibited dealing in debt of the SSI entity, U.S. persons should ensure that payment terms conform with the applicable debt prohibitions. For sales of goods to an SSI entity, U.S. persons may extend payment terms of up to 30 or 90 days from the point at which title or ownership of the goods transfers to the SSI entity. For the provision of services to, subscription arrangements involving, and progress payments for long-term projects involving SSI entities, U.S. persons may extend payment terms of up to 30 or 90 days from the point at which a final invoice (or each final invoice) is issued. Payments made under these types of payment terms should utilize a value date of not later than 30 or 90 days from either the point at which title or ownership has transferred (for payments relating to sales of goods) or the date of each final invoice (for payments relating to services, subscription arrangements, and progress payments). In the event that a U.S. person believes that it may not receive payment in full by the end of the 30- or 90-day period, the U.S. person should contact OFAC to determine whether a license or other authorization is required. [9-29-2017]


420. Under Directive 4, does the term "production" encompass activities such as transportation, refining, or other dealings in oil extracted from deepwater, Arctic offshore, or shale projects?

For the purposes of Directive 4, the term "production" refers to the lifting of oil to the surface and the gathering, treating, field processing, and field storage of such oil. The production stage of a project ends when extracted oil is transported out of a field production storage tank or otherwise off of a field production site. Directive 4 does not prohibit the provision by U.S. persons or within the United States of goods, technology, or services to SSI entities when such transactions relate only to the transportation, refining, or other dealings involving oil that has already been extracted from a deepwater, Arctic offshore, or shale project and transported out of a field production storage tank or otherwise off of a field production site. [12-11-2014]


421. How does OFAC interpret the term "Arctic offshore projects" with respect to the prohibitions in Directive 4 under Executive Order 13662?

The term "Arctic offshore projects" applies to projects that have the potential to produce oil in areas that (1) involve drilling operations originating offshore, and (2) are located above the Arctic Circle. The prohibitions do not apply to horizontal drilling operations originating onshore where such drilling operations extend under the seabed to areas above the Arctic Circle. [10-31-2017]


536. For purposes of subsection 2 of Directive 4, what does it mean for a project to be “initiated”?

For purposes of subsection 2 of Directive 4, a project is “initiated” when a government or any of its political subdivisions, agencies, or instrumentalities (including any entity owned or controlled directly or indirectly by any of the foregoing) formally grants exploration, development, or production rights to any party.  [10-31-2017]


537. Subsection 2 of Directive 4 applies to certain projects in which a person subject to Directive 4 owns a 33 percent or more interest.  Is OFAC changing its guidance on entities owned 50 percent or more by one or more entities subject to Directive 4? 

No.  The prohibition in subsection 2 of Directive 4 applies to any deepwater, Arctic offshore, or shale project: (1) that is initiated on or after January 29, 2018; (2) that has the potential to produce oil; and (3) in which a person subject to Directive 4 (including its property or interests in property) either (a) owns a 33 percent or more interest, or (b) owns a majority of the voting interests.  This prohibition applies to persons determined to be subject to Directive 4 as well as to entities owned 50 percent or more by one or more persons determined to be subject to Directive 4.  The following examples illustrate the relationship between amended Directive 4 and OFAC’s 50 percent rule.
 
Example 1:  An SSI entity listed under Directive 4 (“Entity A”) has a 33 percent ownership interest in a deepwater, Arctic offshore, or shale project initiated on or after January 29, 2018 that has the potential to produce oil (“Project X”).  The prohibition of subsection 2 of Directive 4 applies to Project X.  Consequently, U.S. persons are prohibited from providing goods, services (except for financial services), or technology in support of exploration or production for Project X. 
 
Example 2:  Instead of holding a direct interest in Project X, Entity A now owns 50 percent of Entity B, and Entity B holds a 33 percent interest in Project X.  As a result of OFAC’s 50 percent rule, Entity B is subject to Directive 4.  Because Entity B is subject to Directive 4 and owns a 33 percent or greater interest in Project X, the prohibition of subsection 2 of Directive 4 applies to Project X.  Consequently, U.S. persons are prohibited from providing goods, services (except for financial services), or technology in support of exploration or production for Project X.  
 
Example 3:  Entity A now owns only 33 percent of Entity B, and Entity A is the only SSI entity that owns any interest in Entity B.  Entity B holds a 100 percent ownership interest in Project X.  Entity A owns less than 50 percent of Entity B, and so, in accordance with the 50 percent rule, Entity B is not subject to Directive 4.  The prohibition of subsection 2 of Directive 4 would therefore not apply to Project X, even though Entity B owns an interest in the project that is 33 percent or greater. [10-31-2017] 

538. Does OFAC aggregate ownership stakes of all entities subject to Directive 4 when determining whether a project is 33 percent or more owned by a person subject to Directive 4, or whether a person subject to Directive 4 owns a majority of the voting interests in a project? 

Yes.  The prohibition of subsection 2 of Directive 4 applies to projects owned 33 percent or more in the aggregate by one or more Directive 4 SSI entities, their property, and their interests in property, including entities owned 50 percent or more by one or more persons determined to be subject to Directive 4.  The prohibition also applies to projects in which one or more Directive 4 SSI entities, their property, or their interests in property own an aggregated majority of the voting interests.  Accordingly, if two SSI entities listed under Directive 4 each hold a 20 percent ownership interest in Project X, or together own a majority of the voting interests in the project, then the prohibition of subsection 2 of Directive 4 applies to Project X. [10-31-2017]


 453. Pursuant to General License 6 under the Ukraine-Related Sanctions Program, are U.S. financial institutions authorized to process noncommercial, personal remittances to or from Crimea (or to or from individuals ordinarily resident in Crimea) when there is no individual who is a U.S. person as either the remitter or beneficiary in the transaction?

Yes. U.S. depository institutions, U.S.-registered brokers or dealers in securities, and U.S.-registered money transmitters are authorized to process noncommercial, personal remittances pursuant to General License 6 regardless of whether the originator or beneficiary is an individual who is a U.S. person. For example, General License 6 authorizes a U.S. depository institution to act as the intermediary financial institution and sole U.S. party in a payment representing a personal remittance originated by a non-U.S. person located outside of the United States for the benefit of an individual located in or ordinarily resident in Crimea. [5-7-2015]


454. Does General License No. 9 authorize U.S. persons to export or reexport services or software with knowledge or reason to know that such services or software are intended for an individual or entity identified on the Sectoral Sanctions Identification List (SSI List)?

General License No. 9 authorizes the exportation or reexportation, directly or indirectly, of certain services and software to persons in the Crimea region of Ukraine, including to individuals and entities identified on the SSI List or who are otherwise subject to directives under Executive Order 13662. However, General License No. 9 does not authorize the exportation or reexportation, directly or indirectly, of services or software with knowledge or reason to know that such services or software are intended for any person whose property and interests in property are blocked. Accordingly, U.S. persons engaging in transactions pursuant to General License No. 9 should conduct due diligence to ensure that such transactions do not involve individuals or entities identified on OFAC’s List of Specially Designated Nationals and Blocked Persons or whose property and interests in property are otherwise blocked. [5-21-2015]


539. Section 223(a) of CAATSA states that the “Secretary of the Treasury may determine that a person meets one or more of the criteria in section 1(a) of Executive Order No. 13662 if that person is a state-owned entity operating in the railway or metals and mining sector of the economy of the Russian Federation.” Is OFAC going to impose sanctions on persons operating in those sectors?

Section 223(a) of CAATSA does not require the imposition of sanctions. While sanctions may be imposed on potential targets in any sector of the economy of the Russian Federation in the future, maintaining unity with partners on sanctions implemented with respect to the Russian Federation is important to the U.S. government. The point of the sectoral sanctions is to impose costs on the Russian Federation for its aggression in Ukraine. The United States will continue to work closely with our allies to address unintended consequences arising as a result of such sanctions. [10-31-2017]


540. How will OFAC interpret the following terms as used in section 233 of CAATSA: “investment,” “facilitates,” “unjustly benefits,” and “close associates or family members?”

For purposes of implementing section 233 of CAATSA, OFAC anticipates interpreting these key terms as follows:

“investment” – For purposes of implementing section 233 of CAATSA, OFAC will interpret the term “investment” broadly as a transaction that constitutes a commitment or contribution of funds or other assets or a loan or other extension of credit to an enterprise. For purposes of this interpretation, a loan or extension of credit is any transfer or extension of funds or credit on the basis of an obligation to repay, or any assumption or guarantee of the obligation of another to repay an extension of funds or credit, including: overdrafts, currency swaps, purchases of debt securities issued by the Government of Russia, purchases of a loan made by another person, sales of financial assets subject to an agreement to repurchase, renewals or refinancings whereby funds or credits are transferred or extended to a borrower or recipient described in the provision, the issuance of standby letters of credit, and drawdowns on existing lines of credit.

“facilitates” – For purposes of implementing section 233 of CAATSA, OFAC will interpret “facilitates” to mean the provision of assistance for certain efforts, activities, or transactions, including the provision of currency, financial instruments, securities, or any other transmission of value; purchasing, selling, transporting, swapping, brokering, financing, approving, or guaranteeing; the provision of other services of any kind; the provision of personnel; or the provision of software, technology, or goods of any kind.

“unjustly benefits” – For purposes of implementing section 233 of CAATSA, OFAC will interpret the term “unjustly benefits” broadly to refer to activities such as public corruption that result in any direct or indirect advantage, value, or gain, whether the benefit is tangible or intangible, by officials of the Government of the Russian Federation, or their close associates or family members. Such public corruption could include, among other things, the misuse of Russian public assets or the misuse of public authority.

“close associates or family members” – For purposes of implementing section 233 of CAATSA, OFAC will interpret the term “close associate” of an official of the Government of the Russian Federation as a person who is widely or publicly known, or is actually known by the relevant person engaging in the conduct in question, to maintain a close relationship with that official. OFAC will interpret the term “family member” of an official of the Government of the Russian Federation to include parents, spouses (current and former), extramarital partners, children, siblings, uncles, aunts, grandparents, grandchildren, first cousins, stepchildren, stepsiblings, parents-in-law, and spouses of any of the foregoing. [10-31-2017]


Section 226 - Imposition of Sanctions with Respect to Foreign Financial Institutions (FFIs)


541. What activities can trigger sanctions on a foreign financial institution (FFI) under section 226 of CAATSA?

Section 226 of CAATSA amends section 5 of the Ukraine Freedom Support Act (UFSA) by making the sanctions in that section, which previously were discretionary, mandatory. Under the amended section, FFIs face sanctions if the Secretary of the Treasury determines that they knowingly engage in significant transactions involving certain defense- and energy-related activities or knowingly facilitate significant financial transactions on behalf of any Russian person added to OFAC’s SDN List pursuant to UFSA, Executive Order (E.O.) 13660, E.O. 13661, E.O. 13662, or E.O. 13685, or any other E.O. addressing the crisis in Ukraine. FFIs will not be subject to sanctions under this amended section solely on the basis of knowingly facilitating significant financial transactions on behalf of persons listed on OFAC’s Sectoral Sanctions Identification List pursuant to Directives 1-4 of E.O. 13662.

 

Unless the Secretary of State makes a determination that it is not in the national interest of the United States to do so, the Secretary of the Treasury shall prohibit the opening and prohibit or impose strict conditions on the maintaining in the United States of correspondent accounts or payable-through accounts for any FFI that the Secretary of the Treasury, in consultation with the Secretary of State, determines has engaged in sanctionable activity. [10-31-2017]

 


542. How does OFAC interpret the following terms as used in section 5 of UFSA, as amended by section 226 of CAATSA: “significant transaction,” “significant financial transaction,” and “facilitated?”

We anticipate that regulations to be promulgated will generally reflect the following:

significant transaction” and “significant financial transaction” – For purposes of implementing section 5 of UFSA, as amended by section 226 of CAATSA, OFAC will consider the totality of the facts and circumstances when determining whether transactions or financial transactions are “significant.” OFAC will consider the following list of seven broad factors that can assist in the determination of whether a transaction is “significant”: (1) the size, number, and frequency of the transaction(s); (2) the nature of the transaction(s); (3) the level of awareness of management and whether the transaction(s) are part of a pattern of conduct; (4) the nexus between the transaction(s) and a blocked person; (5) the impact of the transaction(s) on statutory objectives; (6) whether the transaction(s) involve deceptive practices; and (7) such other factors that the Secretary of the Treasury deems relevant on a case-by-case basis.

OFAC will generally interpret the term “financial transaction” broadly to encompass any transfer of value involving a financial institution. For example, the following is a non-exhaustive list of activities that OFAC would consider to be a “financial transaction”:
• The receipt or origination of wire transfers;
• The acceptance of commercial paper (both retail and wholesale), and the clearance of such paper (including checks and similar drafts);
• The receipt or origination of ACH or ATM transactions;
• The holding of nostro, vostro, or loro accounts;
• The provision of trade finance or letter of credit services;
• The provision of guarantees or similar instruments;
• The provision of investment products or instruments or participation in investments; and
• Any other transactions for or on behalf of, directly or indirectly, a person serving as a correspondent, respondent, or beneficiary.

facilitated” – For purposes of implementing section 5 of UFSA, OFAC will generally interpret the term “facilitated” broadly. “Facilitated” refers to the provision of assistance for certain efforts, activities, or transactions, including the provision of currency, financial instruments, securities, or any other transmission of value; purchasing; selling; transporting; swapping; brokering; financing; approving; guaranteeing; the provision of other services of any kind; the provision of personnel; or the provision of software, technology, or goods of any kind. [10-31-2017]


543. How will U.S. financial institutions and FFIs know that the Department of the Treasury has imposed prohibitions or strict conditions on FFIs’ correspondent accounts or payable-through accounts in the United States pursuant to section 5 of UFSA?

If, pursuant to Section 5 of UFSA, Treasury decides to impose strict condition(s) on maintaining U.S. correspondent accounts or U.S. payable-through accounts for an FFI, or decides to prohibit the opening or maintaining of U.S. correspondent accounts or U.S. payable-through accounts for an FFI, Treasury will add the name of the FFI to a list similar to the List of Foreign Financial Institutions Subject to Part 561 (the “Part 561 List”). Treasury will establish and publicize that list before adding any FFIs to it. The list will be included in the Consolidated Sanctions List Data Files, and will be available for download in all Consolidated Sanctions List data file formats. [10-31-2017]


Section 228 - Mandatory Imposition of Sanctions With Respect to Certain Transactions with Foreign Sanctions Evaders and Serious Human Rights Abusers in the Russian Federation


544. What is the relationship between CAATSA and the Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014 (SSIDES)?

Section 228 of CAATSA adds two sections to SSIDES that impose mandatory sanctions. [10-31-2017] 


545. What do the following key terms in Section 10 of SSIDES mean: “foreign person,” “knowingly,” “materially violate,” “facilitates . . . for or on behalf of,” “significant transaction,” “deceptive or structured transaction”?

We anticipate that regulations to be promulgated will generally reflect the following:

foreign person” – As indicated in section 10(f)(2) of SSIDES, which was added pursuant to CAATSA, the phrase “foreign person” is defined in 31 C.F.R. § 595.304 [link].

knowingly” – For purposes of section 10(a) of SSIDES, OFAC will interpret this term consistent with its usage in section 221 of CAATSA, which provides the following: “The term ‘knowingly’, with respect to conduct, a circumstance, or a result, means that a person has actual knowledge, or should have known, of the conduct, the circumstance, or the result.”

materially violate” – For purposes of section 10(a)(1) of SSIDES, OFAC will interpret the term “materially violate” to refer to an “egregious” violation. A determination about whether a violation is egregious will be based on an analysis of the applicable General Factors as described in OFAC’s Economic Sanctions Enforcement Guidelines, located in subsection (B)(1), section V of Appendix A to 31 C.F.R. part 501 [link to text].

facilitation . . . for or on behalf of” – For purposes of section 10(a)(2) of SSIDES, facilitating a significant transaction for or on behalf of a person will be interpreted to mean providing assistance for a transaction from which the person in question derives a particular benefit of any kind (as opposed to a generalized benefit conferred upon undifferentiated persons in aggregate). Assistance may include the provision or transmission of currency, financial instruments, securities, or any other value; purchasing, selling, transporting, swapping, brokering, financing, approving, or guaranteeing; the provision of other services of any kind; the provision of personnel; or the provision of software, technology, or goods of any kind.

significant transaction” – For purposes of section 10(a)(2) of SSIDES, OFAC will consider the totality of the facts and circumstances when determining whether transactions are “significant.” OFAC will consider the following list of seven broad factors that can assist in the determination of whether a transaction is “significant”: (1) the size, number, and frequency of the transaction(s); (2) the nature of the transaction(s); (3) the level of awareness of management and whether the transaction(s) are part of a pattern of conduct; (4) the nexus between the transaction(s) and a blocked person; (5) the impact of the transaction(s) on statutory objectives; (6) whether the transaction(s) involve deceptive practices; and (7) such other factors that the Secretary of the Treasury deems relevant on a case-by-case basis.

Furthermore, for purposes of section 10(a)(2) of SSIDES, a transaction is not significant if U.S. persons would not require specific licenses from OFAC to participate in it. A transaction in which the person(s) subject to sanctions is only identified on the Sectoral Sanctions Identifications (SSI) List must also involve deceptive practices (i.e., attempts to obscure or conceal the actual parties or true nature of the transaction(s), or to evade sanctions) to potentially be considered significant. A transaction involving an SSI entity is not, however, automatically significant simply because a U.S. person would require a specific license from OFAC to participate in it and it involves deceptive practices. In all cases, the totality of the circumstances, including the other factors listed above, will shape the final determination of significance.

deceptive or structured transaction” – As indicated in section 10(f)(3) of SSIDES as added by CAATSA, the term “structured” is defined in 31 C.F.R. § 1010.100(xx). Structured transactions are a type of deceptive transaction. A “deceptive transaction” is one that involves deceptive practices. As described in 31 C.F.R. § 561.404(f), “deceptive practices” are attempts to obscure or conceal the actual parties or true nature of a transaction, or to evade sanctions. [10-31-2017]


546. In section 10(a)(2)(A) of SSIDES, are persons “subject to sanctions imposed by the United States with respect to the Russian Federation” limited to persons listed on OFAC’s Specially Designated Nationals and Blocked Persons (SDN) List, or does it include persons identified on the Sectoral Sanctions Identifications (SSI) List as well?

For purposes of implementing section 10(a)(2)(A) of SSIDES, OFAC will interpret the phrase “subject to sanctions imposed by the United States with respect to the Russian Federation” to be persons subject to sanctions under SSIDES, UFSA, and any covered Executive order as defined in Section 10(f)(1) of SSIDES.  Persons “subject to sanctions imposed by the United States with respect to the Russian Federation” include persons listed on either the SDN or SSI List, as well as persons subject to sanctions pursuant to OFAC’s 50 percent rule.  [10-31-2017]

 

North Korea Sanctions

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456. What does Executive Order (E.O.) 13722 do?

E.O. 13722 blocks the Government of North Korea and the Workers’ Party of Korea; prohibits the exportation and reexportation of goods, services (including financial services), and technology to North Korea; and prohibits new investment in North Korea. E.O. 13722 also adds new designation criteria, some of which are mandatory criteria from the North Korea Sanctions and Policy Enhancement Act of 2016. [09-21-2017]


457. Does Executive Order (E.O.) 13722 take into account United Nations Security Council Resolution (UNSCR) 2270 and domestic legislation?

Yes. E.O. 13722 implements certain U.S. obligations under UNSCR 2270 and certain provisions of Public Law No. 114-122, The North Korea Sanctions and Policy Enhancement Act of 2016. U.S. sanctions against North Korea are generally broader than UN sanctions. [09-21-2017.]


458. Does the blocking of the Government of North Korea and the Workers’ Party of Korea impact the ability of U.S. persons to do business with or conduct transactions with entities in which either party has an interest?

Yes. All property and interests in property of the Government of North Korea and the Workers’ Party of Korea are blocked. U.S. persons are generally prohibited from engaging in transactions with them without authorization from OFAC and must block property or interests in property that are in, or come within, the United States or the possession of a U.S. person. [03-16-2016]


459. What impact does the prohibition on the exportation or reexportation of goods, services, or technology under Executive Order (E.O.) 13722 have on the regulations of the Department of Commerce’s Bureau of Industry and Security (BIS)?

None. E.O. 13722 prohibits the exportation or reexportation, from the United States, or by a United States person, of any goods, services, or technology to North Korea. BIS maintains authority to license exports and reexports of goods and technology subject to the Export Administration Regulations to persons who are not Specially Designated National (SDNs) and involving the Government of North Korea and the Workers’ Party of Korea. In most instances, to export to designated individuals and entities, U.S. persons must obtain a license from both OFAC and BIS. Regulated financial entities processing a transaction in accordance with a BIS license may want to request a copy of the license to ensure the transaction meets the terms, conditions, and criteria of the BIS license. [09-21-2017]


460. Can U.S. persons do business with entities in North Korea?

No. Unless authorized pursuant to a general or specific license from OFAC and/or BIS, Executive Order 13722 prohibits new investment in North Korea by a U.S. person and the exportation or reexportation, from the United States, or by a U.S. person, of any goods, services, or technology to North Korea. the new E.O. Imposing Additional Sanctions with Respect to North Korea does not modify any of those prohibitions. [09-21-2017]


461. Has OFAC issued general licenses for the North Korea program?

Yes. See the OFAC’s webpage on North Korea for the general licenses. [09-21-2017]


462. Can U.S. persons continue to send money to family or friends in North Korea?

Yes. OFAC General License No. 4 authorizes U.S. depository institutions, including banks, and U.S.-registered money transmitters, to process non-commercial, personal remittances to or from North Korea, or for or on behalf of an individual ordinarily resident in North Korea. Such transactions do not require further authorization from OFAC. [03-16-2016]


463. Can nongovernmental organizations (NGOs) provide assistance to North Korea?

Yes. Per General License No. 5, NGOs are authorized to export or reexport services to North Korea that would otherwise be prohibited by Executive Order 13722 in support of the following activities: (1) activities to support humanitarian projects to meet basic human needs in North Korea, including drought and flood relief, food, nutrition, and medicine distribution, the provision of health services, assistance for individuals with disabilities, and environmental programs; (2) activities to support democracy building in North Korea, including rule of law, citizen participation, government accountability, universal human rights and fundamental freedoms, access to information, and civil society development projects; (3) activities to support education in North Korea, including combating illiteracy, increasing access to education, international exchanges, and assisting education reform projects; (4) activities to support non-commercial development projects directly benefiting the North Korean people, including preventing infectious disease and promoting maternal/child health, sustainable agriculture, and clean water assistance; and (5) activities to support environmental protection, including the preservation and protection of threatened or endangered species and the remediation of pollution or other environmental damage. Additionally, U.S. depository institutions, U.S.-registered brokers or dealers in securities, and U.S.-registered money transmitters are authorized to process transfers of funds on behalf of U.S. or third-country NGOS to or from North Korea in support of the activities identified above. Executive Order 13810 does not modify any of those authorizations.

General License No. 5 does not authorize transactions with the Government of North Korea or other blocked persons, except for limited transactions with the Government of North Korea that are necessary for the above-described activities, such as payment of taxes and other fees. [09-21-2017]

*For guidance on specific questions with respect to charitable donations, NGOs, and the scope of General License No. 5, please reach out to OFAC. Contact information may be found here.


464. Can I travel to North Korea?

No. While OFAC sanctions do not prohibit U.S. persons from traveling to or from North Korea, the Department of State imposed a Geographical Travel Restriction for U.S. citizens’ travel to North Korea on September 1, 2017. We recommend consulting the State Department’s Travel Warning on North Korea for additional information. [09-21-2017]


465. What is an example of a person who forms part of the household of an employee of the official mission of the Government of North Korea or of an employee of the United Nations?

General License No. 1 authorizes the provision of goods or services in the United States to employees of the official mission of the Government of North Korea to the United Nations or employees of the United Nations, their families, or other persons forming part of their household. Persons forming part of their household could include spouses, domestic partners, and dependent children. [09-21-2017]


525. How does Executive Order (E.O.) 13810 change the current sanctions regime?

E.O. 13810 provides the Secretary of the Treasury, in consultation with the Secretary of State, additional tools to disrupt North Korea’s ability to fund its weapons of mass destruction (WMD) and ballistic missile programs.  Specifically, the Executive order:  (1) establishes several new designation criteria; (2) prohibits vessels and aircraft that have called or landed at a port or place in North Korea in the previous 180 days, and vessels that engaged in a ship-to-ship transfer with such a vessel in the previous 180 days, from entering the United States; (3) provides authority to block any funds transiting accounts linked to North Korea that come within the United States or possession of a United States person; and (4) provides authority to impose sanctions on a foreign financial institution that knowingly conducted or facilitated, on or after the date of the order (i) any significant transaction on behalf of certain blocked persons or (ii) any significant transaction in connection with trade with North Korea.  The sanctions applicable to foreign financial institutions can be restrictions on correspondent or payable-through accounts or full blocking sanctions.

OFAC is issuing new General License 10 to allow, among others things, vessels in distress to call at a port and aircraft to make emergency landings.  The general licenses previously issued with E.O. 13722 do not apply to transactions prohibited by E.O. 13810, except for General Licenses 2 and 9 with respect to legal services and emergency medical services, respectively.  OFAC is also updating General License 3  to account for E.O. 13810. [9-21-2017]


526. How does the Secretary of the Treasury make a determination about foreign bank accounts mentioned in Executive Order (E.O) 13810? How are U.S. persons expected to implement?

Section 3 of E.O. 13810 authorizes the Secretary of the Treasury to determine that a North Korean person owns, controls, or has used a foreign bank account, and to require the blocking of funds that originate from, are destined for, or pass through that account. OFAC will provide appropriate notice and additional guidance, as necessary, to clarify its expectations for implementation. Absent such a determination and notice from Treasury, this provision does not create any immediate compliance obligations on U.S. persons. [9-21-2017]


 

  

Venezuela Sanctions

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Dealings with the Government of Venezuela

505. If an official of the Government of Venezuela is designated as a Specially Designated National (SDN), does that mean that the Government of Venezuela is blocked? What are the prohibitions on U.S. persons dealing with a designated government official or the Government of Venezuela?

No. The designation of an official of the Government of Venezuela does not mean that the government itself is also blocked. The prohibitions apply to transactions or dealings only with the individuals and entities whose property and interests in property are blocked. However, U.S. persons should be cautious in dealings with the government to ensure that they are not engaged in transactions or dealings, directly or indirectly, with an SDN, for example by entering into contracts that are signed by an SDN, entering into negotiations with an SDN, or by processing transactions, directly or indirectly, on behalf of the SDN, absent authorization or an applicable exemption. [02-13-17]


Executive Order 13808 of August 24, 2017, "Imposing Additional Sanctions with Respect to the Situation in Venezuela"


507. For purposes of Executive Order (E.O) 13808 of August 24, 2017, “Imposing Additional Sanctions with Respect to the Situation in Venezuela,” is Petroleos de Venezuela, S.A. (PdVSA) considered part of the Government of Venezuela?

Yes. Prohibitions on dealing in new debt vary based on whether the entity involved is PdVSA or another part of the Government of Venezuela. Subsection 1 (a)(i) of E.O. 13808 prohibits engaging in transactions related to, providing financing for, or otherwise dealing in debt if (1) that debt is issued on or after the sanctions effective date ("new debt"); (2) has a maturity of longer than 90 days; and (3) is issued by, on behalf of, or for the benefit of PdVSA, its property, or its interests in property. Subsection 1 (a)(ii) of E.O. 13808 prohibits engaging in transactions related to, providing financing for, or otherwise dealing in new debt with a maturity of longer than 30 days issued by, on behalf of, or for the benefit of any other segment of the Government of Venezuela, its property, or its interests in property. Subsection 1(a)(ii) of E.O. 13808 further prohibits engaging in transactions related to, providing financing for, or otherwise dealing in equity issued on or after the sanctions effective date ("new equity") by, on behalf of, or for the benefit of the Government of Venezuela, its property, or its interests in property, which includes PdVSA.  [08-25-2017]


508. What do the prohibitions in E.O. 13808 mean? Are they blocking actions?

Subsection 1(a)(i) of  E.O. 13808 prohibits engaging in transactions related to, providing financing for, or otherwise dealing in new debt with a maturity of longer than 90 days by, on behalf of, or for the benefit of PdVSA, its property, or its interests in property.

Subsection 1(a)(ii) of E.O. 13808 prohibits engaging in transactions related to, providing financing for, or otherwise dealing in new debt with a maturity of longer than 30 days issued by, on behalf of, or for the benefit of any other segment of the Government of Venezuela, its property, or its interests in property. That subsection further prohibits engaging in transactions related to, providing financing for, or otherwise dealing in new equity issued by, on behalf of, or for the benefit of the Government of Venezuela, its property, or its interests in property, which includes PdVSA.

Subsection 1(a)(iii) of E.O. 13808 prohibits engaging in transactions involving bonds issued by the Government of Venezuela prior to the order's effective date.

Subsection 1(a)(iv) of E.O. 13808 prohibits engaging in transactions involving dividend payments or other distributions of profits to the Government of Venezuela by any entity owned or controlled, directly or indirectly, by the Government of Venezuela.

Section 1(b) of E.O. 13808 prohibits purchasing any securities from the Government of Venezuela other than securities qualifying as new debt with a maturity of less than or equal to 90 days (for PdVSA) or 30 days (for the rest of the Government of Venezuela).

These actions prohibit transactions by U.S. persons as defined in E.O. 13808, wherever they are located, and transactions within the United States. This action does not require U.S. persons to block the property or interests in property of the Government of Venezuela, and the Government of Venezuela will not be added to the List of Specially Designated Nationals and Blocked Persons (SDN List). U.S. persons should reject transactions or dealings that are prohibited by E.O. 13808, and to the extent required by Section 501.604 of the Reporting, Procedures and Penalties Regulations (31 C.F.R. part 501), U.S. persons must report to OFAC any rejected transactions within 10 business days. [08-25-2017]


509. Is there a wind-down or safe harbor provision in E.O. 13808?

General License 1 provides a wind-down period with respect to contracts and other agreements that were in effect prior to E.O. of August 24, 2017 taking effect. That general license provides 30 days from the order's effective date in which to conduct all transactions and activities otherwise prohibited by Subsections 1(a)(i)-(iii) and (b) of the E.O. that are ordinarily incident and necessary to winding down such agreements.  [08-25-2017]


510. Has OFAC issued general licenses related to E.O. 13808?

OFAC has issued four general licenses related to E.O. 13808. General License 1 applies to contracts and other agreements that were in effect prior to the order's effective date. It provides 30 days as of the order's effective date in which to conduct all transactions and activities otherwise prohibited by Subsections 1 (a)(i)-(iii) and (b) of the E.O. that are ordinarily incident and necessary to winding down such agreements.

General License 2 authorizes all transactions otherwise prohibited by Subsections 1(a)(i), (a)(ii), and (b) of E.O. 13808 provided that the only Government of Venezuela entities involved in the transactions are CITGO Holding, Inc. and any of its subsidiaries.

General License 3 authorizes all transactions related to, the provision of financing for, and other dealings in bonds contained on the List of Authorized Venezuela-Related Bonds that would otherwise be prohibited by Section 1(a)(iii) of E.O. of August 24, 2017. That list is appended to General License 3 and also available as a stand-alone document on the Venezuela-related Sanctions page of OFAC’s website. General License 3 further authorizes all transactions related to, the provision of financing for, and other dealings in bonds issued prior to the effective date of E.O. of August 24, 2017, if such bonds were issued by U.S. person entities owned or controlled, directly or indirectly, by the Government of Venezuela, such as CITGO Holding, Inc.

General License 4 authorizes all transactions related to the provision of financing for, and other dealings in new debt related to the exportation or reexportation of agricultural commodities, medicine, medical devices, or replacement parts and components for medical devices, to Venezuela, or to persons in third countries purchasing specifically for resale to Venezuela, provided that the exportation or reexportation is licensed or otherwise authorized by the
Department of Commerce.

All of the general licenses are available on OFAC's website (www.treasury.gov/ofac) on the Venezuela-related Sanctions page. Review them for details. [08-25-2017]


511. What does OFAC interpret to be debt and equity? Can U.S. financial institutions continue to maintain correspondent accounts and process U.S. dollar-clearing transactions for the entities subject to these sanctions?

The term debt includes bonds, loans, extensions of credit, loan guarantees, letters of credit, drafts, bankers acceptances, discount notes or bills, or commercial paper. The term equity includes stocks, share issuances, depositary receipts, or any other evidence of title or ownership.

The prohibitions in Subsections 1(a)(i) of E.O. 13808  apply to all transactions involving new debt with a maturity of longer than 90 days; all financing in support of such new debt; and any dealing in, including provision of services in support of, such new debt.

The prohibitions in Subsections 1(a)(ii) of E.O. 13808 apply to all transactions involving new debt with a maturity of longer than 30 days or new equity; all financing in support of such new debt or new equity; and any dealing in, including provision of services in support of, such new debt or new equity.

These prohibitions extend to rollover of existing debt, if such rollover results in the creation of new debt with a maturity of longer than 90 days (with respect to PdVSA) or longer than 30 days (with respect to the rest of the Government of Venezuela).

Engaging in transactions related to, providing financing for, or otherwise dealing in any equity issued by, on behalf of, or for the Government of Venezuela is permissible, if the equity was issued prior to the effective date of E.O. 13808.

Engaging in transactions related to, providing financing for, or otherwise dealing in any debt issued by, on behalf of, or for the Government of Venezuela is permissible, if the debt was issued prior to the effective date of E.O. 13808, and, in the case of bonds, either (1) the bonds are included on the List of Authorized Venezuela-Related Bonds referenced in General License 3, or (2) the bonds were issued by U.S. person entities owned or controlled, directly or indirectly, by the Government of Venezuela (such as CITGO Holding, Inc.). The List of Authorized Venezuela-Related Bonds is available as an appendix to General License 3, and is also available as a stand-alone document on the Venezuela-related Sanctions page of OFAC's website. The list will also be published in the Federal Register, as will any changes to the list.

Despite the above allowances, E.O. 13808 prohibits U.S. persons from purchasing securities of any kind - including debt and equity securities - from the Government of Venezuela. The exception to this prohibition is purchasing securities that qualify as (a) new debt of PdVSA with a maturity of less than or equal to 90 days, or (b) new debt of any other part of the Government of Venezuela with a maturity of less than or equal to 30 days. U.S. persons are authorized to deal with the Government of Venezuela as counterparty to transactions involving securities that fall into either of these two categories. U.S. persons are not authorized to purchase, directly or indirectly, bonds on the List of Authorized Venezuela-Related Bonds from the Government of Venezuela.

U.S. financial institutions may continue to maintain correspondent accounts and process U.S. dollar-clearing transactions for the Government of Venezuela, so long as those activities do not involve engaging in transactions related to, providing financing for, or otherwise dealing in transaction types prohibited by E.O. of August 24, 2017.  [08-25-2017]


512. Why is OFAC imposing sanctions and issuing general licenses specific to bonds and other securities?

The Government of Venezuela is selling assets for much less than they are worth at the expense of the Venezuelan people and using proceeds from these sales to enrich supporters of the regime. Bonds and other securities are among the assets being sold. The prohibitions and related general licenses are meant to prevent U.S. persons from contributing to the Government of Venezuela's corrupt and shortsighted financing schemes while mitigating market disruptions and harm to investors. [08-25-2017]


513. Do the prohibitions imposed pursuant to E.O. of August 24, 2017 also extend to entities owned 50 percent or more by the Government of Venezuela?

Yes. These prohibitions apply to the Government of Venezuela, its property, and its interests in property, which includes entities owned 50 percent or more, individually or in the aggregate, by the Government of Venezuela. Note, however, that General License 2 authorizes all transactions otherwise prohibited by Subsections 1(a)(i), (a)(ii), and (b) of E.O. 13808provided that the only Government of Venezuela entities involved in the transactions are CITGO Holding, Inc. or its subsidiaries. General License 3 also authorizes all transactions related to, provision of financing for, and other dealings in bonds that U.S. person entities owned or controlled, directly or indirectly, by the Government of Venezuela issued prior to the effective date of E.O. 13808. Additional information on OFAC's 50 Percent Rule is available here. [08-25-2017]


514. If a U.S. person entered into a revolving credit facility or long-term loan arrangement for the Government of Venezuela prior to the sanctions effective date, what are the restrictions on drawdowns from that facility? Do all drawdowns and disbursements pursuant to the parent agreement need to carry repayment terms of 90 days or less (for PdVSA) or 30 days or less (for the rest of the Government of Venezuela)?

If a U.S. person entered into a long-term credit facility or loan agreement prior to the sanctions effective date, drawdowns and disbursements with repayment terms of 90 days or less (for PdVSA) or 30 days or less (for the rest of the Government of Venezuela) are permitted. Drawdowns and disbursements whose repayment terms exceed the applicable authorized tenor are not prohibited if the terms of such drawdowns and disbursements (including the length of the repayment period, the interest rate applied to the drawdown, and the maximum drawdown amount) were contractually agreed to prior to the sanctions effective date and are not modified on or after the sanctions effective date. U.S. persons may not deal in a drawdown or disbursement initiated after the sanctions effective date with a repayment term of longer than 90 days (for PdVSA) or 30 days (for the rest of the Government of Venezuela), if the terms of the drawdown or disbursement were negotiated on or after the sanctions effective date. Such a newly negotiated drawdown or disbursement would constitute a prohibited extension of credit.

Note that General License 2 authorizes all transactions in new debt of any tenor with CITGO Holding, Inc. and its subsidiaries. [08-25-2017]


515. Is the term "new equity" limited to equity that is issued by an entity owned or controlled by the Government of Venezuela after the sanctions effective date, or would equity purchased or acquired by an entity owned or controlled by the Government of Venezuela from a third party after the sanctions effective date be considered new equity?

Under E.O. 13808, the term "new equity" pertains to equity issued, directly or indirectly, by the Government of Venezuela on or after the sanctions effective date. That said, E.O. of August 24, 2017 prohibits U.S. persons from purchasing any securities - including equity securities issued by a non-sanctioned party - from the Government of Venezuela. The exception to this prohibition is purchasing securities that qualify as (1) new debt of PdVSA with a maturity of less than or equal to 90 days, or (2) new debt of any other part of the Government of Venezuela with a maturity of less than or equal to 30 days. U.S. persons are authorized to deal with the Government of Venezuela as counterparty to transactions involving securities that fall into either of these two categories. General License 2 further authorizes U.S. persons to deal in new equity issued by CITGO Holding, Inc. or any of its subsidiaries, or purchase securities from CITGO Holding, Inc. or any of its subsidiaries, provided that no other entities owned or controlled by the Government of Venezuela are involved. [08-25-2017]


516. Does the prohibition on "otherwise dealing in new debt" of longer than 90 days maturity (for PdVSA) or 30 days (for the rest of the Government of Venezuela) prohibit dealing in debt with maturity that exceeds the applicable authorized tenor in which the Government of Venezuela is not directly or indirectly the borrower?

E.O. 13808 prohibits U.S. persons from dealing in debt of longer than 90 days maturity (for PdVSA) and longer than 30 days maturity (for the rest of the Government of Venezuela) issued on or after the order's effective date. E.O. of August 24, 2017 does not prohibit U.S. persons from dealing with the Government of Venezuela as counterparty to all transactions involving debt issued on or after the sanctions effective date by a non-sanctioned party. For example, U.S. persons are not prohibited from dealing in a loan exceeding the applicable authorized tenor that is issued after the sanctions effective date if such loan is provided by the Government of Venezuela to a non-sanctioned third-party, dealing with the Government of Venezuela when it plays the role of underwriter on new debt of a non-sanctioned third party exceeding the applicable authorized tenor, or accepting payment under a letter of credit with terms exceeding the applicable authorized tenor that is issued, advised, or confirmed by the Government of Venezuela, so long as the Government of Venezuela is not the borrower. [08-25-2017]


517. May a U.S. person consent to a replacement of its participation by a non-U.S. person in a long-term loan facility that was extended to the Government of Venezuela prior to the sanctions effective date?

E.O. 13808 does not prohibit a U.S. person from engaging in transactions necessary to exit or replace its participation in a long-term loan facility that was extended to the Government of Venezuela prior to the sanctions effective date, provided that such transactions do not otherwise run afoul of the order's prohibitions. This would not constitute dealing in new debt. U.S. persons involved in such facilities should ensure that all newly negotiated drawdowns or disbursements from the facility utilize repayment terms that are not prohibited by the sanctions effective date. See FAQ 394 for additional information on what constitutes a permitted drawdown or disbursement from an existing long-term loan obligation. [08-25-2017]


518. Is a U.S. person permitted under E.O. of August 24, 2017 to extend credit for greater than 90 days (for PdVSA) or 30 days (for the rest of the Government of Venezuela) to a non-sanctioned party for the purpose of purchasing goods or services from the Government of Venezuela?
 

E.O. 13808 does not prohibit U.S. persons from extending credit for longer than 90 days (for PdVSA) or 30 days (for the rest of the Government of Venezuela) to non-sanctioned parties for the purpose of purchasing goods or services from the Government of Venezuela, so long as the Government of Venezuela is not the indirect borrower. [08-25-2017]


519. How can I help the Venezuelan people while making sure to abide by the U.S. sanctions?

With the exception of Specially Designated Nationals, the Venezuelan people are not subject to U.S. sanctions. Furthermore, E.O. 13808 does not impose a complete blocking sanction on the Government of Venezuela. Sanctions do not preclude U.S. persons from exporting or re-exporting items to Venezuela if doing so is authorized under other applicable U.S. laws and regulations. OFAC has also issued General License 4 to authorize all financing and other dealings in new debt related to the exportation or reexportation of agricultural commodities, medicine, medical devices, components, or replacement parts for medical devices, to Venezuela, or to persons in third countries purchasing specifically for resale to Venezuela, provided that the exportation or reexportation is licensed or otherwise authorized by the Department of Commerce. See General License 4 for details and relevant definitions.

In addition to this general license, OFAC can also issue a specific license to authorize particular transactions that may otherwise be prohibited by the sanctions, as long as those transactions are in the foreign policy interests of the United States. [08-25-2017]


520. Do I need a specific license from OFAC to send U.S.-origin food or medicine to Venezuela?

No, as long as your transaction or other dealing does not involve property or interests in property of a Specially Designated National. That said, you should make sure that your proposed export is authorized by the U.S. Department of Commerce, Bureau of Industry and Security ("BIS"), which maintains jurisdiction over the export of items to Venezuela. For further guidance regarding the exportation of items to Venezuela, contact BIS by phone at (202) 482-4252. [08-25-2017]


521. I want to provide long-term financing to the Government of Venezuela to help with the exportation or reexportation of agricultural commodities, medicine, medical devices, components, or replacement parts and components for medical devices to Venezuela. Is that allowed?

Yes. General License 4 authorizes all financing and other dealings in new debt related to the exportation or reexportation of agricultural commodities, medicine, medical devices, components, or replacement parts for medical devices, to Venezuela, or to persons in third countries purchasing specifically for resale to Venezuela, provided that the exportation or reexportation is licensed or otherwise authorized by the Department of Commerce. Note, however, that General License 4 does not otherwise authorize any transaction that is prohibited by E.O. 13808, E.O. 13692, or any part of 31 C.F.R. Chapter V. [08-25-2017]


522. Other than through the existing general licenses, under what circumstances might U.S. persons be authorized to deal in new debt of greater than 30 or 90 days issued by the Government of Venezuela?

In the Lima Declaration of August 8, 2017, twelve countries across the Americas refused to recognize the Constituent Assembly or the laws it adopts because of its illegitimate nature, while at the same time fully backing the democratically elected National Assembly. We stand in solidarity with our friends and allies in the region. If the democratically elected Venezuelan National Assembly approved a new debt issuance by the Government of Venezuela that E.O. 13808  would prohibit U.S. persons from dealing in, the United States would consider using licensing authority to allow U.S. persons to deal in the issuance. [08-25-2017]


523. The Venezuela Government International Bond issued on December 29, 2016 (ISIN USP97475AQ39, CUSIP AM1108092) is not included on the Annex to General License 3.  Is that intentional?  Did OFAC intentionally exclude any other bonds from the Annex?

OFAC intentionally excluded the Venezuela Government International Bond issued on December 29, 2016 (ISIN USP97475AQ39, CUSIP AM1108092) (“the 2036 bond”) from the Annex to General License 3 because available information indicates that the Government of Venezuela is both the bond’s issuer and sole holder.  At this time, the 2036 bond is the only bond we have identified and purposely omitted from the Annex to General License 3.
 
Parties who identify additional bonds that they believe should be added to the Annex to General License 3 should email OFAC at OFAC_Feedback@treasury.gov with information about the bond (including its ISIN, CUSIP, description, issuance date, maturity date, and prospectus/terms and conditions) and provide their rationale for adding it to the Annex (e.g., a party other than the Government of Venezuela holds the bond).  No particular characteristics or circumstances will guarantee a bond’s addition to the Annex to General License 3; OFAC will evaluate each request on a case-by-case basis.
Paragraph (b) of General License 3 authorizes all transactions related to, the provision of financing for, and other dealings in bonds that were issued both (i) prior to the effective date of E.O. 13808 of August 24, 2017, and (ii) by U.S. person entities owned or controlled, directly or indirectly, by the Government of Venezuela.  Consequently, while bonds that meet both of these criteria may not be included on the Annex to General License 3, U.S. persons are nevertheless authorized to deal in these bonds. [09-01-2017]

524.  I would like to engage in derivatives transactions, including credit default swaps, related to a reference bond that is on the Annex to General License 3.  Is that permitted?

Paragraphs (a) and (b) of General License 3 authorize all transactions related to, the provision of financing for, and other dealings in bonds that are either listed in the Annex to General License 3 or that were issued both (i) prior to the effective date of E.O. 13808 of August 24, 2017, and (ii) by U.S. person entities owned or controlled, directly or indirectly, by the Government of Venezuela (“General License 3 bonds”).  Buying, selling, or otherwise dealing in a derivative that references a General License 3 bond is a transaction related to the bond itself.  General License 3 therefore authorizes such purchases and sales, as well as related transactions.  One corollary to this authorization is that U.S. persons are not authorized to buy, sell, or otherwise deal in derivatives that reference bonds that (i) were issued by the Government of Venezuela prior to the effective date of Executive Order 13808, but (ii) are not General License 3 bonds. [09-01-2017]


527. What does OFAC consider to be “profit” under Subsection 1(a)(iv) of E.O. 13808?

For purposes of Subsection 1(a)(iv) of E.O. 13808, “profit” is net income after taxes. For a business, this is generally total sales minus total costs and expenses. For example, transactions involving the Government of Venezuela, including PDVSA, related to payments for goods and services, taxes, or royalties are not considered “profit.” Similarly, principal and interest payments related to bonds and promissory notes are not considered “distributions of profit” for purposes of Subsection 1(a)(iv) of E.O. 13808, and so that subsection does not prohibit U.S. persons from making such payments. Restrictions imposed under other subsections of E.O. 13808, however, may still apply. For example, pursuant to Subsection 1(a)(iii), U.S. persons are prohibited from dealing in principal and interest payments related to bonds that were issued by the Government of Venezuela before August 25, 2017 unless U.S. persons are authorized to deal in the relevant bonds under General License 3. [10/03/2017]


547. Can U.S. Persons participate in meetings about restructuring outstanding Venezuelan and PDVSA debt?

U.S. persons are generally prohibited from engaging in transactions or dealings with persons named on OFAC’s SDN List, including dealing with an SDN in the context of efforts to restructure Venezuelan and Petroleos de Venezuela, S.A. (PdVSA) debt. (See FAQ 505 for additional information). Provided there is no SDN involvement, General License 3 authorizes U.S. persons to engage in all transactions related to bonds specified in the Annex to General License 3, including participating in negotiations regarding such bonds. General License 3 does not authorize any transaction by a U.S. person or within the United States that involves the creation or subsequent dealing in new debt of PdVSA or the Government of Venezuela with a maturity of greater than 90 days or 30 days, respectively, absent a license from OFAC. OFAC would consider license applications involving any such new debt or equity on a case-by-case basis, and base licensing determinations on the facts and circumstances of the particular application. As stated in FAQ 522, the United States government would consider using licensing authority to allow U.S. persons to deal in new debt of the Government of Venezuela approved by the democratically elected Venezuelan National Assembly. [11/09/2017]


548. Subsection 1(a)(i) of E.O. 13808 prohibits U.S. persons from dealing in new debt with a maturity of greater than 90 days of PdVSA. For purposes of E.O. 13808, does the term “PdVSA” include all PdVSA subsidiaries?

Yes. For purposes of E.O. 13808, the prohibition in Subsection 1(a)(i) would apply to PdVSA and extend to all PdVSA subsidiaries, unless authorized by OFAC. Note that General License 2 authorizes certain activities involving specified PdVSA subsidiaries. [11/09/2017]


 

Last Updated: 11/9/2017 5:41 PM