Posts Tagged OFAC Lawyer
Guess Who’s Back? The South Sudan Sanctions Regulations
Posted by Ferrari Legal, P.C. in Uncategorized on July 4, 2014
A few years ago when Sudan and South Sudan separated, and the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) noted that the Sudanese Sanctions Regulations (“SSR”) would not apply to South Sudan, I opined on how this would actually work in practice since there was still a substantial amount of economic activity between the two countries. Well, so the story goes, the situation deteriorated in South Sudan causing President Obama to issue Executive Order 13664 on April 3, 2014. E.O. 13663 reimposed sanctions on South Sudan. Although E.O. 13664 was issued over three (3) months ago, the new South Sudan Sanctions Regulations (“SSSR”) were only published earlier this week.
In short, the prohibitions imposed by E.O. 13664 are unchanged in the SSSR. As such, the SSSR, unlike the SSR, is a targeted sanctions program. This means that it does not impact the entire region of South Sudan, but only those parties engaged in particular activities which threaten the peace and stability of South Sudan and/or constitute human rights abuses. There is nothing too exciting about the SSSR as they appear to be the standard set of regulations we see when dealing with new targeted sanctions programs. In sum, dealings with parties on the OFAC Specially Designated Nationals and Blocked Persons List (“SDN List”) identified with a [SOUTH SUDAN] identifier are prohibited. Such prohibited dealings include all transactions for all goods, services, and technology, with limited exceptions.
What is interesting in this new set of regulations is 31 C.F.R. 558.507 which allows U.S. lawyers and law firms to receive payment from parties designated under E.O. 13664 and the SSSR from unblocked sources for payment of legal services authorized pursuant to 31 C.F.R. 558.506 so long as they file a copy of the engagement letter or legal services contract with OFAC before receiving payment. This obviates the need to obtain a specific license to receive payment as called for in 31 CFR 558.506. Furthermore, a note to that section clarifies that U.S. lawyers and law firms can hire private investigators and consultants to assist them in the representation of such parties, so long as the underlying legal services being provided are authorized pursuant to 31 C.F.R. 558.506.
This isn’t the first time we’ve see such language issued by OFAC. The Iranian Transactions and Sanctions Regulations (“ITSR”) also contains a similar authorization. Since this seems to be a common policy of OFAC’s, it would make sense for them to just extend this provision to all sanctions programs. I can tell you that one of the most frustrating things about representing parties designated under OFAC sanctions programs is having to wait around for the OFAC license authorizing payment to be returned before receiving payment. Authorizations such as those found in 31 C.F.R. 558.506 and 560.553 make sense and go a long way in assisting those parties who have been designated to get adequate legal representation in the U.S. quickly. Hopefully, we’ll see this sort of thing more often in the future.
The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrariassociatespc.com.
OFAC Provides More Insight Into New Sanctions Effective July 1, 2013
Posted by Ferrari Legal, P.C. in Uncategorized on July 1, 2013
The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued additional guidance concerning sanctions targeting Iran that went into effect today. That guidance is as follows:
1. To the extent that a shipping company transacts with port operators in Iran that have been identified as such under the Iran Freedom and Counter Proliferation Act (IFCA) and payments are limited strictly to routine fees including port dues, docking fees, or cargo handling fees, paid for the loading and unloading of non-sanctioned goods at Iranian ports, such transactions would not be considered significant transactions for the purposes of the IFCA. However, non-routine and/or large payments or fees that materially exceed standard industry rates could expose a person to sanctions under that authority, as could providing any port operator in Iran with any significant financial, material, technological, or other support.
2. The sanctions that went into effect today targeting Iran’s auto sector do not make sanctionable the export of finished vehicles to Iran if no further assembly or manufacturing is required. Therefore, parties can export fully assembled and finished vehicles to Iran for sale by a non-sanctioned Iranian dealer or distribution network and not face sanctions under the new authority. This, of course, does not include U.S. origin vehicles. On the other hand, “auto kits” exported to Iran for assembly in Iran would be considered goods or services used in connection with the automotive sector of Iran and the export of such kits to Iran would be sanctionable if the transaction is significant.
3. While, goods or services for the maintenance of finished vehicles exported to Iran would generally not be considered significant goods or services used in connection with the automotive sector of Iran, the export, sale, or distribution of goods (e.g., auto parts and accessories) or services that would contribute to Iran’s ability to manufacture or assemble vehicles, or manufacture original equipment and after-market parts in Iran could create exposure to sanctions. Persons exporting parts and services to Iran for the maintenance or upkeep of finished automobiles, and foreign financial institutions facilitating such exports, should exercise caution to ensure that the parts or services are not diverted for the manufacturing or assembly of vehicles in Iran or the manufacturing of original equipment or after-market parts in Iran, and are used only for maintenance and upkeep.
Anyone having further questions regarding this guidance would be wise to contact a qualified OFAC attorney for further guidance.
The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrariassociatespc.com.
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