OFAC Consolidated Frequently Asked Questions


 

Basic Information on OFAC and Sanctions

1. What is OFAC and what does it do?

The Office of Foreign Assets Control administers and enforces economic sanctions programs primarily against countries and groups of individuals, such as terrorists and narcotics traffickers. The sanctions can be either comprehensive or selective, using the blocking of assets and trade restrictions to accomplish foreign policy and national security goals. [09-10-02]


2. How long has OFAC been around?

The Treasury Department has a long history of dealing with sanctions. Dating back prior to the War of 1812, Secretary of the Treasury Gallatin administered sanctions imposed against Great Britain for the harassment of American sailors. During the Civil War, Congress approved a law which prohibited transactions with the Confederacy, called for the forfeiture of goods involved in such transactions, and provided a licensing regime under rules and regulations administered by Treasury.

OFAC is the successor to the Office of Foreign Funds Control (the "FFC''), which was established at the advent of World War II following the German invasion of Norway in 1940. The FFC program was administered by the Secretary of the Treasury throughout the war. The FFC's initial purpose was to prevent Nazi use of the occupied countries' holdings of foreign exchange and securities and to prevent forced repatriation of funds belonging to nationals of those countries. These controls were later extended to protect assets of other invaded countries. After the United States formally entered World War II, the FFC played a leading role in economic warfare against the Axis powers by blocking enemy assets and prohibiting foreign trade and financial transactions.

OFAC itself was formally created in December 1950, following the entry of China into the Korean War, when President Truman declared a national emergency and blocked all Chinese and North Korean assets subject to U.S. jurisdiction. [05-02-06]


3. What does one mean by the term "prohibited transactions"?

Prohibited transactions are trade or financial transactions and other dealings in which U.S. persons may not engage unless authorized by OFAC or expressly exempted by statute. Because each program is based on different foreign policy and national security goals, prohibitions may vary between programs. [06-16-06]


4. Are there exceptions to the prohibitions?

Yes. OFAC regulations often provide general licenses authorizing the performance of certain categories of transactions. OFAC also issues specific licenses on a case-by-case basis under certain limited situations and conditions. Guidance on how to request a specific license is found below and at 31 C.F.R. 501.801.

To apply for a specific license, please go to our License Application Page. [06-16-06]


6. Where can I find the specific details about the embargoes?

A summary description of each particular embargo or sanctions program may be found in the Sanctions Programs and Country Information area and in the Guidance and Information for Industry Groups area on OFAC's website. The text of Legal documents may be found in the Legal Documents area of OFAC's website which contains the text of 31 C.F.R. Chapter V and appropriate amendments to that Chapter which have appeared in the Federal Register. [05-21-18]


7. Can I get permission from OFAC to transact or trade with an embargoed country?

OFAC usually has the authority by means of a specific license to permit a person or entity to engage in a transaction which otherwise would be prohibited. In some cases, however, legislation may restrict that authority.

To apply for a specific license, please go to our License Application Page. [09-10-02]


8. What must I do to get permission to trade with an embargoed country?

In some situations, authority to engage in certain transactions is provided by means of a general license. In instances where a general license does not exist, a written request for a specific license must be filed with OFAC. The request must conform to the procedures set out in the regulations pertaining to the particular sanctions program. Generally, application guidelines and requirements must be strictly followed, and all necessary information must be included in the application in order for OFAC to consider an application. For an explanation about the difference between a general and a specific license as well as answers to other licensing questions, see the licensing questions section.

To apply for a specific license, please go to our License Application Page. [09-10-02]


9. What do you mean by "blocking?"

Another word for it is "freezing." It is simply a way of controlling targeted property. Title to the blocked property remains with the target, but the exercise of powers and privileges normally associated with ownership is prohibited without authorization from OFAC. Blocking immediately imposes an across-the-board prohibition against transfers or dealings of any kind with regard to the property. [09-10-02]


10. What countries do I need to worry about in terms of U.S. sanctions?

OFAC administers a number of U.S. economic sanctions and embargoes that target geographic regions and governments. Some programs are comprehensive in nature and block the government and include broad-based trade restrictions, while others target specific individuals and entities. (Please see the Sanctions Programs and Country Information page for information on specific programs.) It is important to note that in non-comprehensive programs, there may be broad prohibitions on dealings with countries, and also against specific named individuals and entities. The names are incorporated into OFAC s list of Specially Designated Nationals and Blocked Persons ("SDN list") which includes approximately 6,400 names of companies and individuals who are connected with the sanctions targets. In addition, OFAC maintains other sanctions lists that may have different prohibitions associated with them. A number of the named individuals and entities are known to move from country to country and may end up in locations where they would be least expected. U.S. persons are prohibited from dealing with SDNs wherever they are located and all SDN assets are blocked. Entities that a person on the SDN List owns (defined as a direct or indirect ownership interest of 50% or more) are also blocked, regardless of whether that entity is separately named on the SDN List. Because OFAC's programs are dynamic, it is very important to check OFAC's website on a regular basis to ensure that your sanctions lists are current and you have complete information regarding the latest restrictions affecting countries and parties with which you plan to do business. [05-21-18]


11. Who must comply with OFAC regulations?

U.S. persons must comply with OFAC regulations, including all U.S. citizens and permanent resident aliens regardless of where they are located, all persons and entities within the United States, all U.S. incorporated entities and their foreign branches. In the cases of certain programs, foreign subsidiaries owned or controlled by U.S. companies also must comply. Certain programs also require foreign persons in possession of U.S.-origin goods to comply. [01-15-15]


12. How much are the fines for violating these regulations?

The fines for violations can be substantial. In many cases, civil and criminal penalties can exceed several million dollars.  Civil penalties vary by sanctions program, and the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalty Inflation Adjustment Act Improvements Act of 2015, requires OFAC to adjust civil monetary penalty amounts annually.  For current penalty amounts, see section V.B.2.a of Appendix A to OFAC s Economic Sanctions Enforcement Guidelines at 31 C.F.R Part 501.  [03-08-17]


13. Is there a mechanism for a company to report its past undetected violations of OFAC regulations for completed transactions? Is any type of "amnesty" available for inadvertent failure to comply prior to the company becoming aware of the OFAC regulations?

Yes, a company can and is encouraged to voluntarily disclose a past violation. Self-disclosure is considered a mitigating factor by OFAC in Civil Penalty proceedings. A self-disclosure should be in the form of a detailed letter, with any supporting documentation, to Compliance and Enforcement Division, Director, Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 Pennsylvania Ave., N.W., Washington, DC 20220. OFAC does not have an "amnesty" program. The ramifications of non-compliance, inadvertent or otherwise, can jeopardize critical foreign policy and national security goals. OFAC does, however, review the totality of the circumstances surrounding any violation, including the quality of a company's OFAC compliance program. [11-16-07]


14. Can I regard previously issued and published opinion letters, regulatory interpretations, or other statements as guidance for my transactions?

Great care should be taken when placing reliance on such materials to ensure that the transactions in question fully conform to the letter and spirit of the published materials and that the materials have not been superseded. [09-10-02]


15. Can OFAC change its previously stated, non-published interpretation or opinion without first giving public notice?

Yes. OFAC, therefore, strongly encourages parties to exercise due diligence when their business activities may touch on an OFAC-administered program and to contact OFAC if they have any questions about their transactions. [09-10-02]


468. How do I verify an OFAC document? For example, how do I know that an OFAC license or a Specially Designated Nationals (SDN) List removal letter is authentic?

If you have questions about the authenticity of an OFAC document that is not publically posted on the OFAC website, you can contact OFAC and reference the specific case ID or FAC number that is included on the document.

  • To verify a specific license, please contact the OFAC Licensing Division at 1-202-622-2480.
  • To verify an SDN removal letter, please email ofac.reconsideration@treasury.gov.
  • To verify another OFAC document, please contact the OFAC Compliance Division at 1-202-622-2490.
[04-21-2016]

469. Does OFAC issue certificates of non-inclusion to help prove that a name is not on one of OFAC s sanctions lists?

No, OFAC does not issue non-inclusion certificates. [04-21-2016]


91. I am looking for the terrorist list on your web site so my company can comply with U.S. law.  Where can I find this list?

OFAC s regulations are broader than the specific laws dealing with terrorists and persons who support them.  All individuals and entities that fall under U.S. jurisdiction should use OFAC s List of Specially Designated Nationals and Blocked Persons (SDN List).  This list includes specially designated global terrorists and narcotics traffickers, among other designated persons, and is available on OFAC s website.  In addition, OFAC maintains other sanctions lists that may have different prohibitions associated with each that apply to U.S. persons or transactions otherwise subject to U.S. jurisdiction.  It is important to note that some OFAC sanctions block categories of persons even if those persons do not appear on the SDN List.  For example, this is the case for any person that meets the definition of the Government of Venezuela in Executive Order 13884 of August 5, 2019 ( Blocking Property of the Government of Venezuela ).  It is also important to note that OFAC s Cuba sanctions prohibit most transactions with Cuban nationals, wherever located.  U.S. persons are expected to exercise due diligence in determining whether any such persons are involved in a proposed transaction. [08-11-2020]


126. I tried to ship a package and it was returned to me because of OFAC sanctions.   Why?

There may have been one or more reasons the package was rejected.  For example, was it destined for Cuba and lacking a description of the contents?  Was it an unlicensed commercial shipment destined for North Korea?  Was it a personal gift destined for an individual in Iran with a stated value exceeding $100?  These examples are legitimate reasons for shipping companies to refuse to process such packages, such as packages that do not conform with shipping company guidelines and rules, as well as OFAC and other U.S. government regulations.  Not only could you be liable for attempting to send such packages, but the shipping companies also could be liable for their role in processing these.  See OFAC s country program webpages for more information on the restrictions on shipments to high-risk jurisdictions, for example the Crimea region of Ukraine, Cuba, Iran, North Korea, or Syria. [08-11-2020]


127. I tried to ship a package and it was "blocked" by the shipping company "due to OFAC sanctions." Why? And how can I get the package unblocked?

Shipping companies are required to "block" packages in which a Specially Designated National ("SDN") or other blocked person has an interest. When a package is required to be "blocked," the shipper must retain the package rather than reject and return it to the sender. Blocking is not required if a general or specific license from OFAC authorizes the shipper to reject or process the package, or if the transaction is otherwise exempted from the prohibitions based on the type or content of the package. To request a license for the package s release, apply online or send a letter with a detailed description of the package s contents and an explanation of the parties involved in the transaction, along with a copy of the package s air waybill or Customs Declaration and Dispatch form, to:

U.S. Department of the Treasury
Office of Foreign Assets Control
Licensing Division
1500 Pennsylvania Avenue, NW
Washington, DC 20220

[02-07-2011]


 

OFAC Licenses


General Questions Regarding OFAC Licenses and Licensing Procedures

74. What is a license?

A license is an authorization from OFAC to engage in a transaction that otherwise would be prohibited. There are two types of licenses: general licenses and specific licenses.

A general license authorizes a particular type of transaction for a class of persons without the need to apply for a license.

A specific license is a written document issued by OFAC to a particular person or entity, authorizing a particular transaction in response to a written license application.

Persons engaging in transactions pursuant to general or specific licenses must make sure that all conditions of the licenses are strictly observed.

OFAC's regulations may contain statements of OFAC's specific licensing policy with respect to particular types of transactions. [06-16-06]


75. Do I have to fill out a particular form to get a license to engage in a transaction?

Most license applications do not have to be submitted on a particular form. However, it is essential to include in the request all necessary information as required in the application guidelines or the regulations pertaining to the particular embargo program. When applying for a license, provide a detailed description of the proposed transaction, including the names and addresses of any individuals/companies involved. The mailing address for license applications is:

Office of Foreign Assets Control
U.S. Department of the Treasury
Treasury Annex
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Attn: Licensing Division

In order to apply for a specific license to release blocked funds, you are encouraged to file an electronic application to have blocked funds released by visiting the following link: https://licensing.ofac.treas.gov/Apply/Introduction.aspx

You may also submit an application for the release of blocked funds which is available on OFAC's website under "Forms." You should print this form, complete the required information, attach payment instructions, and mail it to the address listed above.

Depending upon the transaction, there may be specific guidance available on OFAC's website under relevant "Guidance on Licensing policy" on OFAC's various sanctions program web pages. [10-08-13]


76. Can I appeal a denial of my license application?

A denial by OFAC of a license application constitutes final agency action. The regulations do not provide for a formal process of appeal. However, OFAC will reconsider its determinations for good cause, for example, where the applicant can demonstrate changed circumstances or submit additional relevant information not previously made available to OFAC. [09-10-02]


77. How can I find out the status of my pending license application?

OFAC will notify applicants in writing as soon as a determination has been made on their application. The length of time for determinations to be reached will vary depending on the complexity of the transactions under consideration, the scope and detail of interagency coordination, and the volume of similar applications awaiting consideration. Applicants are encouraged to wait at least two weeks before telephonically contacting the Licensing Division at (202) 622-2480 to inquire about the status of their application. Callers can use OFAC's automated license application status hotline (accessible through the 202-622-2480 number) to check on the status of their application. [10-08-13]


78. What agencies other than Treasury review OFAC license applications and what are the roles of these other agencies?

Many of OFAC's licensing determinations are guided by U.S. foreign policy and national security concerns. Numerous issues often must be coordinated with the U.S. Department of State and other government agencies, such as the U.S. Department of Commerce. Please note that the need to comply with other provisions of 31 C.F.R. chapter V, and with other applicable provisions of law, including any aviation, financial, or trade requirements of agencies other than the Department of Treasury's Office of Foreign Assets Control. Such requirements include the Export Administration Regulations, 15 C.F.R. Parts 730 et seq., administered by the Department of Commerce, and the International Traffic in Arms Regulations, 22 C.F.R. Parts 120-130, administered by the Department of State. [06-16-06]


51. How do I apply for a license to get my money unblocked?

With respect to blocked funds transfers, you are encouraged to file an electronic application to have blocked funds released by visiting the following link: https://licensing.ofac.treas.gov/Apply/Introduction.aspx

You may also submit an application for the release of blocked funds which is available on OFAC's website under "Forms." You should print this form, complete the required information, attach payment instructions, and mail it to:

Office of Foreign Assets Control
U.S. Department of the Treasury
Treasury Annex
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Attn: Licensing Division

It is extremely important that the underlying transaction be described in detail and copies of supporting documentation be included in the package. [10-08-13]


58. What are the chances that my application will be approved?

Each application is reviewed on a case-by-case basis and often requires interagency consultation. Although we cannot predict how long this review might take, following existing application guidelines will help to expedite your determination. [09-10-02]


59. Do I need a registration number or license to donate goods?

Most OFAC sanctions programs provide exemptions to their prohibitions for certain donated goods, such as articles to relieve human suffering. This is not the case for all programs, however. You should refer to the legal section of OFAC's website for the regulations applicable to the specific target or target country of your donation. [09-10-02]


Questions Regarding Licenses Authorizing Exports of Agricultural Commodities, Medicine, and Medical Devices to Iran and Sudan Pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA)

97. What format options are permitted for submitting license applications pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA)?

OFAC permits two format options for submitting TSRA license applications:  online or hard-copy, though we highly recommend the use of OFAC s online application portal.  Applications submitted via mail must be accompanied by a cover letter that includes some essential information:  the purpose of the application and the applicant s full contact information.  If either the cover letter or the pertinent information is missing, the application is considered incomplete and risks delay or rejection.  As of January 17, 2017, a specific license from OFAC is not required to export or reexport agricultural commodities, medicines, or medical devices to Sudan, as such transactions are authorized by a general license now set forth in 31 C.F.R. § 596.506. [08-11-2020]


98. How should I present my TSRA license application?

Applicants should clearly enumerate in a table format all pertinent information related to their proposed transactions, including: a) Full names and addresses of all parties involved in the transactions and their roles, including financial institutions and any Iranian broker (identify company principals), purchasing agent (identify company principals), end-user(s) (full contact name), or other participants involved in the purchase of the proposed export items; and b) If applicable, the commodity classification numbers that are associated with the proposed export items.  As of January 17, 2017, a specific license from OFAC is not required to export or reexport agricultural commodities, medicines, or medical devices to Sudan, as such transactions are authorized by general license now set forth in 31 C.F.R. § 596.506. [08-11-2020]


100. If I am submitting multiple TSRA license applications at the same time, should I send them under a single cover letter?

OFAC requires applicants to submit each individual application separately; regardless of if you are completing the online application or sending in a hard copy application through the mail. If an applicant is submitting a hard copy, each application should be in a separate envelope, accompanied by a separate cover letter. Applicants should not submit multiple applications in a single envelope with a single cover letter. If you submit applications in that manner, you may encounter some delay in the processing of your applications. Therefore, in order to prevent such delay, submit one application with one cover letter per envelope. [03-16-2015]


101. Should I send a sample of the proposed export product as an attachment to my TSRA license application?

No. OFAC does not require samples of proposed export products to be sent as attachments to any application. OFAC does not need to examine samples of the actual product in making its final determination. Therefore, please do not include any samples with your application. [06-14-2007]


Specific to Iran

117. I hold a specific license to sell agricultural goods, medicine, or medical devices to Iran. The general license at section 560.532(a)(4) of the Iranian Transactions and Sanctions Regulations (ITSR) authorizes me to accept a letter of credit issued by an Iranian financial institution whose property and interests in property are blocked solely pursuant to the ITSR (i.e., an Iranian financial institution that is not listed on OFAC s List of Specially Designated Nationals and Blocked Persons (SDN List)). The general license, however, also states that a U.S. financial institution may not advise, confirm, or otherwise deal in that credit. How am I supposed to know if/when a letter of credit has been issued for my sale and how do I get paid? My bank accounts are all at U.S. financial institutions.

This language is in the general license at section 560.532(a)(4) of the ITSR because it is contrary to U.S. foreign policy to allow U.S. financial institutions to maintain active correspondent relationships with Iranian banks. The language, however, does not preclude a U.S. financial institution or an entity owned or controlled by a United States Person and established or maintained outside the United States ( U.S.-owned or -controlled foreign entity ) from being a second advising bank (i.e. receiving and passing forward advice from a third-country bank that the credit has been issued), nor does it preclude the U.S. financial institution or a U.S.-owned or -controlled foreign entity from receiving funds in payment for the licensed export from a third-country bank. You should also note that the Iranian Transactions and Sanctions Regulations authorize U.S. financial institutions and U.S.-owned or -controlled foreign entities to directly advise or confirm letters of credit issued by third-country banks for authorized shipments. The third-country bank may not be an overseas branch of a U.S. financial institution, a U.S.-owned or -controlled foreign entity, an Iranian financial institution, or the Government of Iran, unless otherwise authorized by OFAC. In none of these circumstances, however, may there be any direct or indirect involvement of entities the property and interests in property of which have been blocked under any of the programs administered by OFAC, except for persons whose property and interests in property are blocked solely pursuant to Executive Order 13599 and the Iranian Transactions and Sanctions Regulations. [01-13-2017]


Specific to Sudan

500. I am an exporter of agricultural commodities, medicine, or medical devices to Sudan and have previously obtained specific licenses from OFAC for such exports. Do I still need to apply for a specific license from OFAC for exports or reexports of such items to Sudan?

No.  As of January 17, 2017, a specific license from OFAC is not required to export or reexport agricultural commodities, medicines, or medical devices to Sudan, as such transactions are authorized by general license now set forth in 31 C.F.R. § 596.506.  Further, consistent with 31 C.F.R. § 501.801, OFAC generally does not issue applications for specific licenses authorizing transactions that are authorized by an existing general license.  

However, pursuant to the aforementioned general licenses, which implement certain requirements of TSRA, any exports or reexports of agricultural commodities, medicine, or medical devices to the Government of Sudan, to any individual or entity in Sudan, or to any person in a third country purchasing specifically for resale to any of the foregoing, must be shipped within 12 months of the date of the signing of the contract for the relevant export or reexport of such items to Sudan. [08-11-2020]


 

How to Receive Notifications About OFAC Updates

86. Does OFAC have an email service that will notify me when there are updates to any of its sanctions lists?

Yes. OFAC has multiple e-mail subscription services available. Please visit the following link to sign up for these services:

https://service.govdelivery.com/service/multi_subscribe.html?code=USTREAS

OFAC also maintains a Really Simple Syndication (RSS) feed. This feed is updated whenever the OFAC site is updated. [11-18-10]


92. I'm a subscriber to OFAC's e-mail notification services. For some reason I have stopped receiving the broadcast messages when OFAC updates its website. Why is this?

Check to see if the messages are in your SPAM folder. Mostly likely, it is your SPAM filter or your network configuration that is preventing you from receiving the OFAC broadcast messages. If you believe that may be the case, please discuss the matter with your IT department or network administrator. You may need to have your IT personnel allow e-mails from the following domain to come through the SPAM filter, "subscriptions.treas.gov;" in some cases allowing the domain, treas.gov through the filter will also work. If you believe that you have been removed from the subscription list in error you may contact OFAC at O_F_A_C@do.treas.gov or re subscribe here. [04-21-15]


93. I recently attempted to subscribe to one of OFAC s e-mail list services and I have not yet received my confirmation e-mail. Why is this?

Failure to receive a confirmation e-mail is typically (though not always) the result of a configuration problem on the user s end. The user should follow these steps to ensure that he or she is using the system properly.

  1. Be patient. For a variety of reasons e-mail sometimes take a little longer than expected to reach a user. If you do not receive a confirmation e-mail within a day of subscribing, proceed to step 2.
  2. Confirm that you have entered the correct e-mail address and address punctuation. A surprising number of errors have been the result of users accidentally using commas instead of periods.
  3. Check to see if you have a SPAM filter in place. SPAM filters have a variety of configurations. Some of these filters have been known to erroneously block e-mails originating from OFAC s list servers. OFAC cannot provide technical support for local configuration issues. If you believe a SPAM filter is preventing you from receiving OFAC e-mails, please discuss the matter with your IT department or network administrator. You will need to have your IT personnel allow e-mails from the following domain to come through the SPAM filter "subscriptions.treas.gov". Once this is done you may proceed to step 4. If you can confirm that you do not have a SPAM filter in place or any other local configuration problem, please skip step 4 and proceed to step 5.
  4. If your network or e-mail client s configuration is preventing you from receiving your subscription confirmation e-mail, it is likely that you will not be able to receive e-mail from OFAC s list servers even if OFAC manually adds you to our listserv. These configuration issues must be resolved with your IT department or network administrator before you can proceed.
  5. If, after you have exhausted all of the above options, you still fail to receive OFAC s broadcast notifications, please call our support hotline at 1-800-540-6322. [12-19-07]

 

OFAC Information on a Credit Report

70. What Is This OFAC Information On My Credit Report?

Credit bureaus and agencies in particular have adopted new measures to ensure compliance with OFAC regulations. Before issuing a credit report, they use screening software to determine if a credit applicant is on OFAC's Specially Designated Nationals (SDN) list or one of OFAC's other sanctions lists. This software matches the credit applicant's name and other information to the names on OFAC's sanctions lists. If there is a potential match, the credit bureaus may place a "red flag" or alert on the report. This does not necessarily mean that someone is illegally using your social security number or that you have bad credit. It is merely a reminder to the person checking your credit that he or she should verify whether you are the individual on one of OFAC's sanctions lists by comparing your information to the OFAC information. If you are not the individual on the sanctions list, the person checking your credit should disregard the OFAC alert, and there is no need to contact OFAC. However, if the person checking your credit believes you are the person on one of OFAC's sanctions lists, then he or she should call the OFAC Hotline to verify and report it. [01-30-15]


71. How Can I Get The OFAC Alert Off My Credit Report?

A consumer has the right under the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681 et seq., to request the removal of incorrect information on his/her credit report. To accomplish this, consumers should contact the credit reporting agency or bureau that issued the credit report. For more information on consumers' rights under the FCRA, visit the Federal Trade Commission's website at http://www.ftc.gov/os/statutes/fcrajump.shtm or the Consumer Financial Protection Bureau at 855-411-2372. [01-30-2015]


 

 

Entities Owned by Persons Whose Property and Interest in Property are Blocked (50% Rule)

These Frequently Asked Questions (FAQs) respond to inquiries received by the Department of the Treasury s Office of Foreign Assets Control (OFAC) relating to the status of entities owned by individuals or entities whose property and interests in property are blocked under Executive orders and regulations administered by OFAC (blocked persons). These FAQs provide additional clarity regarding revised guidance that OFAC issued on August 13, 2014, which can be found on OFAC s website here, amending earlier guidance that had been issued on February 14, 2008 (OFAC s 50 Percent Rule). The revised guidance states that the property and interests in property of entities directly or indirectly owned 50 percent or more in the aggregate by one or more blocked persons are considered blocked regardless of whether such entities appear on OFAC s Specially Designated Nationals and Blocked Persons List (SDN List) or the annex to an Executive order. The revised guidance expands upon the earlier guidance by addressing entities owned 50 percent or more in the aggregate by more than one blocked person.*

For the purposes of clarification, see specific FAQs below. If you require additional guidance with respect to the application of OFAC s 50 Percent Rule, you may contact OFAC and submit information pertaining to the specific facts and circumstances. [10-31-2017]

*OFAC also applies a 50 percent rule to entities on the Sectoral Sanctions Identifications List (SSI List) created in July 2014 in the Ukraine-/Russia-related sanctions context. The property and interests in property of persons on the SSI List (and entities owned 50 percent or more in the aggregate by one or more persons subject to the SSI List restrictions) are not required to be blocked; instead a more limited set of transaction restrictions applies to them. In the context of the SSI List restrictions, therefore, these FAQs can be used to identify which subordinate entities are subject to the SSI List restrictions only and are not meant to suggest that any additional actions (such as blocking) apply to those entities.  The references to 33 percent or greater ownership and ownership of a majority of the voting interests in Directive 4, as amended on October 31, 2017, do not change the applicability of OFAC s 50 percent rule in the Directive 4 context.  For additional information, see FAQs 373537, and 538


398. Does OFAC consider entities over which one or more blocked persons exercise control, but of which they do not own 50 percent or more in the aggregate, to be blocked pursuant to OFAC s 50 Percent Rule?

No.  OFAC s 50 Percent Rule speaks only to ownership and not to control.  An entity that is controlled (but not owned 50 percent or more) by one or more blocked persons is not considered automatically blocked pursuant to OFAC s 50 Percent Rule.  OFAC may, however, designate the entity under an available sanctions criteria or otherwise identify the entity as blocked property if determined to be controlled by one or more designated persons and add the entity to OFAC s List of Specially Designated Nationals and Blocked Persons (SDN List). 

OFAC urges caution when considering a transaction with an entity that is not a blocked person (a non-blocked entity) in which one or more blocked persons have a significant ownership interest that is less than 50 percent or which one or more blocked persons may control by means other than a majority ownership interest.  Such non-blocked entities may become the subject of future designations or enforcement actions by OFAC.  In addition, persons should be cautious in dealing with such a non-blocked entity to ensure that they are not, for example, dealing with a blocked person representing the non-blocked entity, such as entering into a contract that is signed by a blocked person.  Please also note that some sanctions programs (e.g., the Crimea region of Ukraine, Cuba, Iran, North Korea, Syria, and Venezuela) block certain persons without an OFAC designation; these blockings are based on criteria separate from OFAC s 50 Percent Rule, such as the blocking of persons that meet the definition of a blocked government. [08-11-2020]


399. Does OFAC aggregate ownership stakes of all blocked persons when determining whether an entity is blocked pursuant to OFAC s 50 Percent Rule?

Yes. On August 13, 2014, OFAC indicated in its revised 50 Percent Rule guidance that OFAC's 50 Percent Rule applies to entities owned 50 percent or more in the aggregate by one or more blocked persons. Accordingly, if Blocked Person X owns 25 percent of Entity A, and Blocked Person Y owns another 25 percent of Entity A, Entity A is considered to be blocked. This is so because Entity A is owned 50 percent or more in the aggregate by one or more blocked persons. For the purpose of calculating aggregate ownership, the ownership interests of persons blocked under different OFAC sanctions programs are aggregated. [08-13-2014]


400. As explained in FAQ 398, OFAC s 50 Percent Rule does not apply if one or more individuals who are blocked persons (blocked individuals) control, but do not own 50 percent or more of, an entity. Can persons engage in negotiations, enter into contracts, or process transactions involving a blocked individual when that blocked individual is acting on behalf of the non-blocked entity that he or she controls (e.g., a blocked individual is an executive of a non-blocked entity and is signing a contract on behalf of the non-blocked entity)?

No. OFAC sanctions generally prohibit transactions involving, directly or indirectly, a blocked person, absent authorization from OFAC, even if the blocked person is acting on behalf of a non-blocked entity. Therefore, U.S. persons should be careful when conducting business with non-blocked entities in which blocked individuals are involved; U.S. persons may not, for example, enter into contracts that are signed by a blocked individual. [08-13-2014]


401. OFAC s 50 Percent Rule states that the property and interests in property of entities directly or indirectly owned 50 percent or more in the aggregate by one or more blocked persons are considered blocked. How does OFAC interpret indirect ownership as it relates to certain complex ownership structures?

"Indirectly," as used in OFAC s 50 Percent Rule, refers to one or more blocked persons' ownership of shares of an entity through another entity or entities that are 50 percent or more owned in the aggregate by the blocked person(s). OFAC urges persons considering a potential transaction to conduct appropriate due diligence on entities that are party to or involved with the transaction or with which account relationships are maintained in order to determine relevant ownership stakes. Please see FAQ 116 for additional guidance on due diligence standards for intermediary parties to wire transfers. Please refer to the examples below for further guidance on determining whether an entity is blocked pursuant to OFAC's 50 Percent Rule.

Example 1: Blocked Person X owns 50 percent of Entity A, and Entity A owns 50 percent of Entity B. Entity B is considered to be blocked. This is so because Blocked Person X owns, indirectly, 50% of Entity B. In addition, Blocked Person X's 50 percent ownership of Entity A makes Entity A a blocked person. Entity A's 50 percent ownership of Entity B in turn makes Entity B a blocked person.

Example 2: Blocked Person X owns 50 percent of Entity A and 50 percent of Entity B. Entities A and B each own 25 percent of Entity C. Entity C is considered to be blocked. This is so because, through its 50 percent ownership of Entity A, Blocked Person X is considered to indirectly own 25 percent of Entity C; and through its 50 percent ownership of Entity B, Blocked Person X is considered to indirectly own another 25 percent of Entity C. When Blocked Person X's indirect ownership of Entity C through Entity A and Entity B is totaled, it equals 50 percent. Entity C is also considered to be blocked due to the 50 percent aggregate ownership by Entities A and B, which are themselves blocked entities due to Blocked Person X's 50 percent ownership of each.

Example 3: Blocked Person X owns 50 percent of Entity A and 10 percent of Entity B. Entity A also owns 40 percent of Entity B. Entity B is considered to be blocked. This is so because, through its 50 percent ownership of Entity A, Blocked Person X is considered to indirectly own 40 percent of Entity B. When added to Blocked Person X's direct 10 percent ownership of Entity B, Blocked Person X's total ownership (direct and indirect) of Entity B is 50 percent. Entity B is also blocked due to the 50 percent aggregate ownership by Blocked Person X and Entity A, which are themselves both blocked persons.

Example 4: Blocked Person X owns 50 percent of Entity A and 25 percent of Entity B. Entities A and B each own 25 percent of Entity C. Entity C is not considered to be blocked. This is so because, even though Blocked Person X is considered to indirectly own 25 percent of Entity C through its 50 percent ownership of Entity A, Entity B is not 50 percent or more owned by Blocked Person X, and therefore Blocked Person X is not considered to indirectly own any of Entity C through its part ownership of Entity B. Blocked Person X's total ownership (direct and indirect) of Entity C therefore does not equal or exceed 50 percent. Entity A is itself a blocked person, but its ownership of Entity C also does not equal or exceed 50 percent.

Example 5: Blocked Person X owns 25 percent of Entity A and 25 percent of Entity B. Entities A and B each own 50 percent of Entity C. Entity C is not considered to be blocked. This is so because Blocked Person X's 25 percent ownership of each of Entity A and Entity B falls short of 50 percent. Accordingly, neither Entity A nor Entity B is blocked and Blocked Person X is not considered to indirectly own any of Entity C through its part ownership of Entities A or B. [08-13-2014]


402. How does OFAC s 50 Percent Rule apply to situations in which one or more blocked persons owned 50 percent or more of an entity, but subsequent to their designations one or more blocked persons divest their ownership stakes in the entity in a transaction that occurs entirely outside of U.S. jurisdiction such that the resulting combined ownership of the entity by blocked persons is less than 50 percent? How should a person treat property or interests in property of such an entity (1) in future transactions (post-divestment) and (2) that was properly blocked while the entity was owned 50 percent or more by one or more blocked persons?

According to OFAC's 50 Percent Rule, entities are considered blocked if they are owned 50 percent or more (directly or indirectly) in the aggregate by one or more blocked persons. If one or more blocked persons divest their ownership stake such that the resulting combined ownership by blocked persons is less than 50 percent, the entity is no longer considered automatically to be a blocked entity. Any such divestment transactions must occur entirely outside of U.S. jurisdiction and must not involve U.S. persons, as any blocked property or interests in property that come into the possession or control of a U.S. person must be blocked and reported to OFAC, and OFAC does not recognize any subsequent unlicensed transfers, through changes in ownership or otherwise, of such property.

Entities in which the aggregate of one or more blocked persons' ownership stakes has fallen below 50 percent are not considered blocked pursuant to OFAC's 50 Percent Rule, and therefore property of such entities that comes into the United States or the possession or control of a U.S. person while the aggregate of one or more blocked persons' ownership stakes is below 50 percent is not considered blocked by OFAC's 50 Percent Rule. OFAC urges caution when dealing with or processing transactions involving such entities, as those entities may become the subject of future designations or enforcement actions by OFAC. Sufficient due diligence should be conducted to determine that any purported divestment in fact occurred and that the transfer of ownership interests was not merely a sham transaction.

When the property of an entity owned 50 percent or more by a single blocked person comes within the United States or within the possession or control of a U.S. person and is blocked, the property remains blocked unless and until (1) OFAC authorizes the unblocking of or other dealings in the property or (2) OFAC removes the blocked person from the SDN List. The property remains blocked even if the blocked person's ownership of the entity subsequently falls below 50 percent. This is so because the blocked person is considered to have an interest in the blocked property, and OFAC does not recognize the unlicensed transfer of the blocked person s interest after the property becomes blocked in the United States or in the possession or control of a U.S. person. Persons holding such property may request authorization from OFAC's Licensing Division to transfer or otherwise deal in that property (the electronic application can be found on OFAC's website here), and OFAC will evaluate such requests on a case-by-case basis.

Similarly, when the property of an entity owned 50 percent or more in the aggregate by more than one blocked person comes within the United States or in the possession or control of a U.S. person and is blocked, the property remains blocked unless and until (1) OFAC authorizes the unblocking of or other dealings in the property or (2) OFAC removes from the SDN List one or more of the blocked persons such that the aggregate ownership by blocked persons falls below 50 percent. If the aggregate ownership of the entity by blocked persons falls below 50 percent not due to SDN List removal actions by OFAC but instead due to actions by one or more of the blocked persons, including the entity itself, the property remains blocked. This is so because the group of blocked persons is considered to have an interest in the blocked property, and OFAC does not recognize the unlicensed transfer of any of the blocked persons' interests after the property becomes blocked in the United States or in the possession or control of a U.S. person. Persons holding such property may request authorization from OFAC's Licensing Division to transfer or otherwise deal in that property (the electronic application can be found on OFAC s website here), and OFAC will evaluate such requests on a case-by-case basis. [08-13-2014]


 

Cross-Programmatic Compliance Services Guidance

495. Why did OFAC issue the Guidance on the Provision of Certain Services Relating to the Requirements of U.S. Sanctions Laws (the Compliance Services Guidance )?

OFAC has received numerous inquiries, many from foreign companies at outreach events, regarding whether U.S. persons may provide, and whether U.S. persons have been able to provide in the past, certain types of legal and compliance services to covered persons. The Compliance Services Guidance provides clarity in response to those inquiries. For purposes of the Compliance Services Guidance, covered persons means U.S. persons and foreign persons other than any person (i) whose property and interests in property are blocked pursuant to any part of 31 C.F.R. chapter V, including persons listed on OFAC s List of Specially Designated Nationals and Blocked Persons (SDN List), or (ii) to whom a U.S. person is prohibited from exporting services or from whom a U.S. person is prohibited from importing services pursuant to any part of 31 C.F.R. chapter V. The Compliance Services Guidance does not describe every allowable service relating to the requirements of U.S. sanctions laws. [01-12-2017]


496. Does the Compliance Services Guidance represent a change in OFAC s policy with respect to the provision of legal and compliance services?

No. The Compliance Services Guidance does not reflect a change in OFAC s policy with respect to the provision of these types of legal and compliance services. OFAC is issuing the Compliance Services Guidance in response to numerous inquiries to ensure that both U.S. and foreign individuals and entities understand that U.S. persons may provide services consistent with the Compliance Services Guidance. [01-12-2017]


497. In providing services consistent with the Compliance Services Guidance to a foreign covered person, can a U.S. person opine on the legality of a transaction under U.S. sanctions laws, including by providing a legal opinion, certification, or other clearance as to the legality of such transaction, where it would be prohibited for a U.S. person to engage in such transaction?

Yes. In providing services to a foreign covered person, a U.S. person may opine on the legality of a transaction under U.S. sanctions laws, including by providing a legal opinion, certification, or other clearance as to the legality of such transaction, where it would be prohibited for a U.S. person to engage in the transaction. U.S. persons may not provide such services to persons who are subject to certain restrictions under OFAC s regulations, such as persons listed on OFAC s SDN List.

U.S. persons, wherever located, may not otherwise approve, finance, facilitate, or guarantee any transaction by a foreign person, including one that meets the definition of a covered person, as defined in FAQ #495, where the transaction by that foreign person would be prohibited by 31 C.F.R. chapter V if performed by a U.S. person or within the United States. For example, U.S. persons could not vote on a transaction (e.g., as a board member), or execute transaction documents (other than as to the legality of the transaction, as specified above), where the transaction would be prohibited if performed by a U.S. person or within the United States. [01-12-2017]


498. The Compliance Services Guidance states that a U.S. person may solicit information from covered persons and conduct research to make a determination as to the legality of transactions under U.S. sanctions laws. What are examples of research that would be allowable under the Compliance Services Guidance?

U.S. persons may conduct research using the internet, including searches of commercial databases, as well as published reference materials for the purpose of determining the legality of transactions under U.S. sanctions laws. In addition, U.S. persons may solicit information regarding a transaction from covered persons, such as, for example, the currency involved; any involvement of U.S. persons, directly or indirectly; and the identity of the covered person s counterparty. [01-12-2017]


499. What type of research exceeds the scope of the Compliance Services Guidance?

A U.S. person may not conduct research that otherwise involves the importation or exportation of services where such transactions are prohibited by any part of 31 C.F.R. chapter V, unless such transactions are authorized by OFAC. [01-12-2017]


Burma Sanctions

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 app arent 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. [10-07-2016]


 

Cuba Sanctions


693. What did the September 9, 2019 amendment to the Cuban Assets Control Regulations (CACR) do?

Effective October 9, 2019 an amendment to the CACR revises certain authorizations for remittances to Cuba to impose new requirements and limitations, eliminates the authorization for donative remittances, and revises the authorization commonly known as the U-turn general license.

  • The September 9, 2019 amendment revises the U-turn general license located at 31 CFR § 515.584(d) to eliminate the authorization for banking institutions subject to U.S. jurisdiction to process U-turn transactions; i.e., funds transfers that originate and terminate outside the United States where neither the originator nor beneficiary is a person subject to U.S. jurisdiction. The amended U-turn general license authorizes banking institutions that are persons subject to U.S. jurisdiction to reject and not require them to block such transactions. For more on changes to the U-turn general license, please see FAQ 757.
  • With respect to remittances, the September 9, 2019 rule amends the general license authorizing family remittances to (1) place a cap of $1,000 as the maximum amount that one remitter can send to one Cuban national as a family remittance per quarter, and (2) exclude close relatives of prohibited officials of the Government of Cuba or close relatives of prohibited members of the Cuban Communist Party as authorized recipients of family remittances. (The prohibited officials themselves were already barred from being recipients of such remittances. See 31 CFR § 515.570(a), as well as 31 CFR § 515.339 for the definition of close relatives .) The September 9, 2019 rule also amends the general license authorizing remittances to certain individuals and independent non-governmental organizations in Cuba to now authorize remittances to certain additional self-employed individuals (See 31 CFR § 515.570(g), as well as 31 CFR § 515.340, for the new definition of self-employed individuals ). Effective October 9, 2019, OFAC eliminated the general license for donative remittances that was previously located at 31 CFR § 515.570(b). For more on changes to remittances, please see FAQ 732. [09-06-2019]

694. What did the June 5, 2019 amendments to CACR do?

Previously, on June 5, 2019, an amendment to the CACR removed an authorization for people-to-people educational travel that was conducted under the auspices of an organization that is subject to U.S. jurisdiction and that sponsors such exchanges to promote people-to-people contact (group people-to-people educational travel). The amendment includes a grandfather clause, however, that authorizes certain group people-to-people educational travel that previously was authorized, so long as the traveler had already completed at least one travel-related transaction (su ch as purchasing a flight or reserving accommodation) prior to June 5, 2019.

On June 16, 2017, the President issued National Security Presidential Memorandum-5 on Strengthening the Policy of the United States Toward Cuba (the NSPM). On November 9, 2017, OFAC amended the CACR to implement the NSPM. On April 17, 2019, the Administration announced regulatory changes to further implement the NSPM and the President s foreign policy toward Cuba, including that the Department of the Treasury would further restrict non-family travel. The regulatory actions taken on June 5, 2019 and September 9, 2019 implement the President s foreign policy toward Cuba as announced on April 17, 2019.

Please note that the Cuba embargo remains in place, and most transactions between the United States, or persons subject to U.S. jurisdiction, and Cuba continue to be prohibited. OFAC continues to enforce the prohibitions of the CACR.

The Department of Commerce s Bureau of Industry and Security (BIS), in coordination with OFAC s June 5, 2019 amendment, amended its Export Administration Regulations (EAR) (15 CFR Parts 730-774). For additional information, see BIS s Cuba webpage. [09-06-2019]


Travel


695. What are the general travel authorizations in the Cuba program?

Travel-related transactions are permitted by general or specific licenses for certain travel related to the 12 categories of activities identified in § 515.560(a).  Those travel-related transactions permitted by general license, subject to specified criteria and conditions, include: family visits; official business of the U.S. government, foreign governments, and certain intergovernmental organizations; journalistic activity; professional research; educational activities; religious activities; athletic competitions by amateur or semi-professional athletes or athletic teams; support for the Cuban people; humanitarian projects; activities of private foundations or research or educational institutes; exportation, importation, or transmission of information or information materials; and certain authorized export transactions. Each person relying on a certain general authorization must retain specific records related to the authorized travel transactions. See §§ 501.601 and 501.602 of Reporting, Procedures and Penalties Regulations for applicable recordkeeping and reporting requirements.

In accordance with NSPM-5, on November 9, 2017, OFAC added a prohibition to restrict certain direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List. For a description of the scope of the prohibition on direct financial transactions and the restrictions and exceptions that apply, see 31 CFR § 515.209. In order to implement this prohibition, OFAC made a conforming change to § 515.421 and added corresponding language in the following general licenses: §§ 515.530, 515.534, 515.545, 515.560, 515.561, 515.564, 515.565,
515.566, 515.567, 515.572, 515.573, 515.574, 515.576, 515.577, 515.578, 515.581, 515.584, and
515.590. OFAC has not incorporated this prohibition into certain general licenses in accordance with the exceptions detailed in section 3(a)(iii) of NSPM-5.  

Also, on September 24, 2020, OFAC added a prohibition at § 515.210 of the CACR, which prohibits any person subject to U.S. jurisdiction from lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property that the Secretary of State has identified as a property in Cuba that is owned or controlled by the Cuban government; a prohibited official of the Government of Cuba, as defined in § 515.337; a prohibited member of the Cuban Communist Party, as defined in § 515.338; a close relative, as defined in § 515.339, of a prohibited official of the Government of Cuba, or a close relative of a prohibited member of the Cuban Communist Party, when the terms of the general or specific license expressly exclude such a transaction. In furtherance of this change, the State Department is creating a new list, the Cuba Prohibited Accommodations List, to publish the names, addresses, or other identifying details, as relevant, of properties identified as meeting such criteria. In order to implement this prohibition, OFAC made a conforming change to § 515.421 and added corresponding language in the following general licenses:  §§ 515.533, 515.545, 515.559, 515.560, 515.561, 515.563, 515.564, 515.565, 515.566, 515.567, 515.572, 515.574, 515.575, and 515.576. [09-23-2020]
 


696. Are authorized travelers who have initiated travel arrangements prior to the addition of an entity or subentity on the State Department's Cuba Restricted List required to cancel their Cuba-related travel plans if their travel arrangements involve direct financial transactions with a listed entity or subentity?

Consistent with the Administration's interest in avoiding negative impacts on Americans for arranging lawful travel to Cuba, any travel-related arrangements that include direct financial transactions with entities and subentities that appear on the State Department's Cuba Restricted List will continue to be permitted, provided that those travel arrangements were initiated prior to the State Department's addition of the entity or subentity to the list. Once the State Department adds an entity or subentity to the Cuba Restricted List, new direct financial transactions with the entity or subentity are prohibited, unless authorized by OFAC or exempt. For a complete description of the scope of the prohibition on direct financial transactions and the restrictions and exceptions that apply, see 31 CFR § 515.209. [09-06-2019]


697. Do travelers who fall within the scope of a general license need to submit a written request to OFAC for permission to travel or conduct transactions?

No. No further permission from OFAC is required to engage in transactions by a person who meets all criteria in a general license. Individuals wishing to engage in activities that may fall within the scope of a general license should review the relevant general licenses contained in the CACR to determine whether their travel-related transactions are covered by such general licenses. Persons subject to U.S. jurisdiction who wish to engage in any travel within the 12 categories of activities specified in the CACR that does not meet the requirements of a general license will need to apply for a specific license from OFAC. [11-08-2017]


698. Is travel to Cuba for tourist activities permitted?

No. Consistent with the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), travel-related transactions involving Cuba are only permitted for the 12 categories of activities identified in the CACR. Travel-related transactions for other purposes remain prohibited. [11-08-2017]


699. What constitutes "a close relative" for generally authorized family travel?

OFAC regulations generally authorize persons subject to U.S. jurisdiction and those sharing a dwelling with them as a family to visit a close relative in Cuba, including a close relative who is a Cuban national or a person ordinarily resident in Cuba, or to visit or accompany a close relative who is located in or traveling to Cuba pursuant to the authorizations in § 515.562 (official government business), § 515.563 (journalistic activity), § 515.564(a) (professional research), § 515.565(a)(1)(i) through (iv) and (vi) (educational activities), § 515.566 (religious activities), § 515.575 (humanitarian projects), or § 515.576 (activities of private foundations or research or educational institutes). A close relative is defined as any individual related to a person “by blood, marriage, or adoption who is no more than three generations removed from that person or from a common ancestor with that person.” For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.339 and § 515.561. In accordance with NSPM-5, OFAC amended the general license in § 515.561 to exclude direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List from the authorizations. For a description of the scope of the prohibition on direct financial transactions and the restrictions and exceptions that apply, see 31 CFR § 515.209. [09-06-2019]


700. Who is generally authorized to engage in travel and travel-related transactions for “journalistic activity”?

Section 515.563 of the CACR contains a general license that authorizes, subject to conditions, travel- related transactions and other transactions that are directly incident to journalistic activities in Cuba. Among other things, this general license authorizes, subject to conditions, full-time journalists, supporting broadcast or technical personnel, and freelance journalists to travel to Cuba. The traveler’s schedule of activities must not include free time or recreation in excess of that consistent with a full- time schedule. An entire group does not qualify for the general license merely because some members of the group qualify individually. Also, and effective September 24, 2020, OFAC amended this general license to exclude from the authorization lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.563. [09-23-2020]


701. What constitutes generally authorized travel-related transactions for “professional research” in Cuba?

Section 515.564(a) of the CACR contains a general license that authorizes, subject to conditions, travel-related transactions and other transactions that are directly incident to professional research in Cuba. Among other things, this general license authorizes, subject to conditions, professional research in Cuba relating to a traveler’s profession, professional background, or area of expertise, including area of graduate-level full-time study. In accordance with NSPM-5, OFAC amended this general license to exclude direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List from its authorization. Also, and effective September 24, 2020, OFAC amended this general license to exclude from the authorization lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. The traveler’s schedule of activities must not include free time or recreation in excess of that consistent with a full-time schedule of professional research. An entire group does not qualify for the general license merely because some members of the group qualify individually. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.564. 

On September 24, 2020, OFAC eliminated the general license previously contained in §515.564(a)(2) for travel-related transactions and other transactions that are directly incident to attendance at, or organization of, professional meetings or conferences in Cuba. Persons subject to U.S. jurisdiction are no longer generally authorized to attend or organize professional meetings or conferences in Cuba pursuant to this section. OFAC amended § 515.564 to clarify that specific licenses may be issued on a case-by-case basis authorizing the travel-related transactions in § 515.560(c) and other transactions that are related to professional research in Cuba that do not qualify for the general license under 515.564(a) or professional meetings or conferences in Cuba that are not authorized under other travel-related authorizations and that relate to activities otherwise authorized pursuant to the CACR. [09-23-20]


702. What constitutes “educational activities” for generally authorized travel and other transactions?

OFAC amended the general license for educational activities in accordance with NSPM-5 process to authorize travel that was permitted by regulation on January 27, 2011. In addition, OFAC added requirements for certain categories of authorized educational travel that were not permitted by regulation on January 27, 2011 to require that all such travel be conducted under the auspices of an organization that is a person subject to U.S. jurisdiction. In addition, travelers utilizing this authorization must be accompanied by a person subject to U.S. jurisdiction who is a representative of the sponsoring organization. In certain cases where the traveler is an employee, paid consultant, agent, or other representative traveling individually (not as part of a group), the individual may obtain a certification letter from the sponsoring organization. For a complete description of what such a letter must include and which categories of educational travelers may utilize this authorization, see 31 CFR § 515.565(a)(2).

Among other things, this general license authorizes, subject to conditions, faculty, staff, and students at U.S. academic institutions and secondary schools to engage in certain educational activities, including study abroad programs, in Cuba, Cuban scholars to engage in certain educational activities in the United States, and certain activities to facilitate licensed educational programs. U.S. and Cuban universities may engage in academic exchanges and joint non-commercial academic research under the general license. This provision also authorizes persons subject to U.S. jurisdiction to provide standardized testing services and certain internet-based courses to Cuban nationals. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.565.

In accordance with NSPM-5, this general license  excludes direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List. For a description of the scope of the prohibition on direct financial transactions and the restrictions and exceptions that apply, see 31 CFR § 515.209 Also, and effective September 24, 2020, OFAC amended this general license to exclude from the authorization lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. Effective June 5, 2019, OFAC removed the authorization for group people-to-people educational travel. For more information on that change, see FAQ 704.) [09-23-2020]
 


703. Are secondary schools and secondary school students permitted to engage in travel-related transactions under the general license for “educational activities”?

Yes. Educational exchanges, including study abroad programs, sponsored by Cuban or U.S. secondary schools involving secondary school students’ participation in a formal course of study or in a structured educational program offered by a secondary school or other academic institution, and led by a teacher or other secondary school official are authorized. Such exchanges must take place under the auspices of an organization that is a person subject to U.S. jurisdiction, and a person subject to U.S. jurisdiction who is an employee, paid consultant, agent, or other representative of the sponsoring organization (including the leading teacher or secondary school official) must accompany each group traveling to Cuba. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.565(a)(2)(vi). This authorization allows for participation of a reasonable number of adult chaperones to accompany the secondary school students to Cuba. Also, and effective September 24, 2020, OFAC amended this general license to exclude from the authorization lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. [09-23-20]


704. Can travelers still engage in “people-to-people travel” to Cuba on an individual basis or as a part of a group?

Generally, no. Effective June 5, 2019, there is no general license authorizing people-to-people educational activities in Cuba. The term “people-to-people travel” refers to an authorization that previously existed in the CACR, subject to conditions, for persons subject to U.S. jurisdiction to engage in certain educational exchanges in Cuba on an individual basis or under the auspices of an organization that is a person subject to U.S. jurisdiction and sponsors such exchanges to promote people-to-people contact.

On November 9, 2017, in accordance with NSPM-5, OFAC amended the general license for people-to-people educational activities in Cuba to remove the authorization for individual people-to-people educational travel. Effective June 5, 2019, in further accordance with the President’s foreign policy toward Cuba announced in April 2019, OFAC removed the authorization for group people-to-people educational travel in § 515.565(b). There is a grandfather [clause] in § 515.565(b) that authorizes certain group people-to-people educational travel that previously was authorized where the traveler had completed at least one travel-related transaction (such as purchasing a flight or reserving accommodation) prior to June 5, 2019. Also, and effective September 24, 2020, OFAC amended this general license to exclude from the authorization lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210.

For purposes of that grandfather clause only, an “organization” is an entity subject to U.S. jurisdiction that sponsors educational exchanges that do not involve academic study pursuant to a degree program and that sponsors such exchanges to promote people-to-people contact. To the extent proposed travel falls within the scope of the grandfather clause for group people-to-people educational travel, organizations subject to U.S. jurisdiction may proceed with sponsoring such travel without applying to OFAC for a specific license. It is OFAC’s policy not to grant applications for a specific license authorizing transactions where a general license is available. OFAC will apply a policy of denial with respect to applications for a specific license authorizing prohibited people-to-people travel and related transactions effective June 5, 2019.

For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.565.

The export or reexport to Cuba of items subject to the EAR, including vessels and aircraft used to provide carrier services, requires separate authorization from the Department of Commerce. See 31 CFR § 515.533. For additional information regarding BIS’s latest travel-related amendments, see BIS’s Cuba webpage. [09-23-2020]


705. Who is generally authorized to engage in travel-related transactions for “religious activities”?

Section 515.566 of the CACR contains a general license that authorizes, subject to conditions, travel- related transactions and other transactions that are directly incident to religious activities in Cuba. All persons subject to U.S. jurisdiction, including religious organizations located in the United States and members and staff of such organizations, are generally authorized to engage in travel-related transactions that are directly incident to engaging in religious activities in Cuba provided, among other things, that the travel must be for the purpose of engaging in a program of religious activities. In accordance with NSPM-5, OFAC amended this general license to exclude from the authorization direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List. Also, and effective September 24, 2020, OFAC amended this general license to exclude from the authorization lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. The traveler’s schedule of activities must not include free time or recreation in excess of that consistent with a full-time schedule in Cuba. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.566. [09-23-2020]


706. What constitutes generally authorized travel under the travel-related category of “public performances, clinics, workshops, athletic and other competitions, and exhibitions” ?

Section 515.567(a) of the CACR contains a general license that authorizes, subject to conditions, travel-related transactions and other transactions that are directly incident to organization of and participation in amateur and semi-professional international sports federation competitions. Transactions incident to the organization of such competitions include marketing related to those specific events in Cuba.  

Effective September 24, 2020, OFAC amended section 515.567 to remove a general authorization related to public performances, clinics, workshops, other athletic or non-athletic competitions, and exhibitions previously found at § 515.567(b). OFAC will consider issuing specific licenses, on a case-by-case basis, for travel-related transactions and other transactions that are directly incident to participation in or organization of a public performance, clinic, workshop, athletic competition not covered by the general license in § 515.567(a), non-athletic competition, or exhibition in Cuba, subject to certain conditions. As a result of these amendments, effective September 24, 2020, the only remaining general license in Section 515.567 for participation in and organization of athletic competitions in Cuba will be the general license in § 515.567(a) for athletic competitions by amateur or semi-professional athletes or athletic teams.

In accordance with NSPM-5, OFAC amended this general license to exclude from the authorization direct financial transactions with entities and subentities identified on the Cuba Restricted List. Also effective September 24, 2020, OFAC amended this general license to exclude from the authorization lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.567. [09-23-2020]
 


707. What constitutes “support for the Cuban people” for generally authorized travel and other transactions?

Section 515.574 of the CACR contains a general license that authorizes, subject to conditions, travel-related transactions and other transactions that are intended to provide support for the Cuban people, which include activities of recognized human rights organizations; independent organizations designed to promote a rapid, peaceful transition to democracy; and individuals and non-governmental organizations that promote independent activity intended to strengthen civil society in Cuba. In accordance with NSPM-5, OFAC amended this general license on November 8, 2017 to require that each traveler utilizing this authorization engage in a full-time schedule of activities that enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities and that result in meaningful interactions with individuals in Cuba. OFAC also amended this general license to exclude from the authorization certain direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List. Also, and effective September 24, 2020, OFAC amended this general license to exclude from the authorization lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. The traveler’s schedule of activities must not include free time or recreation in excess of that consistent with a full-time schedule in Cuba. An entire group does not qualify for this general license merely because some members of the group qualify individually. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.574. [09-23-2020]


708. What constitutes “humanitarian projects” for generally authorized transactions, including travel-related transactions?

Section 515.575 of the CACR contains a general license that authorizes, subject to conditions, transactions, including travel-related transactions, that are related to humanitarian projects in or related to Cuba. These authorized humanitarian projects are: medical and health-related projects; construction projects intended to benefit legitimately independent civil society groups; disaster preparedness, relief, and response; historical preservation; environmental projects; projects involving formal or non-formal educational training, within Cuba or off-island, on the following topics: entrepreneurship and business, civil education, journalism, advocacy and organizing, adult literacy, or vocational skills; community-based grassroots projects; projects suitable to the development of small- scale private enterprise; projects that are related to agricultural and rural development that promote independent activity; microfinancing projects, except for loans, extensions of credit, or other financing prohibited by 31 CFR § 515.208; and projects to meet basic human needs. Also, and effective September 24, 2020, OFAC amended this general license to exclude from the authorization lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. For persons traveling pursuant to this authorization, the traveler’s schedule of activities must not include free time or recreation in excess of that consistent with a full-time schedule in Cuba. An entire group does not qualify for this general license merely because some members of the group qualify individually. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.575. [09-23-2020]


709. What constitutes “activities of private foundations or research or educational institutes” for generally authorized travel?

Section 515.576 of the CACR contains a general license that authorizes, subject to conditions, travel- related transactions and other transactions that are directly incident to activities by private foundations or research or educational institutes with an established interest in international relations to collect information related to Cuba for noncommercial purposes, among other things. In accordance with NSPM-5, OFAC amended this general license to exclude from the authorization direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List Also, and effective September 24, 2020, OFAC amended this general license to exclude from the authorization lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210.

The traveler’s schedule of activities must not include free time or recreation in excess of that consistent with a full-time schedule in Cuba. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.576.

Additionally, 31 CFR § 515.573(d) authorizes private foundations or research or educational institutes engaging in transactions authorized by § 515.576 to establish a physical presence in Cuba, such as an office. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.573(a). [09-23-2020]


710. What constitutes “exportation, importation, or transmission of information or informational materials” for generally authorized travel?

The general license at 31 CFR § 515.545(b)(1) authorizes, subject to conditions, travel-related transactions and other transactions that are directly incident to the exportation, importation, or transmission of information or informational materials. In accordance with NSPM-5, OFAC amended this general license to exclude from the authorization direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List. Also, and effective September 24, 2020, OFAC amended this general license to exclude from the authorization lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. The traveler’s schedule of activities must not include free time or recreation in excess of that consistent with a full- time schedule in Cuba. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.545(b)(1).

The general license at 31 CFR §515.545(b)(2) authorizes, subject to conditions, travel-related transactions and other transactions that are directly incident to professional media or artistic productions of information or informational materials for exportation, importation, or transmission, including the filming or production of media programs (such as movies and television programs), the recording of music, and the creation of artworks in Cuba, provided that the traveler is regularly employed in or has demonstrated professional experience in a field relevant to such professional media or artistic productions. In accordance with NSPM-5, OFAC amended this general license to exclude from the authorization direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List. Also, and effective September 24, 2020, OFAC amended this general license to exclude from the authorization lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. The traveler’s schedule of activities must not include free time or recreation in excess of that consistent with a full-time schedule. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.545(b)(2).

The definition of “information and informational materials” may be found at 31 CFR § 515.332. [09-23-2020]


711. What are examples of a full-time schedule of activities for authorized travelers?

Authorized travelers to Cuba pursuant to most general license categories are expected to maintain a full-time schedule of activities consistent with the terms of the general license(s) pursuant to which they are traveling. For example:

  •     An individual traveling to Cuba for four days pursuant to the authorization for professional research (31 CFR § 515.564(a)), such as a professional  architect, could conduct two days of research on Cuban architectural heritage that directly relates to the traveler’s profession, followed by one day of meetings with Cuban nationals engaging in historical preservation of colonial and baroque buildings in Havana. The following day the traveler could engage in a full day of site visits and fact-finding around Havana at key architectural sites.
  •     An individual traveling pursuant to the authorization for journalistic activities could engage in three full days of interviews with local residents, followed by one full day of follow-up investigative research at local institutions.
  •     A group of friends traveling to Cuba could maintain a full-time schedule volunteering with a recognized non-governmental organization to build a school for underserved Cuban children with the local community (31 CFR § 515.574). The travelers would need to ensure that their activities promote independent activity intended to strengthen civil society in Cuba and that they engage in a full-time schedule of activities that enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities, and result in meaningful interaction between the travelers and individuals in Cuba. [09-23-2020]
     

712. Can I purchase a ticket to Cuba directly from an airline based or operating out of the United States?

Yes, provided that you are authorized to travel to Cuba pursuant to an OFAC general or specific license. Airlines and travelers are responsible for maintaining records of their Cuba-related transactions for at least five years. [11-08-2017]


713. May a person that qualifies for the general license to provide carrier services transport a third-country national located in the United States to Cuba for travel authorized by a general license under one of the 12 categories of travel listed in Section 515.560 or by specific license from OFAC?

Yes. [11-08-2017]


714. May an individual authorized traveler take a commercial passenger ferry or use his or her private boat to travel to Cuba?

The export or reexport to Cuba of items subject to the EAR, including commercial vessels used to provide carrier services and private vessels, requires separate authorization from the Department of Commerce. See 31 CFR § 515.533. For a complete description of BIS s regulatory requirements, see BIS s Cuba webpage.

While 31 CFR § 515.572 generally authorizes the provision of carrier services, OFAC amended its regulations effective June 5, 2019 to highlight the separate BIS requirements. For a complete description of what the OFAC general license authorizes and the restrictions that apply, see 31 CFR § 515.572. [09-06-2019]


715. Are U.S. vessels, including commercial passenger ferries or private boats, permitted to carry passengers to or from Cuba?

The export or reexport to Cuba of items subject to the EAR, including commercial vessels used to provide carrier services and private vessels, requires separate authorization from the Department of Commerce. See 31 CFR § 515.533. For a complete description of BIS s regulatory requirements, see BIS s Cuba webpage.

While 31 CFR § 515.572 generally authorizes the provision of carrier services, and 31 CFR § 515.572(a)(4) generally authorizes the provision of lodging services by persons subject to U.S. jurisdiction who are authorized to provide carrier services, OFAC amended its regulations effective June 5, 2019 to highlight the BIS requirements. For a complete description of what the OFAC general license authorizes and the restrictions that apply, see 31 CFR § 515.572. [09-06-2019]


716. Are authorized U.S. travelers permitted to travel onboard vessels in Cuba to meet their transportation needs within Cuba?

Travel onboard a vessel in Cuba is permitted for authorized travel. [11-08-2017]


717. Are there any spending limits for authorized U.S. travelers while in Cuba?

There is no specific dollar limit on authorized expenses; however, in accordance with National Security Presidential Memorandum-5 on Strengthening the Policy of the United States Toward Cuba, OFAC amended the Cuban Assets Control Regulations to restrict persons subject to U.S. jurisdiction from engaging in direct financial transactions with entities or subentities identified on the State Department’s Cuba Restricted List, with certain exceptions. See 31 CFR §§ 515.209 and 515.421. Consistent with these authorizations and restrictions, authorized travelers may engage in transactions ordinarily incident to travel within Cuba, including payment of living expenses and the acquisition in Cuba of goods for personal consumption there. OFAC amended 31 CFR § 515.421 to exclude from the authorization lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the State Department’s Cuba Prohibited Accommodations List to the extent prohibited by 31 CFR § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. In addition, travelers are authorized to acquire in Cuba and import as accompanied baggage into the United States merchandise for personal use only; effective September 24, 2020, this authorization excludes imports into the United States of Cuban-origin alcohol or tobacco products. OFAC considers “personal use” of an imported item to include giving the item to another individual as a personal gift, but not the transfer of the item to another person for payment or other consideration. Value imports remain subject to the normal limits on duty and tax exemptions for merchandise imported as accompanied baggage and for personal use. [10-26-2020]


718. Are there any CACR restrictions on what foreign persons entering the United States from travel that included Cuba may bring in their accompanied baggage?

A non-U.S. person (i.e., not a U.S. citizen or resident) arriving in the United States is authorized to import Cuban-origin merchandise as accompanied baggage provided the merchandise is not in commercial quantities, is not imported for resale, and does not include Cuban-origin alcohol or tobacco products.  See 31 CFR § 515.569. [09-23-2020]


719. Can I purchase Cuban-origin cigars and/or Cuban-origin rum or other alcohol while traveling in Cuba?

Persons authorized to travel to Cuba may purchase alcohol and tobacco products while in Cuba for personal consumption in Cuba. Please note that effective September 24, 2020, authorized travelers may no longer return to the United States with alcohol and/or tobacco products acquired in Cuba as accompanied baggage for personal use. [09-23-2020]


720. Can I purchase Cuban-origin cigars and/or Cuban-origin rum or other Cuban-origin alcohol while in a third country (i.e. not Cuba)?

Persons subject to U.S. jurisdiction may purchase or acquire Cuban-origin merchandise, including alcohol and tobacco products, while in a third country for personal consumption outside the United States. Please note that effective September 24, 2020, authorized travelers may no longer import such products into the United States.  For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.585(c) and (d). [09-23-2020]


721. As an authorized traveler, may I travel from a third country to Cuba and from Cuba to a third country?

Yes, a person subject to U.S. jurisdiction engaging in authorized travel-related transactions may travel to Cuba from a third country or to a third country from Cuba. Persons subject to U.S. jurisdiction traveling to and from Cuba via a third country may only do so if their travel-related transactions are authorized by a general or specific license issued by OFAC, and such travelers are subject to the same restrictions and requirements as persons traveling directly from the United States. [11-08-2017]


722. May crew or other personnel involved in the operation of aircraft transporting authorized travelers to Cuba remain in Cuba along with the aircraft?

The general license authorizing travel-related transactions incident to the exportation or reexportation of authorized goods includes travel-related and such other transactions directly incident to the facilitation of the temporary sojourn of aircraft authorized by the Department of Commerce for travel between the United States and Cuba and that are transporting other authorized travelers. This authorization includes travel-related transactions by persons subject to U.S. jurisdiction who are required for normal operation and service on board an aircraft or who are required to provide services to an aircraft on the ground. Travel-related transactions by such persons must be limited to the duration and scope of their duties in relation to the particular authorized temporary sojourn. For a complete description of what the OFAC general license authorizes and the restrictions that apply, see 31 CFR § 515.533(c)(2).

For a complete description of BIS s regulatory requirements, see BIS s Cuba webpage. [09-06-2019].


Travel and Carrier Services


723. Do air carriers or vessel operators need to obtain specific licenses from OFAC to provide services?

No. A general license authorizes persons subject to U.S. jurisdiction to provide carrier services by vessel or aircraft to, from, or within Cuba, in connection with authorized travel, without the need for a specific license from OFAC. For a complete description of what the OFAC general license authorizes and the restrictions that apply, see 31 CFR § 515.572(a)(2).

However, while no additional license is required from OFAC, the export or reexport of certain vessels or aircraft providing carrier services under § 515.572(a)(2) requires separate authorization from BIS. For a complete description of BIS s regulatory requirements, see BIS s Cuba webpage.

In addition, persons providing carrier services may still need to secure regulatory approvals from other concerned U.S. government agencies, including the Department of Transportation s Office of the Secretary and the Federal Aviation Administration, and the Department of Homeland Security. [06-04-2019]


724. Do travel service providers (such as travel agents and tour group operators) need to obtain specific licenses from OFAC to provide services for travel to Cuba?

No. A general license authorizes persons subject to U.S. jurisdiction, including travel agents and tour group operators, to provide travel services in connection with authorized travel without the need for specific licenses from OFAC. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.572(a)(1). In accordance with NSPM-5, OFAC amended this general license to exclude from the authorization certain direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List. Also, effective September 24, 2020, OFAC amended this general license to exclude from the authorization lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. The provision of services related to travel for tourist activities or other unauthorized travel to Cuba remains prohibited. [09-23-2020]


725. May persons subject to U.S. jurisdiction providing carrier services to authorized travelers between the United States and Cuba provide such services via a third country?

Persons subject to U.S. jurisdiction are authorized to provide carrier services either directly or indirectly between the United States and Cuba for authorized travelers, provided that they hold any additional authorizations required by other U.S. government agencies. For a complete description of what the OFAC general license authorizes and the restrictions that apply, see 31 CFR § 515.572(a)(2).

The export or reexport of vessels or aircraft providing carrier services under 31 CFR § 515.572(a)(2) requires separate authorization from BIS. For a complete description of BIS s regulatory requirements, see BIS s Cuba webpage. [09-06-2019]


726. In the case of a customer traveling to or from Cuba under a specific license, may providers of carrier and travel services collect and retain on file the specific license number in lieu of a physical or electronic copy of the license?

Yes. OFAC allows persons subject to U.S. jurisdiction providing authorized carrier or travel services to a customer traveling under a specific license to maintain either the specific license number or a copy of the license on file. See 31 CFR § 515.572(b)(1) Persons subject to U.S. jurisdiction providing authorized carrier or travel services that choose to collect the specific license number in lieu of the license must maintain a record of that number, as well as the other required information set forth in § 515.572(b), for at least five years. [09-06-2019]


727. Are carrier and travel service providers required to verify that an individual traveler is authorized to travel to Cuba?

Persons subject to U.S. jurisdiction providing authorized carrier or travel services must retain for at least five years from the date of the transaction a certification from each customer indicating the provision of the CACR that authorizes the person to travel to Cuba. In the case of a customer traveling under a specific license, a copy of the license or the license number must be maintained on file. The names and addresses of individual travelers must also be maintained on file for at least five years. See 31 CFR § 515.572(b). This information, including certifications and copies of licenses or license numbers, may be collected and maintained in any form, including electronically. [06-04-2019]


728. What types of arrangements may airlines enter into with a Cuban national (individual or entity) to facilitate the provision of carrier services between the United States and Cuba?

The entry into blocked space, code-sharing, or leasing agreements to facilitate the provision of carrier services by air is authorized. For a complete description of what the OFAC general license authorizes and the restrictions that apply, see 31 CFR § 515.572(a)(2)(ii). Transactions, including the remittance of payments, ordinarily incident to such arrangements are also authorized (see 31 CFR § 515.421). Further, OFAC amended this general license to exclude from the authorization lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the State Department’s Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. Certain transactions ordinarily incident to such arrangements are also authorized (see 31 CFR § 515.421 for additional information and restrictions). [10-26-2020]


729. Which individuals may be transported between the United States and Cuba by a person that qualifies for the general license to provide carrier services?

  •     Persons subject to U.S. jurisdiction who are traveling to or from Cuba pursuant to a general license under one of the 12 categories of travel listed in section 515.560 of CACR, 31 CFR part 515 (CACR), or under a specific license from OFAC may be transported between the United States and Cuba.
  •     Cuban nationals applying for admission to the United States, as well as third-country nationals, with a valid visa or other travel authorization issued by the U.S. government may be transported to the United States from Cuba. (This includes individuals eligible to enter the United States under the Visa Waiver Program (VWP), as administered through the Electronic System for Travel Authorization (ESTA).)
  •     Cuban nationals present in the United States in a non-immigrant status or pursuant to other  non-immigrant travel authorization issued by the U.S. government may be transported from the United States to Cuba. Cuban nationals who have taken up residence in the United States and are licensed as unblocked nationals pursuant to 31 CFR § 515.505(a)(1) are persons subject to U.S. jurisdiction and may be transported between the United States and Cuba if they meet the criteria set out in the first bullet above.
  • An individual, including a foreign national, who is traveling on official business of the U.S. government, a foreign government, or an intergovernmental organization of which the United States is a member or in which the United States holds observer status — including an employee, contractor, or grantee of such government or intergovernmental organization and any individual traveling on a diplomatic passport, as well as any close relative, as defined in 31 CFR § 515.339, accompanying the traveler — may be transported between the United States and Cuba.

Section 515.572 of the CACR authorizes persons subject to U.S. jurisdiction to provide carrier services to, from, or within Cuba, in connection with travel and transportation of individuals between the United States and Cuba, directly or indirectly, authorized pursuant to the CACR. BIS regulates the temporary sojourn to Cuba of both aircraft and vessels, which in some cases is authorized by License Exception Aircraft, Vessels and Spacecraft (AVS) but may require separate authorization by BIS. Persons engaging in carrier services may require additional authorizations by other U.S. government agencies. Persons subject to U.S. jurisdiction providing travel or carrier services are required to retain for at least five years from the date of the transaction a certification from each customer indicating the section of the CACR, or a copy of the specific license or the specific license number, that authorizes the person to travel to Cuba. Certifications may be collected and maintained in any form, including electronically, and must be retained for at least five years from the date of the transaction. [10-14-2016]


730. What type of cargo may a person authorized to provide carrier services transport from the United States to Cuba?

Section 515.533 of the CACR authorizes all transactions ordinarily incident to the export to Cuba of items licensed or otherwise authorized by BIS. Accordingly, a person providing carrier services for authorized travelers going from the United States to Cuba may transport cargo and baggage accompanying an authorized traveler provided that the export of the cargo and baggage is authorized by BIS. Additionally, a person providing carrier services for authorized travelers going from the United States to Cuba may transport other cargo or unaccompanied baggage whose export to Cuba is authorized by BIS.

The exportation of information and informational materials, as defined in section 515.332 of the CACR, to Cuba from the United States is exempt from the prohibitions of the CACR. [10-14-2016]


731. What type of cargo may a person authorized to provide carrier services transport from Cuba to the United States?

Under the CACR, an authorized traveler departing Cuba for the United States may carry as accompanied baggage:

•    For persons subject to U.S. jurisdiction, Cuban-origin items for personal use only, as authorized by 31 CFR § 515.560(c) (3). Please note that, as of September 24, 2020, this authorization no longer applies to Cuban-origin alcohol or tobacco products.
•    For foreign nationals, Cuban-origin items, provided that such goods are not in commercial quantities, are not imported for resale, and do not include Cuban-origin alcohol or tobacco products as authorized by 31 CFR § 515.569. 
•    For all travelers, goods produced by Cuban entrepreneurs as authorized by 31 CFR     § 515.582 and the State Department’s Section 515.582 List (available at www.state.gov/cuba-sanctions).
•    For a traveler who left the United States for Cuba and is now returning to the United States, any items the traveler temporarily exported to Cuba pursuant to a BIS authorization.
 
Additionally, persons authorized to provide carrier services may transport from Cuba to the United States cargo, other than accompanied baggage, the importation of which has been authorized by general or specific license from OFAC, subject to obtaining any additional authorization(s) that may be required by any other relevant U.S. government agency.

The importation of Cuban-origin information and informational materials, as defined in section 515.332 of the CACR, is exempt from the prohibitions of the CACR. Imports authorized by OFAC would still be subject to other U.S. laws, such as import duties. [09-23-2020]


Remittances


732. What types of remittances are allowed to be made by persons subject to U.S. jurisdiction to persons in Cuba? What are the applicable conditions and requirements?

OFAC currently authorizes a number of categories of remittances from persons subject to U.S. jurisdiction to persons in Cuba. The September 9, 2019 rule amended certain general licenses related to specific remittance categories, including family remittances. The September 9, 2019 rule also eliminated the general license for donative remittances that was previously located at 31 CFR § 515.570(b).

Family remittances. Effective October 9, 2019, OFAC placed a cap on family remittances of $1,000 in any consecutive three-month period. Accordingly, persons subject to U.S. jurisdiction are authorized to make remittances to nationals of Cuba who are close relatives of the remitter, provided that the remitter’s total family remittances to any one Cuban national do not exceed $1,000 in any consecutive three-month period. In addition, the recipient may not be a prohibited official of the Government of Cuba, as defined in § 515.337 or a prohibited member of the Cuban Communist Party, as defined in § 515.338, or a close relative of such persons, as defined in § 515.339. See 31 CFR § 515.570(a) for additional applicable conditions.

Remittances to certain individuals and independent non-governmental organizations in Cuba. Effective October 9, 2019, OFAC amended the general license that authorizes remittances to certain individuals and independent non-governmental organizations in Cuba to further authorize remittances that encourage the development and operation of private businesses by self-employed individuals. Section 515.340 of the Cuban Assets Control Regulations defines “self-employed individual” to mean a Cuban national who satisfies one or more of the following conditions: (a) is an owner or employee of a small private business or a sole proprietorship, including restaurants (paladares), taxis, and bed-and-breakfasts (casas particulares); (b) is an independent contractor or consultant; (c) is a small farmer who owns his or her own land; or (d) is a small usufruct farmer who cultivates state-owned land to sell products on the open market. Persons subject to U.S. jurisdiction are authorized to make remittances to individuals and independent non-governmental entities in Cuba, including pro-democracy groups and civil society groups, and to members of such groups or organizations, to support: humanitarian projects in or related to Cuba that are designed to directly benefit the Cuban people and the Cuban people through activities of recognized human rights organizations, independent organizations designed to promote a rapid, peaceful transition to democracy, and activities of individuals and non-governmental organizations that promote independent activity intended to strengthen civil society. See 31 CFR § 515.570(g) for additional applicable conditions.

Also, effective October 9, 2019, OFAC removed the general license that authorized persons subject to U.S. jurisdiction to make donative remittances to persons in Cuba, and such remittances are no longer authorized. Finally, effective November 26, 2020, OFAC amended 31 CFR § 515.570 to exclude from the scope of the authorization any transaction relating to the collection, forwarding, or receipt of remittances involving any entity or subentity identified on the State Department’s Cuba Restricted List.

See 31 CFR § 515.570 for a complete description of what the OFAC general licenses related to remittances authorize and the restrictions that apply, as well as statements of specific licensing policy.

For remittances from Cuban nationals to persons subject to U.S. jurisdiction, see 31 CFR § 515.587. Please also note that, effective November 26, 2020, OFAC amended 31 CFR § 515.587 to exclude from the scope of the authorization any transaction relating to the collection, forwarding, or receipt of remittances involving any entity or subentity identified on the State Department’s Cuba Restricted List. [10-26-2020]


733. Is a bank, credit union, or money services business (MSB) such as a money remitter permitted to process my authorized remittances to or from Cuba?

Yes. Pursuant to a general license at 31 CFR § 515.572(a)(3), banking institutions, as defined in 31 CFR § 515.314, U.S.-registered brokers or dealers in securities, and U.S.-registered money transmitters are permitted to process authorized remittances to or from Cuba without having to obtain a specific license, subject to the recordkeeping and reporting requirements set forth in 31 C.F.R § 515.572(b). Please note, effective November 26, 2020, OFAC amended 31 CFR § 515.572(a)(3) to exclude from the scope of the authorization any transaction relating to the collection, forwarding, or receipt of remittances involving any entity or subentity identified on the State Department’s Cuba Restricted List. For a complete description of what the OFAC general license authorizes and the restrictions that apply, see 31 CFR § 515.572(a)(3). [10-26-2020]


Banking


734. What is the Cuba Restricted List and how does it impact Cuba-related transactions?

In accordance with National Security Presidential Memorandum-5 on Strengthening the Policy of the United States Toward Cuba (NSPM-5) , the State Department publishes a list of entities and subentities that are under the control of, or act for or on behalf of, the Cuban military, intelligence, or security services or personnel, and with which direct financial transactions would disproportionately benefit the Cuban military, intelligence, or security services or personnel at the expense of the Cuban people or private enterprise in Cuba. This list is called the Cuba Restricted List, and is available on the State Department’s website at https://www.state.gov/cuba-sanctions/cuba-restricted-list/. In accordance with NSPM-5, OFAC maintains a prohibition to restrict direct financial transactions with entities and subentities on the Cuba Restricted List. For a complete description of the scope of the prohibition on direct financial transactions and the restrictions and exceptions that apply, see 31 CFR § 515.209. This prohibition applies to the following general licenses: §§ 515.530, 515.534, 515.545, 515.560, 515.561,515.564, 515.565, 515.566, 515.567, 515.572, 515.573, 515.574, 515.576, 515.577, 515.578, 515.581,515.584, and 515.590. For a complete description of what each general license authorizes and the restrictions that apply, see the aforementioned general licenses.

In addition, on October 27, 2020, OFAC also amended the Cuban Assets Control Regulations (CACR) to exclude from the scope of certain remittance-related general licenses any transactions relating to the collection, forwarding, or receipt of remittances involving any entity or subentity identified on the State Department’s Cuba Restricted List (CRL), effective November 26, 2020. This restriction is distinct from the prohibition in § 515.209, which, for example, contains certain exceptions for pre-existing commercial engagements with CRL entities or subentities. See Note 2 to § 515.209, reinforcing this distinction. Specifically, OFAC’s October 27, 2020 rule removes from the scope of certain general licenses any transaction relating to the collection, forwarding, or receipt of remittances involving any entity or subentity on the CRL, regardless of the existence of any pre-existing commercial engagements. Persons subject to U.S. jurisdiction may use the 30 days before the rule becomes effective to wind down those engagements and make alternative arrangements.

Section 515.421 of the CACR contains an interpretive provision for incidental transactions where OFAC has clarified that authorized transactions ordinarily incident to licensed transactions and necessary to give effect thereto exclude direct financial transactions with such entities or subentities if the terms of the applicable general or specific license expressly exclude such direct financial transactions. OFAC also amended 31 CFR § 515.421 to make clear that a transaction relating to the collection, forwarding, or receipt of remittances involving any entity or subentity identified on the CRL is not authorized as an ordinarily incident transaction where the terms of the general or specific license expressly exclude any such transactions. For a complete description of the scope of the interpretive provision and the restrictions and exceptions that apply, see 31 CFR § 515.421. [10-26-2020]


735. What are examples of direct financial transactions with an entity or subentity on the State Department’s Cuba Restricted List prohibited by 31 CFR § 515.209?

A person subject to U.S. jurisdiction traveling to Cuba to engage in an authorized family visit pursuant to 31 CFR § 515.561 is prohibited from engaging in direct financial transactions with the entities and subentities on the State Department’s Cuba Restricted List. As such, this traveler would not be authorized to book a hotel room directly with a hotel included on the Cuba Restricted List.  

An individual working for a church subject to U.S. jurisdiction interested in establishing a physical presence in Cuba pursuant to 31 CFR § 515.573(d)(3) is prohibited from engaging in direct financial transactions with the entities and subentities on the State Department’s Cuba Restricted List. As such, this traveler would not be able to sign a new contract directly with a real estate company on the Cuba Restricted List to rent a location for the church’s physical presence.    [11-08-2017]


736. May the U.S. dollar be used to conduct transactions in Cuba or with Cuban nationals?

In certain circumstances, yes. Persons subject to U.S. jurisdiction may engage in transactions in U.S. dollars in Cuba or with Cuban nationals with respect to activity that is authorized pursuant to the CACR. For example, payments for telecommunications services in Cuba provided pursuant to 31 CFR § 515.542 may be made in U.S. dollars. Further, the use of U.S. dollars for transactions that are exempt from the prohibitions of or not otherwise prohibited by the CACR is also authorized. For example, payments related to the importation or exportation of informational materials as defined in 31 CFR § 515.332, such as books or musical recordings, may be made in U.S. dollars.

The September 9, 2019 amendment to the CACR eliminates the authorization for banking institutions subject to U.S. jurisdiction to process “U-turn” transactions in 31 CFR § 515.584(d). In addition, the amendment replaces the “U-turn” authorization with an authorization to reject such transactions. For more on changes to the “U-turn” general license, please see  FAQ 757. [09-06-2019]


737. Are authorized travelers permitted to open bank accounts in Cuba?

Yes. Persons subject to U.S. jurisdiction who are traveling to Cuba pursuant to one of the 12 authorized categories of travel may open and maintain bank accounts in order to access funds while located in Cuba for authorized transactions, and are authorized to close such accounts. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.560(c)(6). In accordance with NSPM-5, OFAC amended this general license to exclude from the authorization certain direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List. For a description of the scope of the prohibition on direct financial transactions and the restrictions and exceptions that apply, see 31 CFR § 515.209.  [09-06-2019]


738. Are authorized travelers in Cuba permitted to use credit or debit cards issued by a U.S. financial institution?

Yes. Authorized travelers in Cuba are permitted to use credit or debit cards issued by a U.S. financial institution with respect to activity that is authorized pursuant to the CACR. Travelers are advised to check with their financial institution before traveling to Cuba to determine whether the institution has established the necessary mechanisms for its issued credit or debit cards to be used in Cuba. See 31 CFR § 515.560(c)(5) and 515.584(c). [11-08-2017]


739. Can my bank refuse to allow me to use my credit or debit card in Cuba?

OFAC regulations do not require financial institutions or credit card companies to accept, maintain, or facilitate authorized financial relationships or transactions. [11-08-2017]


740. Can credit card network operators that are persons subject to U.S. jurisdiction process credit and debit card transactions for individuals traveling to, from, or within Cuba, and related settlements, for third-country financial institutions?

Yes, credit card network operators that are persons subject to U.S. jurisdiction may process such transactions and related settlements for third-country financial institutions. Section 515.584(c) of the CACR authorizes all transactions incident to the processing and payment of credit and debit cards transactions for third-country nationals traveling to, from, or within Cuba. [11-08-2017]


741. Can credit card network operators that are persons subject to U.S. jurisdiction process credit and debit card transactions for individuals traveling to, from, or within Cuba, and related settlements, for third-country financial institutions?

Yes, credit card network operators that are persons subject to U.S. jurisdiction may process such transactions and related settlements for third-country financial institutions. Section 515.584(c) of the CACR authorizes all transactions incident to the processing and payment of credit and debit cards transactions for third-country nationals traveling to, from, or within Cuba. [11-08-2017]


742. Are financial institutions other than banks permitted to open correspondent accounts in Cuba?

Depository institutions, as defined in 31 CFR § 515.333, which include certain financial institutions other than banks, are permitted to open correspondent accounts at banks in Cuba. See 31 CFR § 515.584(a). [11-08-2017]


743. Are Cuban banks permitted to open correspondent accounts at U.S. banks?

No. U.S. depository institutions are permitted to open correspondent accounts at Cuban banks located in Cuba and in third countries, and at foreign banks located in Cuba, but Cuban banks are not generally licensed to open such accounts at U.S. banks. See note to 31 CFR § 515.584(a). [11-08-2017]


744. May correspondent accounts authorized pursuant to 31 CFR § 515.584(a) or used for transactions authorized by 31 CFR § 515.584(g) be established and maintained in U.S. dollars?

Yes. Correspondent accounts of depository institutions (as defined in 31 CFR § 515.333) at a financial institution that is a national of Cuba authorized pursuant to § 515.584(a) may be established and maintained in U.S. dollars. Such accounts may be used only for transactions that are authorized by or exempt from the CACR. Transactions necessary to establish and maintain such correspondent accounts — such as originating, processing, and terminating authorized funds transfers in U.S. dollars — are authorized.

Additionally, correspondent accounts used for transactions authorized by 31 CFR § 515.584(g), which permits banking institutions as defined in 31 CFR § 515.314(g) that are persons subject to U.S. jurisdiction to accept, process, and give credit to U.S. dollar monetary instruments presented indirectly by a financial institution that is a national of Cuba, may be denominated in U.S. dollars.

However, financial institutions that are nationals of Cuba remain prohibited from opening correspondent accounts at a U.S. financial institution. For a complete description of what these general licenses authorize and the restrictions that apply, see 31 CFR § 515.584(a) and (g). [11-08- 2017]


745. May U.S. banks open and operate accounts for Cuban nationals lawfully present in the United States?

Banking institutions are permitted to maintain accounts for certain Cuban nationals present in the United States in a non-immigrant status or pursuant to other non-immigrant travel authorization. Although the account may remain open while the Cuban national is not in the United States, access to such accounts must be limited to while the Cuban national is lawfully present in the United States. For a complete description of what the OFAC general license authorizes and the restrictions that apply, see 31 CFR § 515.571(a)(5). A Cuban national in Cuba would not be able to access such an account to make and receive certain payments pursuant to the authorization in 31 CFR § 515.584(h); separate accounts would be required to utilize each of these authorizations. [09-06-2019]


746. Can Cuban nationals lawfully present in a non-immigrant status or pursuant to another non-immigrant travel authorization issued by the U.S. government earn a salary?

Cuban nationals lawfully present in the United States in a non-immigrant status or pursuant to another non-immigrant travel authorization issued by the U.S. government may receive any salary or other compensation consistent with the individual s non-immigrant status or applicable non-immigrant travel authorization provided that the recipient is not subject to any special tax assessment by the Cuban government in connection with the receipt of such salary or other compensation. For a complete description of what the OFAC general license authorizes and the restrictions that apply, see 31 CFR § 515.571. [09-06-2019]


747. May U.S. banks, their foreign branches, and foreign subsidiaries open and operate accounts for Cuban nationals in third countries?

Section 515.585 of the CACR contains a general license that authorizes all persons subject to U.S. jurisdiction to provide goods and services to Cuban national individuals located in a third country, provided that the transaction does not involve commercial exportation to or from Cuba. Additionally, the general license authorizes banking institutions to open, maintain, and close bank accounts for such Cuban nationals, provided that such accounts are used only while the Cuban national is located outside of Cuba and may not be used for transactions that involve a commercial exportation of goods or services to or from Cuba. For a complete description of what the OFAC general license authorizes and the restrictions that apply, see 31 CFR § 515.585. [09-06-2019]


748. May U.S. banks open and operate accounts for Cuban nationals present in Cuba?

Section 515.584(h) of the CACR contains a general license that allows banking institutions to open and maintain bank accounts in the United States for Cuban nationals in Cuba to receive payments in the United States for transactions authorized pursuant to, or exempt from the prohibitions of, the CACR and to remit such payments back to Cuba. For example, an author who is a Cuban national located in Cuba may open an account with a bank or online payment platform in the United States to receive payments for sales of her book. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.584(h). [09-06-2019]


749. In what ways can Cuban nationals lawfully present in the United States participate in the U.S. financial system?

Certain Cuban nationals who have taken up residence in the United States on a permanent basis and who meet the requirements set forth in 31 CFR § 515.505(a) are licensed as unblocked nationals, and may participate fully in the U.S. financial system. See 31 CFR §§ 515.505(a)(1) and (d).

Pursuant to 31 CFR § 515.571, Cuban nationals who are present in the United States in a non-immigrant status or pursuant to other non-immigrant travel authorization issued by the U.S. government, such as a non-immigrant visa, may open and maintain bank accounts in the United States, provided that the Cuban-national account holder may only access the account while lawfully present in the United States. Section 515.571 also authorizes such Cuban nationals to engage in normal banking transactions involving foreign currency drafts, travelers checks, or other instruments negotiated incident to travel in the United States. [11-08-2017]


750. If a Cuban national resident in the United States has applied to become a lawful permanent resident alien of the United States, does that individual have to apply to OFAC to be treated as an unblocked national?

No. If a Cuban national has taken up residence in the United States and has applied to become a lawful permanent resident alien of the United States and has an adjustment of status application pending, then the Cuban national is considered unblocked and does not need to apply to OFAC to be treated as an unblocked national, provided that he or she is not a prohibited official of the Government of Cuba or a prohibited member of the Cuban Communist party. See 31 CFR § 515.505(a)(1). [11-08-2017]


751. Should financial institutions apply for a specific license to unblock funds transfers or accounts which meet the conditions for unblocking set forth in 31 CFR §§ 515.505, or 515.584 (e)?

The CACR include a general license authorizing banking institutions to unblock any account that had been previously blocked solely because of the interest therein of one or more persons now licensed as unblocked nationals. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.505(b).

The CACR also include a general license at 31 CFR § 515.584(e) that authorizes the unblocking and return of funds transfers that could have been processed pursuant to 31 CFR §§ 515.562(b) or 515.579(b), if the processing of those transfers would have been authorized by the current text of the general licenses. Funds unblocked pursuant to 31 CFR § 515.584(e) that were originally blocked on or after August 25, 1997 must be reported to OFAC. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.584.

If your situation appears to meet the requirements of these general licenses, OFAC suggests that you contact the financial institution maintaining the blocked account or blocked funds transfer to request that it review your situation within the context of the terms of the appropriate general license. If the terms of a general license apply, there is no need to seek specific license authorization from OFAC. It is OFAC s policy not to grant specific licenses authorizing transactions for which the provisions of an outstanding general license are applicable. See 31 CFR § 501.801(a). [09-06-2019]


752. Do U.S. banking institutions need to apply for a specific license to release funds transfers or accounts previously blocked pursuant to the CACR that are now authorized by general license?

If a transaction was previously blocked pursuant to the CACR at the time of the transaction, and the CACR was later amended to allow similar transactions, the earlier transaction is not unblocked unless the CACR amendments include a general license that unblocks previously blocked funds. Transactions must be authorized pursuant to the CACR at the time that they are processed. To the extent that the unblocking of a funds transfer or blocked account is not authorized by a general license, a specific license would be required to release funds transfers or unblock accounts previously blocked. [11-08-2017]


753. Is a financial institution required to independently verify that an individual s travel is authorized when processing Cuba travel-related transactions?

No. A financial institution may rely on U.S. travelers to provide their certifications of authorized travel directly to the person providing travel or carrier services when processing Cuba travel-related transactions, unless the financial institution knows or has reason to know that the travel is not authorized by a general or specific license.

The CACR requires persons subject to U.S. jurisdiction providing travel or carrier services to retain for at least five years from the date of the transaction a certification from each customer indicating the section of the CACR that authorizes the person to travel to Cuba. See 31 CFR §515.572(b). U.S. travelers utilizing a general or specific license are also required to retain for five years records associated with their travel to Cuba. [11-08-2017]


754. Is the U.S. originating bank or U.S. beneficiary bank required to independently verify that a person subject to U.S. jurisdiction is not engaging in a direct financial transaction as defined in § 515.209 when processing Cuba-related transactions?

No. To the extent the transaction involves an entity or subentity on the Cuba Restricted List, a financial institution can rely on the statements of its customer that the transaction is authorized unless it knows or has reason to know the transaction is not authorized. A financial institution is expected to do its normal due diligence with respect to a transaction involving Cuba or a Cuban national. [11-08-2017]


755. Is a U.S. or third-country financial institution required to independently verify that the underlying transactions giving rise to U.S. dollar monetary instruments presented for processing and payment pursuant to § 515.584(g) are authorized?

No. A financial institution receiving U.S. dollar monetary instruments for processing and payment directly or indirectly (in the case of a U.S. banking institution) may rely on the institution having presented such monetary instruments as confirmation that the underlying transactions are authorized, exempt, or otherwise not prohibited, unless the financial institution knows or has reason to know that the transaction is not authorized, exempt, or otherwise not prohibited. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.584(g). [11-08-2017]


756. May a person subject to U.S. jurisdiction utilize online payment platforms to facilitate or process authorized transactions involving Cuba or a Cuban entity?

Yes. Subject to certain exceptions, transactions that are ordinarily incident to an authorized transaction are permitted. See the examples in 31 CFR § 515.421. Such transactions may include use of online payment platforms to facilitate authorized transactions. Authorized transactions ordinarily incident to licensed transactions exclude direct financial transactions with Cuba Restricted List entities, as well as, effective September 24, 2020, lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210, if the terms of the applicable general or specific license expressly exclude such transactions. See 31 CFR § 515.421(5)-(6). Also, effective November 26, 2020, OFAC amended 31 CFR § 515.421 to make clear that a transaction relating to the collection, forwarding, or receipt of remittances involving any entity or subentity identified on the Cuba Restricted List is not authorized as an ordinarily incident transaction where the terms of the general or specific license expressly exclude any such transactions. For a complete description of the scope of transactions ordinarily incident to a licensed transaction and the restrictions and exceptions that apply, see 31 CFR § 515.421. [10-26-2020]


757. Are U.S. banking institutions authorized to process U-turn transactions in which Cuba or a Cuban national has an interest?

No. Effective October 9, 2019, banking institutions subject to U.S. jurisdiction are not permitted to process U-turn transactions, i.e., funds transfers originating and terminating outside the United States, where neither the originator nor the beneficiary is a person subject to U.S. jurisdiction. While banking institutions subject to U.S. jurisdiction are no longer authorized to process U-turn transactions, they are authorized to reject such transactions, subject to certain conditions (see 31 CFR § 515.584(d). [09-06-2019]


VI. Trade/Business


758. Is Cuba open for U.S. business and investment?

Persons subject to U.S. jurisdiction are prohibited from doing business or investing in Cuba unless authorized by OFAC. An OFAC general license authorizes, subject to certain conditions and limitations, the exportation from the United States, and the reexportation from third countries, of items to Cuba where the exportation or reexportation is licensed or otherwise authorized by BIS. See 31 CFR § 515.533(a). BIS currently authorizes certain categories of items to be exported or reexported to Cuba. In addition, OFAC currently generally licenses the establishment of a business presence or physical presence in Cuba for certain types of entities or persons. See 31 CFR § 515.573. In accordance with NSPM-5, OFAC amended the general licenses for the establishment of a business presence or physical presence in Cuba to exclude from the authorizations certain direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List. For a description of the scope of the prohibition on direct financial transactions and the restrictions and exceptions that apply, see 31 CFR § 515.209. [09-06-2019]


759. Does the prohibition in 31 CFR § 515.209(a) require US businesses engaged in the Cuban market and that may undertake direct financial transactions with entities included on the State Department’s Cuba Restricted List to terminate their Cuba-related business relationships pursuant to the regulatory amendments?

Consistent with the Administration’s interest in not negatively impacting U.S. businesses for engaging in lawful commercial opportunities, most existing Cuba-related commercial engagements that include direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List continue to be permitted, pursuant to 31 CFR § 515.209 (c), provided that those commercial engagements were in place prior to November 9, 2017 (or the date the entity or subentity was otherwise added to the Cuba Restricted List, as published in the Federal Register). For example, businesses will be permitted to continue with authorized transactions outlined in contingent or other types of contractual arrangements agreed to prior to the issuance of the 2017 regulations, consistent with other OFAC authorizations. However, effective November 26, 2020, persons subject to U.S. jurisdiction will no longer be authorized to engage in any transactions relating to the collection, forwarding, or receipt of remittances involving any entity or subentity identified on the State Department’s Cuba Restricted List, regardless of whether any commercial engagements with the entity or subentity were in place prior to November 9, 2017 (or the date the entity or subentity was otherwise added to the Cuba Restricted List, as published in the Federal Register). For a complete description of the scope of the prohibition on direct financial transactions and the restrictions and exceptions that apply to transactions relating to the collection, forwarding, or receipt of remittances, see 31 CFR §§ 515.209, 515.421, 515.570. 515.572(a)(3) and 515.587. [10-26-2020]


760. How do U.S. companies know if a Cuban counterpart is affiliated with an entity or subentity on the Cuba Restricted List?

The names of the entities and subentities that the State Department identifies as meeting the criteria set forth in NSPM-5 are published on the Cuba Restricted List, which is available on the State Department’s website and in the Federal Register (updates to the Cuba Restricted List will also be published in the Federal Register). Entities or subentities that are owned or controlled by another entity or subentity on the Cuba Restricted List are not treated as restricted unless also specified by name on the Cuba Restricted List. The Cuba Restricted List is maintained by the State Department on its website: https://www.state.gov/cuba-sanctions/cuba-restricted-list/. [11-08-2017]


761. Can U.S. trade delegations travel to Cuba?

Trade delegations are authorized to travel to Cuba only if each member of the delegation meets the criteria of an applicable general license authorizing travel to Cuba or has obtained a specific license from OFAC. Authorized trade delegations generally fall under one of two general licenses for travel authorization: either (1) 31 CFR § 515.533(c)(1), which authorizes travel-related and other transactions incident to the exportation of certain authorized goods from the U.S. to Cuba, specifically the conduct of “market research, commercial marketing, sales or contract negotiation, accompanied delivery, installation, leasing, servicing, or repair in Cuba of items consistent with the export or reexport licensing policy of the Commerce Department,” or (2) 31 CFR § 515.564(a), which authorizes transactions related to professional research in Cuba. Further, please note that, effective September 24, 2020, OFAC has amended both general licenses to exclude from the authorizations lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. For a complete description of what these general licenses authorize and the restrictions that apply, see 31 CFR §§ 515.533(c)(1) and 515.564(a). [09-23-2020]


762. May U.S. companies exporting authorized goods to Cuba assemble such goods in Cuba?

Persons subject to U.S. jurisdiction that are exporting or reexporting items to Cuba pursuant to an authorization from the Department of Commerce or OFAC or that are otherwise exempt may assemble such items in Cuba provided that the assembly does not involve the incorporation of Cuban-origin goods into items assembled or the processing of any raw materials into finished goods in Cuba. For a complete description of what this general license authorizes and the restrictions that apply, see the note to 31 CFR § 515.573(c)(3). [11-08-2017]


763. If an authorized export to Cuba requires servicing or repair, may a person subject to U.S. jurisdiction import the item into the United States or a third country for such servicing or repair?

Yes, provided such items were exported or reexported to Cuba pursuant to 31 CFR § 515.533(a) or 31 CFR § 515.559. For a complete description of what this general licenses authorizes and the restrictions that apply, see 31 CFR § 515.533(b). The exportation or reexportation of repaired or replacement items to Cuba must be separately authorized pursuant to 31 CFR § 515.533(a) or § 515.559, in addition to any Department of Commerce authorization that may be required. [09- 06-2019]


764. Does 31 CFR § 515.533(a) authorize foreign subsidiaries of U.S. companies to export from a third country to Cuba foreign-manufactured items that are subject to the EAR?

No. Consistent with Section 1706 of the Cuban Democracy Act of 1992, (CDA), the general license provided at 31 CFR § 515.533(a) does not authorize any transaction between a U.S.-owned or -controlled firm in a third country and Cuba for the exportation to Cuba of commodities produced in a country other than the United States or Cuba. Such transactions must be specifically licensed pursuant to 31 CFR § 515.559 in addition to any required authorization from the Department of Commerce. There are also restrictions imposed by the CDA on the types of transactions that may be licensed pursuant to that section. [11-08-2017]


765. May persons subject to U.S. jurisdiction open an office in Cuba?

Persons subject to U.S. jurisdiction may establish and maintain a physical presence, such as an office, warehouse, or retail outlet, in Cuba to engage in transactions authorized by or exempt from the CACR in the following categories: entities engaging in non-commercial activities authorized by section
515.574 (support for the Cuban people); entities engaging in humanitarian projects set forth in section 515.575(b) (humanitarian projects); private foundations or research or educational institutes engaging in transactions authorized by § 515.576; news bureaus; exporters of certain goods authorized for export or reexport pursuant to 31 CFR §§ 515.533 and 515.559; entities providing mail or parcel transmission services; providers of telecommunications or internet-based services; entities organizing or conducting certain educational activities; religious organizations; and providers of carrier and certain travel services. These persons may employ Cuban nationals in Cuba as well as persons subject to U.S. jurisdiction in Cuba (and such persons may maintain a domicile in Cuba). These persons may open and maintain bank accounts to facilitate authorized transactions. In accordance with NSPM-5, OFAC amended this general license to exclude from the authorization certain direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List.
For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.573. Persons subject to U.S. jurisdiction that do not meet the terms of the general license may apply to OFAC for a specific license. Such applications will be reviewed on a case-by- case basis. Additional authorizations from the Cuban government may also be required. [09-06-2019]


766. What types of payment or financing terms may be utilized for authorized exports and reexports of items other than agricultural commodities to Cuba?

Section 515.533(a) of the CACR does not restrict payment and financing terms for exports of items from the United States or reexports of 100 percent U.S-origin items from a third country, other than agricultural commodities. Examples of permissible payment and financing terms for authorized exports and reexports that are not agricultural commodities include: payment of cash in advance; sales on an open account; and financing by U.S. or third-country financial institutions.

OFAC has issued a general license authorizing banking institutions to provide financing for such authorized exports or reexports of items other than agricultural commodities, including issuing, advising, negotiating, paying, or confirming letters of credit (including letters of credit issued by a financial institution that is a national of Cuba), accepting collateral for issuing or confirming letters of credit, and processing documentary collections. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.584(f). In accordance with NSPM-5, OFAC amended this general license to exclude from the authorization certain direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List. For a description of the scope of the prohibition on direct financial transactions and the restrictions and exceptions that apply, see 31 CFR § 515.209. [09-06-2019]
 


767. What types of payment or financing terms may be utilized for authorized exports and reexports of agricultural commodities to Cuba?

For such exports and reexports, only the following payment and financing terms may be used: payment of cash in advance, or financing by a banking institution located in a third country, subject to certain restrictions. This limitation is required by the Trade Sanctions Reform and Export Enhancement Act of 2000, 22 U.S.C. § 7207(b)(1). See 31 CFR § 515.533(a)(4). This provision only applies to exports and reexports of “agricultural commodities,” as defined in 15 CFR part 772, and not to exports or reexports of “agricultural items” authorized pursuant to 15 CFR § 746.2(b)(2)(iv). [09- 06-2019]


768. What does the regulatory term cash in advance mean?

The regulatory interpretation of cash in advance, which describes one of the permissible payment and financing terms for authorized exports and reexports of agricultural commodities, is cash before transfer of title and control. For the full text, see 31 CFR § 515.533. [11-08-2017]


769. What types of Cuban-origin goods are authorized for importation directly into the United States?

Persons subject to U.S. jurisdiction authorized to travel to Cuba may import into the United States as accompanied baggage merchandise acquired in Cuba provided that the merchandise is for personal use only. Please note that, as of September 24, 2020, this authorization no longer applies to the import into the United States of Cuban-origin alcohol or tobacco products. See 31 CFR § 515.560. Persons subject to U.S. jurisdiction located in third countries may purchase or acquire Cuban-origin merchandise and may import such merchandise into the United States as accompanied baggage provided that the merchandise is for personal use only; however, effective September 24, 2020, this authorization excludes imports into the United States of Cuban-origin alcohol or tobacco products. See 31 CFR § 515.585. Foreign persons traveling to the United States from a third country may import into the United States as accompanied baggage Cuban-origin merchandise provided that the merchandise is not in commercial quantities, is not imported for resale, and does not include alcohol or tobacco products. See 31 CFR § 515.569. In addition, Cuban nationals who are present in the United States in a non-immigrant status or pursuant to other non-immigrant travel authorization issued by the U.S. government are no longer authorized to bring Cuban-origin alcohol or tobacco products for personal use as accompanied baggage. See 31 CFR § 515.571. Normal limits on duty and tax exemptions for merchandise imported as accompanied baggage will apply. 

Persons subject to U.S. jurisdiction are also authorized to import certain goods produced by independent Cuban entrepreneurs as determined by the State Department, as set forth in the State Department’s Section 515.582 list. If these goods are for personal use, certain personal exemptions from U.S. Customs and Border Protection may apply.

Persons subject to U.S. jurisdiction are also authorized to import Cuban-origin software, including Cuban-origin mobile applications. See 31 CFR § 515.578.

The importation into the United States of merchandise from Cuba or Cuban-origin merchandise from a third country intended as gifts is authorized, provided that the value of the merchandise is not more than $100, the merchandise is of a type and in quantities normally given as gifts between individuals, the merchandise is sent and not carried by a traveler, and the merchandise is not alcohol or tobacco products. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.544.

The importation into the United States from Cuba of information and informational materials is exempt from the prohibitions of the CACR. The definition of “information and informational materials” may be found at 31 CFR § 515.332. [09-23-2020]
 


770. What types of goods and services produced by independent Cuban entrepreneurs are authorized for importation into the United States from Cuba pursuant to 31 CFR § 515.582?

Pursuant to 31 CFR § 515.582 of the CACR, certain goods and services produced by independent Cuban entrepreneurs, as set forth in a list maintained by the State Department on its website, are authorized for importation, and persons subject to U.S. jurisdiction may engage in associated transactions necessary to import these authorized goods and services. The State Department list provides details of the goods and services authorized for importation into the U.S. from Cuba pursuant to this provision. This list references sections and chapters of the Harmonized Tariff Schedule (HTS) of the United States to indicate categories of goods that are not eligible for importation into the United States pursuant to 31 CFR § 515.582, even if such goods were produced by independent Cuban entrepreneurs; any other goods produced by independent Cuban entrepreneurs and not covered by the listed sections and chapters of the HTS may be imported, as provided in the State Department’s Section 515.582 list and subject to compliance with all other relevant requirements under state and federal law and regulations. 31 CFR § 515.582 of the CACR authorizes the importation of all services supplied by independent Cuban entrepreneurs, again, as provided in the State Department’s Section 515.582 list and subject to compliance with other requirements in state and federal law and regulations. [11-08-2017]


771. May a person subject to U.S. jurisdiction provide training to a Cuban distributor or customer on the use of goods authorized for export to Cuba by the Department of Commerce?

Yes. OFAC considers the provision of training to persons in Cuba, including to Cuban nationals, on the use of items authorized for export or reexport to Cuba by the Department of Commerce to be ordinarily incident to the export or reexport of the item and therefore authorized by 31 CFR § 515.533(a). Persons subject to U.S. jurisdiction are authorized, subject to certain conditions, to travel to Cuba to provide such training. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.533(c)(1). Please note that OFAC amended 31 CFR § 515.533 to exclude from the authorization lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. The exportation or reexportation to Cuba of technology subject to the EAR may require separate authorization from the Department of Commerce. [09-23-2020]


772. Are insurers that are persons subject to U.S. jurisdiction allowed to provide travel insurance to persons subject to U.S. jurisdiction engaged in authorized travel to Cuba?

Yes. See 31 CFR § 515.560. [11-08-2017]


773. May persons subject to U.S. jurisdiction engaged in authorized travel to Cuba obtain travel insurance from a third-country vendor?

Yes. See 31 CFR § 515.560. [11-08-2017]


774. May U.S. insurers issue policies and pay claims related to group health, life, and travel insurance on behalf of third-country nationals traveling to or within Cuba?

Yes, provided that the insurance policy is a global policy, and not specific to the third-country national’s travel to or within Cuba. Section 515.580 of the CACR authorizes persons subject to U.S. jurisdiction to issue or provide global health, life, or travel insurance policies for individuals ordinarily resident in a country outside of Cuba who travel to or within Cuba, regardless of whether the insurance policy is issued only to that individual or to a group, such as to all employees of a particular company. For instance, a U.S. insurer may pay medical claims pursuant to a group health insurance policy to or on behalf of a covered third-country national injured while traveling in Cuba. However, this provision does not authorize a person subject to U.S. jurisdiction to issue an insurance policy that is specific to travel to Cuba. A separate provision of the CACR, § 515.560, authorizes the provision of health, life, and travel insurance-related services that are specific to Cuba for authorized U.S. travelers. Also, effective September 24, 2020, OFAC amended § 515.560 to exclude from the authorization at § 515.560(c)(2) lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property in Cuba on the Cuba Prohibited Accommodations List to the extent prohibited by § 515.210. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. [09-23-2020]


775. May U.S. insurers, either directly or through third-country subsidiaries, issue policies, or pay insurance or reinsurance claims related to non-U.S. persons providing goods or services that facilitate travel by third-country nationals from a third country to Cuba?

Other than certain global health, life, or travel insurance policies for individuals authorized by 31 CFR § 515.580, absent specific authorization from OFAC, U.S. insurers and their subsidiaries are not permitted to issue policies, provide reinsurance coverage, or pay insurance or reinsurance claims related to non-U.S. persons, including entities such as foreign airlines, providing goods or services that facilitate travel by third-country nationals from a third country to Cuba.     [11-08-2017]


776. Are health, life, or travel insurance policies that are issued to a group (e.g., an employer and its employees) authorized by the CACR?

Section 515.580 of the CACR authorizes global health, life, or travel insurance policies covering individuals ordinarily resident in a country outside of Cuba traveling to Cuba. The policy may be issued to a group, such as all employees of a company. The global requirement means it cannot be specific to travel to Cuba. For example, it does not authorize an individual travel policy issued to a traveler specifically to cover a trip to Cuba. It also does not authorize issuing a policy to a non-U.S. travel agent specifically to cover its traveler clients where the travel agency is solely in the business of planning trips to Cuba. [11-08-2017]


777. May persons subject to U.S. jurisdiction provide certain insurance-related services (such as cargo or hull insurance, or reinsurance) to persons subject to U.S. jurisdiction who are engaging in authorized activity in Cuba?

Where the provision of insurance-related services is directly incident to activity authorized by general or specific license, then the provision of such services is authorized as well. For example, § 515.566 of the CACR authorizes travel and travel-related transactions directly incident to engaging in religious activities in Cuba. The provision of health insurance-, life insurance-, and travel insurance-related services to authorized travelers traveling to Cuba pursuant to § 515.566 would be authorized. For additional information, see Note 2 to 31 CFR § 515.560. As an additional example, the provision of insurance to a person subject to U.S. jurisdiction that is incident to convening authorized athletic competitions, as defined in 31 CFR § 515.567(a), would also be authorized.

Additionally, § 515.533 of the CACR authorizes transactions ordinarily incident to the exportation or reexportation to Cuba of certain goods licensed or otherwise authorized by the Department of Commerce. Transactions directly incident to the exportation or reexportation of such goods, such as the provision of cargo insurance for the transportation of the goods, are authorized by § 515.533. For additional information, see Note 1 to paragraph (a) of 31 CFR § 515.533.

Persons subject to U.S. jurisdiction, however, are prohibited from engaging in reinsurance arrangements where the underlying activity is not authorized by the CACR. For example, a person subject to U.S. jurisdiction would be prohibited from participating in a reinsurance arrangement that involved coverage for a foreign company that provides investment opportunities in Cuban state- owned businesses. [09-23-2020]


778. Does a person subject to U.S. jurisdiction require an OFAC specific license to pay an insurance claim that arises from authorized activity in Cuba if the payment involves a Cuban national?

Where the provision of insurance-related services is authorized by general license, either expressly or as a transaction ordinarily incident to a licensed transaction, this authorization extends to the payment or settlement of claims, including to a Cuban national. [11-08-2017]


779. What are the “180-day rule” and the “goods/passengers-on-board rule”?

The 180-day rule is a statutory restriction prohibiting any vessel that enters a port or place in Cuba to engage in the trade of goods or the purchase or provision of services there from entering any U.S. port for the purpose of loading or unloading freight for 180 days after leaving Cuba, unless authorized by OFAC. This restriction is applied even if a vessel has stopped in Cuba solely to purchase services unrelated to the trade of goods, such as planned ship maintenance. The 180-day rule is separate from a second statutory restriction – the goods/passengers-on-board rule – which prohibits any vessel carrying goods or passengers to or from Cuba or carrying goods in which Cuba or a Cuban national has an interest from entering a U.S. port with such goods or passengers on board, unless authorized or exempt. There are certain exceptions to these rules. For a complete description of the 180-day rule, the goods/passengers-on-board rule, and the general licenses and exemptions that apply, see 31 CFR §§ 515.206, 515.207, and 515.550. [11-08-2017]


780. Are there any exceptions to the 180-day rule and the goods/passengers-on-board rule?

Yes. OFAC has authorized by general license certain exceptions to these rules. If a vessel engages only in one or more of the following activities with Cuba, it will qualify for the general license and therefore will not be subject to the 180-day rule or the goods/passengers-on-board rule:

  • Engaging or has engaged in trade with Cuba authorized under the CACR, such as a vessel carrying goods from the United States that are licensed or otherwise authorized for export or reexport to Cuba by the U.S. Department of Commerce pursuant to the EAR;
  • Engaging or has engaged in trade with Cuba that is exempt from the prohibitions of the CACR, such as a vessel carrying exclusively informational materials;
  • Engaging or has engaged in the export or reexport from a third country to Cuba of agricultural commodities, medicine, or medical devices that, were they subject to the EAR, would be designated as EAR99;
  • Carrying or has carried persons between the United States and Cuba or within Cuba pursuant to the general license for the provision of carrier services under the CACR; or
  • A foreign vessel that has entered a port or place in Cuba while carrying students, faculty, and staff that are authorized to travel to Cuba pursuant to the general license for educational activities under the CACR.

Additionally, if a vessel’s only transactions with Cuba are the exportation to Cuba from a third country of items that, were they subject to the EAR, would be designated as EAR99 or controlled on the Commerce Control List only for anti-terrorism reasons, the vessel will not be subject to the 180- day rule.

These exceptions to the 180-day rule do not apply to a vessel that:

  • Carries for export to Cuba any additional goods that, were they subject to the EAR, would not be designated as EAR99 or controlled on the Commerce Control List only for anti-terrorism reasons;
  • Picks up any goods in Cuba, unless the transactions involving those goods are authorized by OFAC or exempt from the prohibitions of the CACR; or
  • Purchases or provides services in Cuba, other than docking, unloading, or other services associated with normal shipping transactions.

For a complete description of the 180-day rule, the goods/passengers-on-board rule, and the general licenses and exemptions that apply, see 31 CFR §§ 515.206, 515.207, and 515.550. [09-06-2019]
 


781. Do the exceptions to the 180-day rule authorize shipments to or from Cuba?

No. The general licenses involving the 180-day rule only authorize certain vessels to enter a U.S. port within 180 days after leaving a port or place in Cuba; they do not authorize any shipments to or from Cuba. Shipments to or from Cuba may be separately authorized under other provisions of the CACR or, as in the case of most shipments from third countries to Cuba, may simply not be subject to the restrictions of the CACR, though other U.S. government agency restrictions may apply. For a complete description of the 180-day rule and the general licenses and exemptions that apply, see 31 CFR §§ 515.206, 515.207(a), and 515.550. [11-08-2017]


782. If a foreign vessel is traveling to the United States via Cuba with cargo destined for the United States, may goods remain aboard the vessel for delivery to the United States while the vessel is docked in a Cuban port, and may that vessel and its cargo then enter the United States without being subject to the 180-day rule or the goods/passengers-on-board rule?

Yes, provided that no other factors trigger the 180-day rule or the goods/passengers-on-board rule. For example, no goods may be unloaded in Cuba other than goods that would be designated as EAR99 or controlled on the Commerce Control List only for anti-terrorism reasons if they had been exported from the United States; and no merchandise may be loaded in Cuba that is not licensed or exempt. Goods entering the United States that remained on board the ship while it docked in a Cuban port are not considered goods carried to or from Cuba or goods in which Cuba or a Cuban national has an interest for purposes of the goods/passengers-on-board rule. Furthermore, such goods are not considered goods that have been located in or transported through Cuba for the purposes of 31 CFR § 515.204, which prohibits the importation of certain merchandise into the United States. For a complete description of the 180-day rule, the goods/passengers-on-board rule, the importation prohibition, and the general licenses and exemptions that apply, see 31 CFR §§ 515.204, 515.206, 515.207, and 515.550. [11-08-2017]


783. May companies that use different ocean carriers as part of a broader shipping service utilizing code-sharing agreements take advantage of the exceptions to the 180-day rule ?

The exceptions to the 180-day rule apply to each individual vessel that meets the requirements of the general license irrespective of any code-sharing arrangement. Thus, any shipping company may deploy a vessel in a broader shipping arrangement and, so long as the vessel meets the terms of the general license, that vessel may enter a U.S. port accordingly. There is no requirement for authorization of the individual companies or the broader code-sharing arrangement. Code-sharing agreements do not affect the general license or its requirements. [11-08-2017]


VII. Telecommunications


784. What types of telecommunications services are authorized under general license?

Persons subject to U.S. jurisdiction are authorized to engage in transactions that establish mechanisms to provide commercial telecommunications services in Cuba or linking third countries and Cuba. Persons subject to U.S. jurisdiction are also authorized to engage in telecommunications-related transactions, including payment related to the provision of telecommunications involving Cuba or provided to Cuban individuals. Pursuant to 31 CFR § 515.542, U.S. persons may, for example, purchase calling cards for people to use in Cuba or pay the bills of such people directly to a telecommunications operator located in Cuba, such as ETECSA. These steps to facilitate improved access to telecommunications services for Cubans and increased international connections are intended to increase the ability of the Cuban people to communicate freely and to better provide for efficient and adequate telecommunications services between the United States and Cuba.

The CACR define telecommunications services to include data, telephone, telegraph, internet connectivity, radio, television, news wire feeds, and similar services, regardless of medium of transmission, including transmission by satellite. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.542.          [09-06-2019]


785. What types of internet-based services are authorized under general license?

Persons subject to U.S. jurisdiction may provide certain services incident to internet-based communications and related to certain authorized exportations and reexportations of communications items. For example, transactions incident to providing fee-based internet communications services such as e-mail or other messaging platforms, social networking, VOIP, web-hosting, or domain-name registration are authorized in most circumstances. Services related to many kinds of software (including applications) used on personal computers, cell phones, and other personal communications devices are also authorized, along with other services related to the use of such devices. Finally, services such as cloud storage, software design, business consulting, and the provision of IT management and support related to use of hardware and software exported or reexported to Cuba pursuant to the Commerce Department s License Exception Consumer Communications Device (CCD) authorization or commodities or software used to develop software exported or reexported to Cuba pursuant to the Commerce Department s License Exception Support for the Cuban People (SCP) is permitted. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.578.      [09-06-2019]


786. Is peering an arrangement of traffic exchange between internet networks authorized by the CACR?

Yes. For example, a U.S. company could enter into a peering arrangement with ETECSA, the Cuban telecommunications provider, for the provision of internet services. See § 515.542(b). [09-06-2019]


787. Are services related to caching, such as the provision of data storage systems that reduce internet network traffic, authorized by the CACR?

Yes. Section 515.578 authorizes the exportation or reexportation to Cuba of services incident to the exchange of communications over the internet. To the extent data caching services are incident to such exchanges of communications, the provision of such services is authorized. Section 515.578 also authorizes the exportation of services, including business consulting and information technology management services that are related to certain consumer communications devices. For instance, the provision by an internet or telecommunications provider of caching services related to items exported to Cuba pursuant to Commerce License Exception Consumer Communications Devices (CCD) or an individual license issued by Commerce is authorized. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.578. [11-08-2017]


788. What type(s) of business arrangements are telecommunications and internet-based service providers that are subject to U.S. jurisdiction authorized to establish in Cuba?

Section 515.573 of the CACR contains a general license that authorizes certain persons subject to U.S. jurisdiction, including telecommunications and internet-based service providers, to establish a physical and business presence in Cuba to provide authorized telecommunications and internet-based services. A business presence may include subsidiaries, branches, offices, joint ventures, franchises, and agency or other business relationships with any Cuban individual or entity (including ETECSA) and a physical presence may include leasing physical premises, including an office, warehouse, classroom, or retail outlet. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.573. [09-06-2019]


789. May persons subject to U.S. jurisdiction who open an authorized business or physical presence, such as a joint venture, office, or retail outlet, in Cuba market their telecommunications or internet-based services?

Persons subject to U.S. jurisdiction that are providers of telecommunications or internet-based services who establish a business or physical presence in Cuba pursuant to the authorization in 31 CFR § 515.573 are authorized to engage in marketing related to that business or physical presence. [11-08-2017]


790. Are persons subject to U.S. jurisdiction engaging in authorized transactions permitted to enter into arrangements with Cuban state-owned entities, such as ETECSA?

Individuals or entities subject to U.S. jurisdiction engaging in authorized transactions, either pursuant to a general or specific license, may engage with Cuban state-owned entities as authorized by the OFAC license. For example, a U.S. company engaging in authorized telecommunications-related transactions pursuant to 31 CFR § 515.542, such as payment for activation, installation, usage, roaming, maintenance, or termination fees, may engage directly with the Cuban state-owned telecommunications company, ETECSA, for these authorized purposes. [11-08-2017]


VIII. Third Country Effects


791. Are Cuban nationals located outside of Cuba still considered blocked?

Yes, but any individual Cuban national who can establish that he or she has taken up permanent residence outside of Cuba and otherwise meets the requirements set forth in 31 CFR § 515.505 is generally licensed as an unblocked national. Additionally all persons subject to U.S. jurisdiction are authorized to provide goods and services to Cuban national individuals located outside of Cuba, provided there is no commercial exportation of goods or services to or from Cuba. Individuals subject to U.S. jurisdiction who are located in a third country may also receive or obtain services from a Cuban national that are ordinarily incident to travel and maintenance within that country. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.585. [11-08-2017]


792. Can U.S.-owned or -controlled entities in third countries engage in trade/commerce with Cuban nationals located outside of Cuba?

U.S.-owned or -controlled entities in third countries may provide goods and services to a Cuban national located outside of Cuba, provided that the transaction does not involve a commercial exportation, directly or indirectly, of goods or services to or from Cuba. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.585.

Other general licenses may authorize persons subject to U.S. jurisdiction, including U.S.-owned or -controlled entities in third countries, to engage in certain specified transactions with Cuban nationals that involve the commercial exportation of services to Cuba. For example, 31 CFR § 515.572(a)(5) authorizes persons subject to U.S. jurisdiction to provide certain civil aviation safety-related services to Cuba or to Cuban nationals, wherever located. [11-08-2017]


793. Are persons subject to U.S. jurisdiction authorized to provide financial services to Cuban nationals located outside of Cuba?

Yes. Persons subject to U.S. jurisdiction may provide financial services to a Cuban national located outside of Cuba who is an individual, provided that the transaction does not involve a commercial exportation, directly or indirectly, of goods or services to or from Cuba. Additionally, banking institutions are authorized to open and maintain accounts, including the deposit of funds in such accounts by wire transfer, for such Cuban nationals provided that the accounts are used only while the Cuban national is located outside of Cuba and the account is not used for transactions involving a commercial exportation, directly or indirectly, of goods or services to or from Cuba. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.585. [11-08-2017]


IX. Miscellaneous


794. What types of grants or awards in which Cuba or a Cuban national has an interest are authorized for persons subject to U.S. jurisdiction to provide?

Section 515.590 of the CACR authorizes the provision of certain grants, scholarships, or awards to Cuban nationals or in which Cuba or a Cuban national has an interest. Such grants, scholarships, or awards must relate to educational activities, certain humanitarian projects (as set forth in § 515.575 (b)), scientific research, or religious activities. In accordance with NSPM-5, OFAC amended this general license to exclude from the authorization direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.590. [09-06-2019]


795. Can a grant authorized pursuant to the CACR be awarded to a Cuban state-owned entity?

Section 515.590 of the CACR authorizes the provision of grants, scholarships, or awards to a Cuban national, including a Cuban state-owned entity provided that entity is not included on the State Department’s Cuba Restricted List, and as long as any such grant, scholarship, or award is related to educational activities, humanitarian projects (as set forth in § 515.575(b)), scientific research, or religious activities. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.590. [11-08-2017]


796. Are specific licenses still required for transactions relative to the administration of a Cuban estate?

Section 515.523 of the Cuban Assets Control Regulations authorizes all transactions incident to the administration and distribution of the assets of a blocked estate of a decedent. All property distributed pursuant to 31 CFR § 515.523 is unblocked, provided that neither Cuba nor a Cuban national (other than the decedent or a person unblocked pursuant to 31 CFR § 515.505) has an interest in the property. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.523.
Furthermore, funds deposited in a blocked account in a banking institution in the United States held in the name of, or in which the beneficial interest is held by, a national of Cuba as a result of a valid testamentary disposition, intestate succession, or payment from a life insurance policy or annuity contract triggered by the death of the policyholder or contract holder may be remitted to the national of Cuba pursuant to 31 CFR § 515.570(g). For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.570(g).

Please note, effective November 26, 2020, 31 CFR § 515.570 no longer authorizes any transaction relating to the collection, forwarding, or receipt of remittances involving an entity or subentity identified on the State Department’s Cuba Restricted List. [10-26-2020]


797. What types of projects would fall within the authorization in 31 CFR § 515.575 for microfinancing projects?

Among other things, the provision for microfinancing projects in section 515.575 of the Cuban Assets Control Regulations (CACR) authorizes the provision of certain financial services to unemployed, underemployed, and low-income Cubans who have little or no access to conventional banks or comparable resources, and which may include a limited return on investment. In addition, section 515.570(g)(1) of the CACR authorizes remittances to individuals and independent non-governmental entities in Cuba to support authorized microfinancing projects. These provisions would authorize, for example, relatively limited contributions of funds to support individual entrepreneurs in sectors that need access to working capital, investment loans, insurance, or training in order to start or expand their operations. Please note, effective November 26, 2020, 31 CFR § 515.570 no longer authorizes any transaction relating to the collection, forwarding, or receipt of remittances involving any entity or subentity identified on the State Department’s Cuba Restricted List. Further, 31 CFR § 515.575 and 31 CFR § 515.570(g)(1) do not authorize loans, extensions of credit or other financing related to transactions involving confiscated property the claim to which is owned by a U.S. national, which are prohibited by 31 CFR § 515.208. For additional guidance or fact-specific questions, we encourage you to contact OFAC. [10-26-2020]


798. If a person had applied for a specific license from OFAC before the CACR was revised but now believes that the proposed activity is authorized pursuant to a general license, does that person need to wait for his or her specific license application to be adjudicated

No. If persons meet the qualifications listed in the general license, then they do not need to wait for an official determination from OFAC regarding their specific license application. Persons who have determined they may proceed under a general license may wish to contact OFAC Licensing to withdraw existing applications. [11-08-2017]


799. Is a person subject to U.S. jurisdiction allowed to purchase or lease real property in Cuba?

Generally no, a person subject to U.S. jurisdiction is not authorized to purchase or lease real property in Cuba. The CACR prohibit any person subject to U.S. jurisdiction from purchasing or leasing property in Cuba unless authorized by OFAC.

Section 515.573 of the CACR authorizes certain entities subject to U.S. jurisdiction to establish a physical and/or business presence in Cuba to conduct authorized activities. The purchase or lease of real property in Cuba by such entities incident to their establishment of such physical or business presence is authorized. Additionally, employees of such entities authorized by § 515.573(a)(4) of the CACR to establish domicile in Cuba may purchase or lease residential property for use while domiciled in Cuba. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.573.

Authorized travelers to Cuba may lease property in Cuba as accommodations for the duration of their stay in Cuba. See 31 CFR § 515.560(c). This authorization is limited to the period of time when the traveler is in Cuba for authorized travel and does not permit the traveler to retain the property upon departure from Cuba.

Transactions related to the purchase or lease of real property in Cuba remain subject to the prohibitions in 31 CFR § 515.208. [11-08-2017]


800. May persons subject to U.S. jurisdiction import Cuban-origin pharmaceuticals into the United States?

Section 515.547(b) of the CACR authorizes all transactions incident to obtaining approval from the U.S. Food and Drug Administration (FDA) of Cuban-origin pharmaceuticals. The general license includes discovery and development, pre-clinical research, clinical research, regulatory review, regulatory approval and licensing, regulatory post-market activities, and the importation into the United States of Cuban-origin pharmaceuticals. Section 515.547(c) of the CACR authorizes the importation into the United States, and the marketing, sale, or other distribution in the United States, of FDA-approved Cuban-origin pharmaceuticals. For a complete description of what these general licenses authorize and the restrictions that apply, see 31 CFR § 515.547. Those engaging in the aforementioned activities may still need to secure regulatory approvals from other concerned U.S. government agencies, particularly the FDA. [09-06-2019]


801. May persons subject to U.S. jurisdiction provide services to Cuba or the Cuban government to support infrastructure maintenance and development in Cuba?

Section 515.591 of the CACR authorizes persons subject to U.S. jurisdiction to provide Cuba or Cuban nationals (including the Cuban government and state-owned entities) with services related to developing, repairing, maintaining, and enhancing Cuban infrastructure that directly benefit the Cuban people, consistent with the export or reexport licensing policy of the Department of Commerce. Infrastructure in this case means systems and assets used to provide the Cuban people with goods and services produced by the public transportation, water management, waste management, non-nuclear electricity generation, and electricity distribution sectors, as well as hospitals, public housing, and primary and secondary schools. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.591. [09-06-2019]


802. May persons subject to U.S. jurisdiction provide mail or parcel delivery services to Cuba or Cuban nationals?

With respect to the receipt or transmission of mail and parcels between the United States and Cuba, Section 515.542(a) of the CACR authorizes persons subject to U.S. jurisdiction to engage in all transactions, including payments, incident to such activities, provided that the importation or exportation of such mail and parcels is exempt from or authorized by the CACR. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.542(a).

This general license does not authorize transactions incident to the receipt of transmission of mail and parcels between third countries and Cuba, or involving Cuban nationals in third countries. To the extent that such mail or parcels contain information or informational materials, as defined in 31 CFR § 515.332, transactions incident to their receipt or transmission are exempt pursuant to 31 CFR § 515.206 or authorized by 31 CFR § 515.545(a). Additionally, the provision of mail or parcel delivery services to a Cuban national who is an individual located in a third country is authorized by 31 CFR § 515.585(a), provided that the transaction does not involve a commercial export of goods or services to Cuba. [09-06-2019] 


837. What did the September 24, 2020 amendment to the Cuban Assets Control Regulations (CACR) do?

Effective September 24, 2020, OFAC issued an amendment to the CACR restricting imports of Cuban-origin alcohol and tobacco products, as well as specific categories of authorized travel to Cuba related to professional meetings or conferences and certain public performances or other events, and also incorporating a new prohibition related to lodging in Cuba. Specifically, the September 24, 2020 amendment makes the following changes to the CACR:

  • Restrictions on lodging, paying for lodging, or making reservations for lodging at certain properties in Cuba.  Incorporates a prohibition in § 515.210, which prohibits any person subject to U.S. jurisdiction from lodging, paying for lodging, or making any reservation for or on behalf of a third party to lodge, at any property that the Secretary of State has identified as a property in Cuba that is owned or controlled by the Cuban government; a prohibited official of the Government of Cuba, as defined in § 515.337; a prohibited member of the Cuban Communist Party, as defined in § 515.338; a close relative, as defined in § 515.339, of a prohibited official of the Government of Cuba, or a close relative of a prohibited member of the Cuban Communist Party. In furtherance of this change, the State Department is creating a new list, the Cuba Prohibited Accommodations List, to publish the names, addresses, or other identifying details, as relevant, of properties identified as meeting such criteria. For more on section § 515.210, please see FAQ 838.
  • Restrictions on importation into the United States of Cuban-origin alcohol and tobacco products.  Amends four authorizations in the CACR to exclude the importation into the United States of Cuban-origin alcohol and tobacco products. See 31 CFR §§ 515.560(c)(3); 515.569; 515.571(a)(1); and 515.585(d). Previously, the importation of Cuban-origin alcohol and tobacco products as accompanied baggage was authorized for non-commercial use under certain circumstances; with this amendment, OFAC is eliminating those authorizations. For more information, please see FAQ 731.
  • Professional research and professional meetings in Cuba.  Eliminates the general authorization in § 515.564(a)(2) related to attendance at, or organization of, professional meetings or conferences in Cuba. Persons subject to U.S. jurisdiction are no longer authorized via this general license to attend or organize professional meetings or conferences in Cuba. As a result, the only remaining general license in § 515.564(a) will be the general license for certain professional research in Cuba. In addition, OFAC is clarifying that specific licenses may be issued on a case-by-case basis authorizing certain transactions related to professional research or professional meetings or conferences. For more information, please see FAQ 701
  • Public performances, clinics, workshops, athletic and other competitions, and exhibitions.  Eliminates the general authorization in § 515.567(b) related to public performances, clinics, workshops, competitions, and exhibitions. As a result, the only remaining general license for participation in and organization of athletic competitions in Cuba will be the general license in § 515.567(a) for athletic competitions by amateur or semi-professional athletes or athletic teams. In addition, OFAC is clarifying that specific licenses may be issued on a case-by-case basis authorizing certain activity. For more information, please see FAQ 706.

Please note that the Cuba embargo remains in place, and most transactions between Cuba and the United States, or persons subject to U.S. jurisdiction, continue to be prohibited under the CACR, which are enforced by OFAC. [09-23-2020]


838. What is the Cuba Prohibited Accommodations List and how do I know if I am authorized to lodge or pay for lodging at a property in Cuba?

No person subject to U.S. jurisdiction may lodge, pay for lodging, or make any reservation for or on behalf of a third party to lodge, at any property that the Secretary of State has identified as a property in Cuba that is owned or controlled by:  the Cuban government; a prohibited official of the Government of Cuba, as defined in § 515.337; a prohibited member of the Cuban Communist Party, as defined in § 515.338; a close relative, as defined in § 515.339, of a prohibited official of the Government of Cuba; or a close relative of a prohibited member of the Cuban Communist Party when the terms of the general or specific license expressly exclude such a transaction.  Such properties are identified on the Cuba Prohibited Accommodations List. See FAQ 839 for travel arrangements initiated prior to a property’s listing on the Cuba Prohibited Accommodations List. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. [09-23-2020]


839. Are authorized travelers who have initiated travel arrangements prior to the addition of a property on the State Department’s Cuba Prohibited Accommodations List required to cancel their Cuba-related travel plans if their travel arrangements involve lodging at a listed property?

Consistent with the Administration’s interest in avoiding negative impacts on Americans for arranging lawful travel to Cuba, any existing travel-related arrangements that include lodging at properties in Cuba identified on the Cuba Prohibited Accommodations List will continue to be permitted, provided that those travel-related arrangements were initiated prior to the State Department’s addition of the property to the list as published in the Federal Register. Once the State Department publishes notice in the Federal Register that it has added the property to the Cuba Prohibited Accommodations List, new lodging-related transactions with the property prohibited by § 515.210, such as a reservation on behalf of a third party to lodge at a property on the Cuba Prohibited Accommodations List, are prohibited, unless authorized by OFAC or exempt. For a complete description of the scope of this prohibition, see 31 CFR § 515.210. [09-23-2020]


852. What did the October 27, 2020 amendment to the Cuban Assets Control Regulations (CACR) do?

On October 27, 2020, OFAC issued an amendment to the CACR, effective November 26, 2020, to remove from the scope of certain remittance-related general authorizations any transactions involving entities or subentities identified on the State Department’s Cuba Restricted List. Specifically, the October 27, 2020 rule amends the following general licenses: (i) 31 CFR § 515.570, relating to remittances from persons subject to U.S. jurisdiction or from blocked accounts; (ii) 31 CFR § 515.572(a)(3), relating to the provision of remittance forwarding services; and (iii) 31 CFR § 515.587, relating to remittances from Cuban nationals to persons subject to U.S. jurisdiction. For more information, see 31 CFR §§ 515.570, 515.572, and 515.587.

Further, the October 27, 2020 rule amends 31 CFR § 515.421 to clarify that a transaction relating to the collection, forwarding, or receipt of remittances involving an entity or subentity identified on the State Department’s Cuba Restricted List is not authorized as an ordinarily incident transaction where the terms of the general or specific license expressly exclude any such transactions (see, e.g., 31 CFR § 515.570(j), 31 CFR § 515.572(a)(3), or 31 CFR § 515.587). For more information, see 31 CFR § 515.421. OFAC also added a clarifying note in 31 CFR § 515.209, consistent with the amended text of 31 CFR § 515.421. As a result of these amendments, effective November 26, 2020, persons subject to U.S. jurisdiction will no longer be authorized to process remittances to or from Cuba through FINCIMEX or any other entity or subentity on the Cuba Restricted List. [10-26-2020]


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

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:https://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. [04-01-2015]


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. [04-01-2015]


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. [04-01-2015]


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. [04-01-2015]


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. [04-01-2015]


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. [04-01-2015]


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 1A, Authorizing Certain Transactions with the Federal Security Service

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

GL 1A authorizes transactions with the Federal Security Service (a.k.a. Federalnaya Sluzhba Bezopasnosti) (a.k.a. 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 engage in transactions 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.

A prior version of this general license was issued on February 2, 2017 (GL 1).  On March 15, 2018, GL 1 was amended and reissued as GL 1A to ensure the scope of activities already authorized with respect to the FSB is not affected by the designation of the FSB under Section 224 of the Countering America s Adversaries Through Sanctions Act (CAATSA).  The changes to GL 1 are limited to adding CAATSA authorities.  GL 1A replaces and supersedes GL 1 effective March 15, 2018.  [03-15-2018]


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

GL 1A 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 subject to 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. [03-15-2018]


503. Does GL 1A 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 1A 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. [03-15-2018]


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 the 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). [03-15-2018]


646. How do I block digital currency? 

Once it has been determined that your institution is holding digital currency that is required to be blocked pursuant to OFAC s regulations, you must ensure that access to that digital currency is denied to the blocked person and that your institution complies with OFAC regulations related to blocked assets.  Institutions may choose, for example, to block each digital currency wallet associated with the digital currency addresses that OFAC has identified as being associated with blocked persons, or opt to use its own wallet to consolidate wallets that contain the blocked digital currency (similar to an omnibus account) titled, for example, Blocked SDN Digital Currency.  Each of these methods is satisfactory, so long as there is an audit trail that will allow the digital currency to be unblocked only when the legal prohibition requiring the blocking of the digital currency ceases to apply.  The institution is not obligated to convert the blocked digital currency into [traditional] fiat currency (e.g., U.S. dollars).  Blocked digital currency must be reported to OFAC within 10 business days.  Questions about whether a transaction should be blocked should be directed to OFAC at 202-622-2490 or mailto: ofac_feedback@treasury.gov. [11-28-2018]


647. Should an institution tell its customer that it blocked access to their digital currency and, if so, how does the institution explain it to the customer?

An institution may notify its customer that it has blocked digital currency pursuant to OFAC regulations.  The customer has the right to apply for the unblocking and release of the digital currency.

To apply online to have the virtual currency released, please go to OFAC s online application page. [11-28-2018]


Somalia Sanctions: Private Relief Efforts

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

 


836. What sanctions remain applicable to Sudan and the Government of Sudan?

For information pertaining to the status of OFAC s Sudan and Darfur-related sanctions programs, including licensing requirements, please review the Sudan Program and Darfur Sanctions Guidance. [08-11-2020]


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

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

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.


 

Assessing OFAC Name Matches

5. How do I determine if I have a valid OFAC match?

Please take the following due diligence steps in determining a valid OFAC match.

If you are calling about a wire transfer or other live transaction:

Step 1. Is the hit or match against OFAC s Specially Designated Nationals (SDN) list, one of its other sanctions lists, or targeted countries, or is it hitting for some other reason (i.e., Control List or PEP, CIA, Non-Cooperative Countries and Territories, Canadian Consolidated List (OSFI), World Bank Debarred Parties, Blocked Officials File, or government official of a designated country ), or can you not tell what the hit is?

  • If it s hitting against OFAC s SDN list, one of its other sanctions lists, or targeted countries, continue to 2 below.
  • If it s hitting for some other reason, you should contact the keeper of whichever other list the match is hitting against. For questions about:
  • The Denied Persons List and the Entities List, please contact the Bureau of Industry and Security at the U.S. Department of Commerce at 202-482-4811.
  • The FBI s Most Wanted List or any other FBI-issued watch list, please contact the Federal Bureau of Investigation (http://www.fbi.gov/contact/fo/fo.htm).
  • The Debarred Parties list, please contact the Directorate of Defense Trade Controls at the U.S. Department of State, 202-663-1282.
  • The Bank Secrecy Act and the USA PATRIOT Act, please contact the Financial Crimes Enforcement Network (FinCEN), 1-800-949-2732.
  • If you are unsure whom to contact, please contact your screening software provider which told you there was a hit.
  • If you can t tell what the hit is, you should contact your screening software provider which told you there was a hit.

Step 2. Now that you ve established that the hit is against one of OFAC s sanctions lists or targeted countries, you must evaluate the quality of the hit. Compare the name in your transactions with the name on the sanctions list. Is the name in your transaction an individual while the name on the sanctions list is a vessel, organization or company (or vice-versa)?

  • If yes, you do not have a valid match.*
  • If no, please continue to 3 below.

Step 3. How much of the listed entry s name is matching against the name in your transaction? Is just one of two or more names matching (i.e., just the last name)?

  • If yes, you do not have a valid match.*
  • If no, please continue to 4 below.

Step 4. Compare the complete sanctions list entry with all of the information you have on the matching name in your transaction. An entry often will have, for example, a full name, address, nationality, passport, tax ID or cedula number, place of birth, date of birth, former names and aliases. Are you missing a lot of this information for the name in your transaction?

  • If yes, go back and get more information and then compare your complete information against the entry.
  • If no, please continue to 5 below.

Step 5. Are there a number of similarities or exact matches?

  • If yes, please call the hotline at 1-800-540-6322.
  • If no, you do not have a valid match.*

If you are calling about an account:

Step 1. Is the hit or match against OFAC s SDN list, one of OFAC's other sanctions lists or targeted countries, or is it hitting for some other reason (i.e., Control List or PEP, CIA, Non-Cooperative Countries and Territories, Canadian Consolidated List (OSFI), World Bank Debarred Parties, or government official of a designated country ), or can you not tell what the hit is?

  • If it s hitting against one of OFAC s sanctions lists or targeted countries, continue to 2 below.
  • If it s hitting for some other reason, you should contact the keeper of whichever other list the match is hitting against. For questions about:
  • The Denied Persons List and the Entities List, please contact the Bureau of Industry and Security at the U.S. Department of Commerce at 202-482-4811.
  • The FBI s Most Wanted List or any other FBI-issued watch list, please contact the Federal Bureau of Investigation (http://www.fbi.gov/contact/fo/fo.htm).
  • The Debarred Parties list, please contact the Directorate of Defense Trade Controls at the U.S. Department of State, 202-663-1282.
  • The Bank Secrecy Act and the USA PATRIOT Act, please contact the Financial Crimes Enforcement Network (FinCEN), 1-800-949-2732.
  • If you are unsure whom to contact, you should contact your screening software provider which told you there was a hit.
  • If you can t tell what the hit is, you should contact your screening software provider which told you there was a hit.

Step 2. Now that you ve established that the hit is against one of OFAC s sanctions lists or targeted countries, you must evaluate the quality of the hit. Compare the name of your customer with the name on the sanctions list. Is the name of your customer an individual while the name on the sanctions list is a vessel, organization or company (or vice-versa)?

  • If yes, you do not have a valid match.*
  • If no, please continue to 3 below.

Step 3. How much of the listed entry s name is matching against the name of your account holder? Is just one of two or more names matching (i.e., just the last name)?

  • If yes, you do not have a valid match.*
  • If no, please continue to 4 below.

Step 4. Compare the complete entry with all of the information you have on the matching name of your account holder. An entry often will have, for example, a full name, address, nationality, passport, tax ID or cedula number, place of birth, date of birth, former names and aliases. Are you missing a lot of this information for the name of your account holder?

  • If yes, go back and get more information and then compare your complete information against the entry.
  • If no, please continue to 5 below.

Step 5. Are there a number of similarities or exact matches?

  • If yes, please call the hotline at 1-800-540-6322.
  • If no, you do not have a valid match.*

* If you have reason to know or believe that processing this transfer or operating this account would violate any of the Regulations, you must call the hotline and explain this knowledge or belief. [01-30-2015]

 


Strong and Weak Aliases

For additional information regarding strong and weak aliases on OFAC's sanctions lists, please see the following topic.

 

Starting an OFAC Compliance Program

25. Does OFAC itself require that banks set up a certain type of compliance program?

No. There is no single compliance program suitable for every financial institution. OFAC is not itself a bank regulator; its basic requirement is that financial institutions not violate the laws that it administers. Financial institutions should check with their regulators regarding the suitability of specific programs to their unique situations. [09-10-2002]


27. What do I need to do to comply? Do I have to buy expensive software?

This is primarily a question for your regulator. What constitutes an adequate compliance program depends in large part on who your customers are and what kinds of business you do. Certain areas of bank operations, such as international wire transfers and trade finance, are at a higher risk than others. There are numerous interdiction software packages that are commercially available. They vary considerably in cost and capabilities. If your bank feels it needs to invest in software in its attempt to comply with OFAC regulations, OFAC recommends that you talk to your counterparts in other banks about the systems they have in place and contact vendors for an assessment of your needs. It should be noted that *.TXT and *.PDF versions of all of OFAC's sanctions lists can be manually scanned; OFAC also offers a free, online search engine at the following URL: https://sdnsearch.ofac.treas.gov [01-30-2015]


28. How often do I need to scan my customer database against OFAC's sanctions lists?

The frequency of running an OFAC scan must be guided by your organization's internal policies and procedures. Keep in mind, however, that if your organization fails to identify and block a target account (of a terrorist, for example), there could be serious consequences such as a transfer of funds or other valuable property to an Specially Designated National, an enforcement action against your organization, and negative publicity. [01-30-2015]


29. How do I setup a compliance program for my bank?

There is no prepackaged compliance program that fits the needs of every bank. Banks, obviously, range in size from small to some of the largest institutions in the world. A good starting point is to go to the OFAC website and look under "Regulations by Industry." Then read the brochure for the Financial Community. This brochure provides insight as to how your particular bank could set up a compliance program. There are also a number of articles written for banking industry publications available on OFAC's website. Banks should also review OFAC's Frequently Asked Questions, its SDN and other sanctions list pages and finally, OFAC's dedicated sanctions program pages. It may be helpful to contact your counterparts in other banks to see what they are doing and talk to your regulator. [01-30-2015]


30. How do I know if my compliance program is adequate?

The following information will provide you with areas to consider as you review your OFAC procedures. [09-10-2002]


31. What are the features and benefits that banks should be looking for when selecting an OFAC compliance software package?

There are a wide variety of software packages available to the financial community. The size and needs of each institution help to determine what to look for in a package. Some packages are used to interdict sanctioned countries and names on the Specially Designated Nationals or other sanctions lists in wire transfers. Others are used to check the names of new customers or to routinely filter the names of all account holders. One suggestion for finding the right software for your bank is to research what your peer banks are using and determine if the software package is working for them. Your bank also could talk to a variety of software vendors who can easily be located by doing an Internet search. [01-30-2015]


 

Blocking and Rejecting Transactions

32. How do I block an account or a funds transfer?

Once it has been determined that funds need to be blocked, they must be placed into an interest-bearing account on your books from which only OFAC-authorized debits may be made. The blocking also must be reported to OFAC Compliance within 10 business days. Some banks have opted to open separate accounts for each blocked transaction, while others have opted for omnibus accounts titled, for example, "Blocked Libyan Funds." Either method is satisfactory, so long as there is an audit trail which will allow specific funds to be unblocked with interest at any point in the future. [09-10-2002]


33. How much interest do I have to pay on the blocked funds?

OFAC regulations require that funds earn interest at a commercially reasonable rate, i.e., at a rate currently offered to other depositors on deposits or instruments of comparable size and maturity. [09-10-2002]


34. Can my bank deduct service charges from the account?

Generally yes. In most cases (excluding Iraq, for instance) OFAC regulations contain provisions to allow a bank to debit blocked accounts for normal service charges, which are described in each set of regulations. The charges must be in accordance with a published rate schedule for the type of account in which the funds are maintained. [09-10-2002]


35. Do all OFAC programs involve blocking transactions?

No. OFAC regulations are tailored to further the requirements and purposes of specific Executive Orders or statutes which provide the basic outline of each program. In some cases, the President has determined that a comprehensive asset freeze is appropriate, and in others the President has determined that more limited restrictions (for example, import bans) are in order. The individual program web pages outline the restrictions for each program. Special attention should be given when reviewing sanctions list targets that are included on one of OFAC's non-Specially Designated Nationals sanctions lists. [01-30-2015]


36. I understand blocking a transaction, but what is meant by rejecting a transaction?  When should a transaction be rejected rather than blocked?

In some cases, an underlying transaction may be prohibited, but there is no blockable interest (i.e., that of a Specially Designated National (SDN) or blocked person or government) in the transaction.  In these cases, the transaction is simply rejected, or not processed and returned to the originator. 

For example, a U.S. financial institution would have to reject a wire transfer between two third-country companies (non-SDNs) involving an export to a company in Iran that is not otherwise subject to sanctions.  Since there is no interest of the blocked person (e.g., the Government of Iran, and Iranian financial institution, or an SDN), there is no blockable interest in the funds.  However, the U.S. financial institution cannot process the transaction because that would constitute a prohibited export of services to Iran pursuant to the Iranian Transactions and Sanctions Regulations (ITSR), unless authorized by OFAC or exempt from regulation.  Similarly, a U.S. financial institution is prohibited under the ITSR from an engaging in trade-related transactions or dealings with Iran, including financing a prohibited transaction.  A U.S. financial institution cannot so much as advise a letter of credit if the underlying transaction is in violation of OFAC regulations.  In addition, U.S. persons are prohibited from facilitating transactions by foreign persons that would be prohibited if performed by a U.S. person.

 

The following examples may help illustrate which transactions should be blocked and which should be rejected.

 

  • A U.S. financial institution interdicts a commercial payment destined for the account of XYZ Import-Export Co. at the Bank of XYZ in Iran.  The Bank of XYZ is an Iranian financial institution and wholly-owned by the Government of Iran; accordingly, Bank of XYZ is blocked under section 560.211 of the ITSR.  This payment must be blocked.

  • A U.S. financial institution interdicts a commercial payment destined for ABC Import-Export in Tehran, Iran.  Unlike the Bank of XYZ, ABC Import-Export in Tehran is not a blocked person, so there is no blockable interest in this payment.  However, processing the payment would mean facilitating trade with Iran, exporting a service to Iran, and engaging in trade-related transactions with Iran; therefore, the U.S. financial institution must reject the payment.

Blocked and rejected transactions must be reported to OFAC within 10 days (see 31 C.F.R. §§ 501.603 and 501.604).  Questions about whether a transaction should be blocked or rejected should be directed to OFAC s Sanctions Compliance & Evaluation Division at OFACReport@treasury.gov. [08-11-2020]


39. What do I do if I have a blocked account that needs to be escheated to the state?

You need to discuss this with your state authorities and with OFAC. For instance, the state of New York has a license to escheat blocked funds, pending OFAC approval of each transfer. Banks in New York should contact the State Banking Department for instructions on how to proceed. Banks in other states should contact OFAC directly for instructions on how to proceed. [09-10-2002]


41. Should an institution tell its customer that it blocked their funds, and, if so, how does the institution explain it to them?

An institution may notify its customer that it has blocked funds in accordance with OFAC's instructions. The customer has the right to apply for the unblocking and release of the funds.

To apply online to have the funds released, please go to our online application page. [3-16 -2015]


42. What do I do if a person tries to open an account and the individual or entity s name is on OFAC s SDN List (or is otherwise a blocked person)?  Do I open the account and then block the funds?

A U.S. financial institution, its foreign branches, and in some cases its wholly-owned or -controlled foreign subsidiaries, cannot open an account for a person named on OFAC s List of Specially Designated Nationals and Blocked Persons (SDN List) or a person who is otherwise blocked (e.g., a blocked government or an entity that is subject to the 50 Percent Rule ).  This is a prohibited service.  However, the institution or its affiliates should pay careful attention to ensure the person trying to open the account is the same person as the one named on OFAC s SDN List or is otherwise subject to blocking.  In many cases, an institution may identify a false positive, where the name is similar to a sanctioned person s name, but the rest of the information provided by the applicant does not match the descriptor information on OFAC s SDN List.  If a U.S. financial institution does come into the possession or control of any property in which a blocked person has an interest, the U.S. financial institution is obligated to block that property.  In other words, if you receive an application to open an account from a person who matches the information on the SDN List, together with an opening deposit, you are obligated to block the funds.  The same is true for other banking transactions.  If, for example, a customer asks if he or she is allowed to send money to a relative s account with Bank of XYZ, which appears on the SDN List, the bank can say no, that s illegal.   If, on the other hand, a bank receives instructions from its customer to debit his or her account and send the funds to Bank of XYZ, the bank must act on the instructions by blocking the funds that contain a future interest of the SDN bank.  You might think of the analogy of a bouncing ball.  Once the ball starts moving, you must stop it if it comes into your possession. [08-11-2020]


48. I just received an interdiction "alert." What do I do?

When your interdiction software or account holder checking service shows a potential match, OFAC recommends that you do an initial analysis prior to contacting OFAC. If you have a reasonably close match to a name on the Specially Designated Nationals (SDN) list (or one of OFAC's other sanctions lists) and your customer is located in the same vicinity as the SDN, feel free to contact OFAC. Computer software may flag some transactions that are not actually associated with OFAC targets. This is where human intervention becomes critical and some hands-on research may be necessary. Please look at the following "due dilligence" steps before calling OFAC. Unless you have an exact match or are otherwise privy to information indicating that the hit is a sanctions target, it is recommended that you do not actually block a transaction without discussing the matter with OFAC. [01-30-2015]


53. How do I differentiate between an "inquiry" and a "payment instruction" when a customer wants to send a wire transfer to a sanctioned party or country?

In those programs with blocking provisions, OFAC's regulations block all "property" in which a target has an interest. The term "property" is very broadly defined, including present, future or contingent interests. In the case of a wire transfer, the bank will be holding blocked property upon the receipt of concrete instructions from its customer to send the funds. In this case, the funds must be blocked and reported to OFAC within ten days. If, on the other hand, a customer simply asks "Can I send money to Cuba?" there is no blockable interest in the inquiry and the bank can answer the question or direct the customer to OFAC. The same logic applies to cases where the transaction would be required to be rejected under OFAC regulations. There is not technically a "reject" item until the bank receives instructions from its customer to debit its account and send the funds. [01-15-2015]


 

 

Filing Reports with OFAC

49. If I reject or block a transaction, when do I have to report the action to OFAC? How do I submit the report?

31 C.F.R. Parts §§501.603 and 501.604 require blocking and reject reports to be submitted to OFAC within 10 business days of the date of the action. Optional reporting forms are available at this link and complete information may be emailed to OFAC s Sanctions Compliance and Evaluation Division at ofacreport@treasury.gov. Blocking and reject reports must contain a copy of the original transfer instructions. [07-28-2017]


50. Is there a requirement for annual reporting of blocked property? Is there a required format?

Yes. A report of blocked property is to be submitted annually by September 30 to OFAC Compliance, Department of the Treasury, Washington, D.C., 20220. The standardized form can be accessed by visiting this link. If you wish to use a different format, please contact OFAC's Compliance Division at 202-622-2490. For Guidance on Filing the Annual Report of Blocked Property, visit this link. [06-30-2017]


819. Is the June 21, 2019 amendment to the Office of Foreign Assets Control (OFAC) s Reporting, Procedures and Penalties Regulations in effect? Am I required to comply with all requirements of the amended regulations?

Yes, effective June 21, 2019, OFAC amended the Reporting, Procedures and Penalties Regulations, 31 CFR part 501 (RPPR), to provide updated instructions and incorporate new requirements for parties filing reports on blocked property, unblocked property, or rejected transactions. In addition, this rule includes information regarding OFAC s electronic license application procedures and provides additional instructions regarding applications for the release of blocked funds.

OFAC expects all U.S. persons and persons otherwise subject to U.S. jurisdiction, including parties that are not U.S. financial institutions, to comply fully with all requirements of this rule, including the expanded requirement in Section 501.604 of the RPPR to provide reports to OFAC regarding rejected transactions within 10 business days of the rejected transaction. (Previously, only U.S. financial institutions were required to submit reports to OFAC for rejected funds transfers.) Reports on rejected transactions are to be submitted to OFAC, preferably electronically, as specified by OFAC s Reporting and License Application Forms webpage.

OFAC accepted comments from the public on this rule, which it continues to review. In addition, OFAC welcomes further feedback as we assess whether any clarification or modification to the rule is appropriate, including: additional information regarding the business impact of this rule; examples of rejected transactions that are proving challenging to report; the quantity of rejected transactions; and the types of information in the filer s possession for a rejected transaction report. Feedback and questions regarding the rule should be submitted to OFAC s Compliance Division by email at: OFAC_Feedback@treasury.gov. [02-20-2020]


820. I am required to submit a rejected transaction report to OFAC, but I do not have all the information that is required to be reported pursuant to 31 CFR § 501.604(b). Am I required to collect such information from my counterparty just to complete my rejected transaction report?

OFAC expects U.S. persons and persons otherwise subject to U.S. jurisdiction to provide all information required by Section 501.604(b) of the RPPR that is in the filer s possession in a rejected transaction report, and generally does not expect reporters to seek further information from their counterparty solely to obtain additional information required to be reported under Section 501.604(b). However, OFAC would expect at a minimum that all rejected transaction reports include required information that is applicable in all reject scenarios (e.g., information regarding the submitter of the report, the date the transaction was rejected, the legal authority or authorities under which the transaction was rejected, and any relevant documentation received in connection with the transaction). [02-20-2020]



Compliance for Internet, Web Based Activities, and Personal Communications

72. Can I send money to a sanctioned country using a third-country company s website? Can I buy gifts for someone in a sanctioned country over the internet? The websites tell me that it s ok because they themselves are not sanctioned parties.

You cannot do something indirectly that you would not be able to do directly. Therefore, these sites can be used to facilitate authorized transactions, but you cannot use them to perform a transaction which would be in violation of U.S. law. For example, the Cuban Assets Control Regulations (CACR) authorize any U.S. person to send $1,000 per quarter to close relatives in Cuba, provided that the recipient is not a prohibited official of the Government of Cuba, as defined in § 515.337 or a prohibited member of the Cuban Communist Party, as defined in § 515.338, or a close relative of such persons, as defined in § 515.339. See 31 CFR § 515.570(a) and (j) for additional applicable conditions. Subject to those conditions, the U.S. remitter can use a third-country provider to send these funds to Cuba. If the person attempts to send more than $1000 per quarter to any one individual, however, he or she may be in violation of U.S. law and subject to penalties. Another example is booking unauthorized travel to Cuba using an internet travel service provider in a third country. Spending money on unauthorized travel-related transactions involving Cuba is prohibited by the CACR, regardless of how the travel is booked or how it is paid for. The fact that the trip was booked through a third-country company, either in person or over the internet, is irrelevant. [10-26-2020]


73. My company provides money remittance and account services via the Internet. Does OFAC have any compliance guidance for this type of business?

Complying with United States sanctions policy presents unique challenges to institutions that operate exclusively on the Internet. The Internet has often been thought of as an "anonymous venue" in that e-commerce transactions can be conducted in relative privacy with little or no face-to-face contact among the parties in a transaction. This anonymity creates a significant challenge for Internet businesses that wish to satisfy their due diligence requirements.

In order to be compliant with OFAC-governed sanctions regulations, US jurisdiction entities must ensure that they are not:

A. Engaging in trade or transaction activities that violate the regulations behind OFAC s country-based sanctions programs, and;

B. Engaging in trade or transaction activities with sanctions targets named on OFAC's list of Specially Designated Nationals and Blocked Persons (SDN's).

A number of Internet-based financial service companies already developed Internet Protocol (IP) address blocking procedures. These companies use publicly available data to maintain tables of IP addresses based on geographic region. Users attempting to initiate an online transaction or access an account from a sanctioned country are blocked based on their IP address. While this approach is effective, it does not fully address an Internet firm s compliance risks. The fact that international distribution authorities can reassign IP blocks makes the geographic location of an IP potentially dynamic.

The anonymous character of Internet-based transactions often places obstacles in the path of rigorous compliance practices. Firms that facilitate or engage in e-commerce should do their best to know their customers directly. In order to minimize their liabilities, Internet remittance and account service firms should attempt to gather authentic identification information on their customers before a new account is opened or new transaction is initiated. This information will help confirm the customer s identity and help the e-commerce firm ensure it is not conducting business with a sanctions target. Currently many Internet remittance companies use credit card authentication as the primary method of confirming a customer's identity. While this method is technologically expedient, it does not meet the standards of due diligence normally found in the non-Internet-based financial community. A company cannot rely on another firm s compliance program in order to mitigate risk.

It is recommended that e-commerce firms gather and record "purpose of payment" information on each transaction they process. In the non-Internet sector, financial institutions are able to stop in-process transactions and gather more information on them. Due to the level of automation found within the Internet financial sector, this type of in-process information gathering is not always possible. Collecting information on the purpose of payments up front will allow Internet firms to better screen outgoing and incoming transactions for potential violations. [04-13-2004]


Cyber-related Sanctions and Executive Orders 13694 and 13757
 

For information regarding Cyber-related Sanctions and Executive Orders 13694 and 13757, please see the following topic.


 


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")

Effective January 17, 2017, the general license under the Sudanese Sanctions Regulations, 31 C.F.R. part 538 (SSR), authorizing the exportation, reexportation, or provision of certain services, software, and hardware incident to personal communications, 31 C.F.R. § 538.533, has been superseded by a broader general license under the SSR that authorizes all transactions prohibited under the SSR. See 31 C.F.R. § 538.540. As a result, for such exports and reexports to Sudan, U.S. persons may rely on the broader authorization in § 538.540 and do not need to abide by the narrower requirements of § 538.533. Section 538.540 only authorizes transactions prohibited under the SSR and does not affect Iran General License D-1.


434. Are all applications designed to run on mobile operating systems ( apps ) covered by the Personal Communications GLs?

The exportation to Iran and Sudan of apps that are designated EAR99 or classified under export control classification number (ECCN) 5D992.c, as specified in category (8) of the Annex to GL D-1 and in Appendix A to § 538.533, respectively, is authorized under the Personal Communications GLs, including apps downloaded via online app stores. [02-17-2015]


435. Is the exportation of anti-virus, anti-malware, anti-tracking, and anti-censorship software authorized?

Yes. Paragraphs (a)(3) of GL D-1 and § 538.533 authorize the exportation of certain anti-virus, anti-malware, anti-tracking, and anti-censorship software, as specified in categories (6), (7), and (9) of the Annex to GL D-1 and Appendix A to § 538.533, respectively. [02-17-2015]


436. What do Secure Socket Layers (SSLs), listed in the Annex to GL D-1 and in Appendix A to § 538.533, encompass?

SSLs, as described in category (11) of the Annex to GL D-1 and Appendix A to § 538.533, respectively, encompass provisioning and verification software for Secure Socket Layer (SSL) certificates designated EAR99 or classified under ECCN 5D992.c, and services necessary for the operation of such software. Additional provisioning and verification software not subject to the EAR may be included under the Personal Communications GLs authorization for, in relevant part, software not subject to the EAR that is exported or reexported, directly or indirectly, by a U.S. person located outside the United States, that is of a type described in the Annex to GL D-1 and Appendix A to § 538.533, respectively, provided that it would be eligible for classification under an ECCN listed in the Annex or Appendix (here, ECCN 5D992.c), or designated as EAR99, if it were subject to the EAR. [02-17-2015]


437. Are mobile phone accessories and computer accessories and peripherals authorized for export under the Personal Communications GLs?

Yes. Accessories for use in conjunction with hardware specified in categories (1) and (5) of the Annex to GL D-1 and Appendix A to § 538.533, respectively, and peripherals for use in conjunction with hardware specified in category (5) of the same are authorized for export to Iran and Sudan under the Personal Communications GLs. Authorized accessories for mobile phones include headsets, cases, holsters, mounts, chargers, docks, display protectors, cables, adapters, and batteries. Authorized accessories for computers include keyboards and mice; authorized peripherals for computers include consumer disk drives and other data storage devices. As set forth in a note to the Annex to GL D-1 and Appendix A to § 538.533, respectively, for the purposes of the Annex and Appendix, the term consumer refers to items that are: (1) generally available to the public by being sold, without restriction, from stock at retail selling points by means of any of the following: (a) over-the-counter transactions; (b) mail order transactions; (c) electronic transactions; or (d) telephone call transactions; and (2) designed for installation by the user without further substantial support by the supplier. [02-17-2015]


438. Is the exportation of parts or components for authorized hardware, such as microprocessors, authorized under the Personal Communications GLs?

No. While the exportation of certain accessories and peripherals specified in categories (1) and (5) of the Annex to GL D-1 and Appendix A to § 538.533, respectively, is authorized under paragraphs (a)(3) of the Personal Communications GLs, the exportation of hardware parts or components is not. Requests for specific licenses to export parts or components, including replacement parts, will be considered on a case-by-case basis. [02-17-2015]


439. Do the Personal Communications GLs authorize the export of bundled software that includes both software authorized by the Personal Communications GLs and software that is not authorized by the Personal Communications GLs?

No. To qualify for the Personal Communications GLs, all individual software items in a bundled package must fall within one of the Personal Communications GL authorizations. If some software in a bundled package is authorized by the Personal Communications GLs, but other software is not, the portion of the software falling outside the authorizations in the Personal Communications GLs would need to be otherwise exempt or authorized or would require a specific license for export. For example, a bundle of software that included exclusively software authorized by GL D-1 and by 31 CFR § 560.540 could be exported. [02-17-2015]


440. Do the Personal Communications GLs authorize the exportation to Iran and Sudan of fee-based desktop publishing software and productivity software suites used to publish documents, presentations, spreadsheets, charts, music, movies, and digital images?

Yes. Fee-based desktop publishing software and productivity software suites have been determined to fall within the scope of fee-based software necessary to enable services incident to the exchange of personal communications as described in paragraphs (a)(2) of the Personal Communications GLs, provided that the software meets the additional criteria in those paragraphs (e.g., for software subject to the EAR, the software is designated EAR99 or is classified by the U.S. Department of Commerce on the Commerce Control List, 15 CFR part 774, supplement No. 1 ( CCL ) under ECCN 5D992.c). By contrast, enterprise management software has been determined not to fall within the scope of fee-based software necessary to enable services incident to the exchange of personal communications as described in paragraphs (a)(2) of the Personal Communications GLs. [02-17-2015]


441. Do the Personal Communications GLs authorize the exportation of fee-based cloud computing services to Iran and Sudan

Yes. Paragraphs (a)(1) of the Personal Communications GLs authorize the exportation to Iran and Sudan of fee-based cloud computing services incident to the exchange of personal communications over the Internet. In addition, paragraphs (a)(2)(i) and (a)(3) authorize software necessary to enable such services, provided that such software is designated EAR99 or classified by the U.S. Department of Commerce on the CCL under ECCN 5D992.c or, in the case of software that is not subject to the EAR, would be designated EAR99 if it were located in the United States or would meet the criteria for classification under ECCN 5D992.c if it were subject to the EAR. [02-17-2015]


442. For purposes of category (5) of the Annex to GL D-1 and Appendix A to § 538.533, respectively, what would be considered software required for effective consumer use of personal computing devices, laptops, and tablets?

Software required for effective consumer use consists of software essential to the operation of the hardware listed in category (5) of the Annex to GL D-1 and Appendix A to § 538.533, respectively, including, for example, drivers and patches. Operating systems are separately authorized in category (5) of the Annex to GL D-1 and Appendix A to § 538.533. [02-17-2015]


443. What are residential consumer satellite terminals and transceiver equipment?

Satellite terminals and other equipment listed in category (4) of the Annex to GL D-1 and Appendix A to § 538.533, respectively, shall be deemed residential consumer if the equipment is designated EAR99 or classified under ECCN 5A992.c, 5A991.b.2, or 5A991.b.4 or, in the case of equipment that is not subject to the EAR, would be designated EAR99 if it were located in the United States or would meet the criteria for classification under ECCN 5A992.c, 5A991.b.2, or 5A991.b.4 if it were subject to the EAR. [02-17-2015] 



Compliance for the Insurance Industry

61. State insurance statutes regulate an insurer's ability to withhold claim payments, cancel policies or to decline to enter into policies. In some cases, insurers must commit an ostensible violation of state insurance regulations to comply with OFAC regulations. Does OFAC have a position as to whether OFAC regulations preempt state insurance regulations in this context?

OFAC's regulations under the Trading with the Enemy Act and the International Emergency Economic Powers Act are based on Presidential declarations of national emergency and preempt state insurance regulations. OFAC regulations are not federal insurance regulations, they are regulations promulgated under the President's exercise of foreign-affairs and national emergency powers. [09-10-2002]


62. At what point must an insurer check to determine whether an applicant for a policy is a Specially Designated National (SDN) or is on one of OFAC's other sanctions lists?

If you receive an application from an SDN for a policy, you are under an obligation not to issue the policy. Remember that when you are insuring someone, you are providing a service to that person. You are not allowed to provide any services to an SDN. If the SDN sends a deposit along with the application, you must block the payment. If you receive an application from a party on one of OFAC's other sanctions lists, please review the specific treatment prohibitions associated with that list carefully before taking any action. [09-10-2002]


63. What should an insurer do if it discovers that a policyholder is or becomes a Specially Designated National (SDN)--cancel the policy, void the policy ab initio, non-renew the policy, refuse to pay claims under the policy? Should the claim be paid under a policy issued to an SDN if the payment is to an innocent third-party (for example, the injured party in an automobile accident)?

The first thing an insurance company should do upon discovery of such a policy is to contact OFAC Compliance. OFAC will work with you on the specifics of the case. It is possible a license could be issued to allow the receipt of premium payments to keep the policy in force. Although it is unlikely that a payment would be licensed to an SDN, it is possible that a payment would be allowed to an innocent third party. The important thing to remember is that the policy itself is a blocked contract and all dealings with it must involve OFAC. [09-10-2002]


64. A workers' compensation policy is with the employer, not the employee. Is it permissible for an insurer to maintain a workers compensation policy that would cover a person on the Specially Designated Nationals (SDN) List, since the insurer is not transacting business with the SDN, but only with his/her employer?

If an insurer knows that a person covered under the group policy is an SDN, that person s coverage is blocked, and if he or she makes a claim under the policy, the claim cannot be paid. If an insurer does not know the names of those covered under a group policy, it would have no reason to know it needed to block anything unless and until an SDN files a claim under that policy. At that point its blocking requirement would kick in.

If an insurer knows that a person covered under a group policy is on one of OFAC's other sanctions lists, a different set of restrictions may apply. The insurer should contact OFAC if a claim is filed by an individual on one of the other sanctions lists. [01-30-2015]


65. How frequently is an insurer expected to scrub its databases for OFAC compliance?

That is up to your firm and your regulator. Remember that a critical aspect of the designation of a Specially Designated National (SDN) is that the SDN's assets must be frozen immediately, before they can be removed from U.S. jurisdiction. If a firm only scrubs its database quarterly, it could be 3 months too late in freezing targeted assets. Although the prohibitions and treatments for individuals and entities on OFAC's other sanctions lists are different from those on the SDN list, there may be similar consequences if your firm takes a long time in recognizing a sanctions list match.

OFAC's sanctions lists may be updated as frequently as a few times a week or as rarely as once in a month. [01-30-2015]


66. Is it sufficient if my company screens life insurance policies only prior to policy issuance?

That is up to your firm and your regulators. Conducting screening only before policy issuance is critical but would not likely achieve your desired level of compliance. After the policy issuance, the U.S. Government may designate an existing policyholder or a named beneficiary as a Specially Designated National or Blocked Person ("SDN"), or it may expand sanctions with respect to a particular country, or impose sanctions against a new country. If an existing policyholder or a named beneficiary became an SDN or otherwise subject to U.S. sanctions, the insurer may be required to "block" the policy, report such blocking to OFAC within 10 days of the SDN designation, place any future premiums into a blocked, interest-bearing account at a U.S. financial institution, and seek an OFAC license before making any payments under the policy. Other restrictions may apply if a policyholder or a named beneficiary is added to one of OFAC's other sanctions lists. Consequently, routinely screening all policies against OFAC s sanctions lists, as frequently updated, would enable the insurer to comply with the applicable OFAC regulatory requirements. It also is important to screen the policyholder and beneficiary prior to paying a claim. [01-30-2015]


68. If my screening efforts uncover a policyholder who became a Specially Designated National after policy issuance, can I notify the policyholder that the policy is "blocked"?

Yes, the insurer may notify the policyholder that the policy is blocked, without obtaining a specific license from OFAC. [05-01-2003]


69. In my letter to the policyholder whose policy is "blocked," may I also instruct the policyholder not to send any more premium or that we will not accept additional premium under this account?

The insurer may instruct the policyholder as follows: "If you send any more premium, we are required under applicable U.S. laws and regulations to place such funds in a blocked account. If you have any questions, please contact the U.S. Department of Treasury s Office of Foreign Assets Control." [05-01-2003]


102. How can an insurer participate in worldwide insurance markets through global insurance policies if, by definition, coverage extends to potential risks in sanctioned countries?

The best and most reliable approach for insuring global risks without violating U.S. sanctions law is to insert in global insurance policies an explicit exclusion for risks that would violate U.S. sanctions law. For example, the following standard exclusion clause is often used in open marine cargo policies to avoid OFAC compliance problems: "whenever coverage provided by this policy would be in violation of any U.S. economic or trade sanctions, such coverage shall be null and void." The legal effect of this exclusion is to prevent the extension of a prohibited service (insurance or risk assumption) to sanctioned countries, entities or individuals. It essentially shifts the risk of loss for the underlying transaction back to the insured - the person more likely to have direct control over the economic activity giving rise to the contact with a sanctioned country, entity or individual. [11-16-2007]


103. What if the commercial setting and/or market circumstances of a global insurance policy does not permit the use of an OFAC exclusion such as the one noted above?

OFAC recognizes that U.S. insurers often compete in international markets where non-U.S. insurers are willing and able to issue global insurance policies without a U.S. sanctions exclusion. In cases where such an exclusion is not commercially feasible, the insurer should apply for a specific OFAC license for the global insurance policy. In making a licensing determination, OFAC will review the facts and circumstances of each global insurance policy, including both risk frequency and risk severity, to assure that issuance of the policy will not undermine U.S. foreign policy goals. A separate license would be required for the insurer to pay claims arising under any authorized global insurance policy. [11-16-2007]


104. Can an insurer offer global travel insurance and worldwide travel assistance without violating U.S. sanctions?

The provision of all travel related services are authorized for all OFAC country sanctions programs (including Burma, Iran and Sudan) except Cuba. Travel related services may only be provided in Cuba pursuant to a valid general or specific OFAC license. If the traveler is a U.S. person traveling to Cuba pursuant to a valid OFAC license, travel insurance may be issued to the traveler by a U.S. insurer without a separate license. Similarly, the issuance or provision of coverage for global health, life, or travel insurance policies for individuals ordinarily resident in a country outside of Cuba who travel to or within Cuba is authorized by general license, as is the servicing of such policies and payment of claim arising from events that occurred while the individual was traveling in, or to or from, Cuba. Additionally, insurers should check OFAC s list of Specially Designated Nationals and other sanctions lists to ensure that no prohibited services are rendered to persons or entities on those lists. [01-15-2015]


Sanctions Relating to Insurance, Reinsurance, or Underwriting and the Iran Freedom And Counter-Proliferation Act of 2012

For additional information regarding insurance, reinsurance, and underwriting activities in Iran, please see the following topic.


 

Additional Questions from Financial Institutions

40. If my financial institution receives a wire going to an embassy in a sanctioned country, can we process the transaction?

This depends on the program. If you have a payment involving an embassy in a targeted country, please contact OFAC Compliance for directions (1-800-540-6322). [09-10-2002]


43. Does a financial institution need to scan names against OFAC's list of targets upon account opening or can it wait for 24 hours to receive a report from its software vendor on whether or not there is a hit?

There is no legal or regulatory requirement to use software or to scan. There is a requirement, however, not to violate the law by doing business with a target or failing to block property. OFAC realizes that financial institutions use software that does not always provide an instantaneous response and may require some analysis to determine if a customer is indeed on OFAC's Specially Designated Nationals List (or any of OFAC's other sanctions lists). The important thing is not to conclude transactions before the analysis is completed. [09-10-2002]


44. Is there a dollar limit on which transactions are subject to OFAC regulations?

There is no minimum or maximum amount subject to the regulations. [09-10-2002]


45. Does my bank need to check the OFAC list when selling cashier's checks and money orders? In the case of cashier's checks, do I need to check both the purchaser and the payee? As a mortgage lender, do I need to check both the purchaser and the seller's name against the Specially Designated Nationals list? Do I need to check their names against all of OFAC's other sanctions lists?

Every transaction that a U.S. financial institution engages in is subject to OFAC regulations. If a bank knows or has reason to know that a target is party to a transaction, the bank's processing of the transaction would be unlawful. [09-10-2002]


46. If a loan meets underwriting standards but is a true "hit" on OFAC's Specially Designated Nationals (SDN) list, what do we use as a denial reason on the adverse action notice?

If you have confirmed with OFAC that you have a "good hit" on the SDN list or one of OFAC's other sanctions lists, there is no reason not to explain that to the customer. The customer can contact OFAC directly for further information. [09-10-2002]


47. Through corporate giving programs, many banks contribute toward charities and other non-profits. To what extent does a bank need to review the recipients of these gifts or the principals of the charities?

Donations to charitable institutions must be handled as any other financial transaction. The donating bank or institution should crosscheck the recipient names against OFAC's sanctions lists and assure that the donations are in compliance with OFAC sanctions programs. [09-10-2002]


52. Can U.S. financial institutions open correspondent accounts for Iraqi financial institutions, or process funds transfers to and from Iraqi financial institutions?

Yes, U.S. financial institutions are authorized to open correspondent accounts for, and process funds transfer to or on behalf of Iraqi financial institutions. [07-27-2004]


95. Does a financial institution have the obligation to screen account beneficiaries for compliance with OFAC regulations?

"Property," as defined in OFAC regulations, includes most products that financial institutions offer to their clients. "Property interest," as defined by OFAC, includes any interest whatsoever, direct or indirect, present, future or contingent. Given these definitions and as a matter of sound banking practice, it is prudent for financial institutions to screen account beneficiaries upon account opening, while updating account information, when performing periodic screening and, most definitely, upon disbursing funds. Where there is a property interest of a sanctions target under a blocking program, the property must be blocked. Beneficiaries include, but are not limited to, trustees, children, spouses, non-spouses, entities and powers of attorney. [12-04-2006]


116. On February 14, 2008, OFAC issued guidance stating that the property and interests in property of an entity are blocked if the entity is owned, directly or indirectly, 50% or more by a person whose property and interests in property are blocked pursuant to an Executive Order or regulations administered by OFAC. We act as an intermediary bank in wire transfers between other banks. Does OFAC expect banks that are acting as financial intermediaries to research non-account parties that do not appear on the SDN List, but are involved with or referenced in transactions that are processed on behalf of correspondents?

A wire transfer in which an entity has an interest is blocked property if the entity is 50% or more owned by a person whose property and interests in property are blocked. This is true even in instances where such a transaction is passing through a U.S. bank that (1) is operating solely as an intermediary, (2) does not have any direct relationship with the entity (e.g., the entity is a non-account party), and (3) does not know or have reason to know the entity s ownership or other information demonstrating the blocked status of the entity s property. In instances where all three conditions are met, notwithstanding the blocked status of the wire transfer, OFAC would not expect the bank to research the non-account parties listed in the wire transfer that do not appear on the SDN List and, accordingly, would not pursue an enforcement action against the bank for having processed such a transaction.

If a bank handling a wire transfer currently has information in its possession leading the bank to know or have reason to know that a particular individual or entity involved with or referenced in the wire transfer is subject to blocking, then the bank will be held responsible if it does not take appropriate steps to ensure that the wire transfer is blocked.

OFAC expects banks to conduct due diligence on their own direct customers (including, for example, their ownership structure) to confirm that those customers are not persons whose property and interests in property are blocked.

With regard to other types of transactions where a bank is acting solely as an intermediary and fails to block transactions involving a sanctions target, OFAC will consider the totality of the circumstances surrounding the bank s processing of the transaction, including the factors listed above, to determine what, if any, enforcement action to take against the bank. [01-15-2015]


Securities Industry
335. Firms operating in the securities industry as custodians and securities intermediaries often face the question of how to accurately identify the beneficial owner of assets within an account or transaction. What can these firms do to protect themselves from the risk of directly or indirectly providing services to or dealing in property in which there is an ownership or other interest of parties subject to sanctions?

OFAC encourages firms operating in the securities industry, including securities intermediaries and custodians, to implement measures that mitigate the risk of providing services to, or dealing in property in which there is an ownership or other interest of, parties subject to U.S. sanctions. Such measures should be tailored to and commensurate with the sanctions risk posed by a firm s business activities. Best practices include:

  • Making customers aware of the firm s U.S. sanctions compliance obligations and having customers agree in writing not to use their account(s) with the firm in a manner that could cause a violation of OFAC sanctions. Sanctions may be implicated when the United States is the jurisdiction of issuance or custody of an underlying security or when a U.S. person acts as a custodian or other service provider.

  • Conducting due diligence, including through the use of questionnaires and certifications, to identify customers who do business in or with countries or persons subject to U.S. sanctions. Such customers may warrant enhanced due diligence because of an increased risk that they will use their accounts to hold assets or conduct transactions for third parties subject to sanctions.

  • Imposing restrictions and heightened due diligence requirements on the use of certain products or services by customers who are judged to present a high risk from an OFAC sanctions perspective. Restrictions might include limitations on the use of omnibus accounts, where a lack of transparency can be exploited in order to circumvent OFAC regulations.

  • Making efforts to understand the nature and purpose of non-proprietary accounts, including requiring information regarding third parties whose assets may be held in the accounts. Red flags may arise relating to geographic areas or the nesting of third-party assets.

  • Monitoring accounts to detect unusual or suspicious activity for example, unexplained significant changes in the value, volume, and types of assets within an account. These types of changes may indicate that a customer is facilitating new business for third parties that has not been vetted for possible sanctions implications. [01-23-2014]


Additional Iran-related Questions from Financial Institutions 
 

For additional information regarding Iran, please see the following topic.


Questions on Virtual Currency

559. For purposes of OFAC sanctions programs, what do the terms virtual currency, digital currency, digital currency wallet, and digital currency address mean?

Virtual currency is a digital representation of value that functions as (i) a medium of exchange; (ii) a unit of account; and/or (iii) a store of value; is neither issued nor guaranteed by any jurisdiction; and does not have legal tender status in any jurisdiction.

Digital currency includes sovereign cryptocurrency, virtual currency (non-fiat), and a digital representation of fiat currency.

A digital currency wallet is a software application (or other mechanism) that provides a means for holding, storing, and transferring digital currency. A wallet holds the user s digital currency addresses, which allow the user to receive digital currency, and private keys, which allow the user to transfer digital currency. The wallet also maintains the user s digital currency balance. A wallet provider is a person (individual or entity) that provides the software to create and manage wallets, which users can download. A hosted wallet provider is a business that creates and stores a digital currency wallet on behalf of a customer. Most hosted wallets also offer exchange and payments services to facilitate participation in a digital currency system by users.

A digital currency address is an alphanumeric identifier that represents a potential destination for a digital currency transfer. A digital currency address is associated with a digital currency wallet. [03-19-2018]


560. Are my OFAC compliance obligations the same, regardless of whether a transaction is denominated in digital currency or traditional fiat currency?

Yes, the obligations are the same. U.S. persons (and persons otherwise subject to OFAC jurisdiction) must ensure that they block the property and interests in property of persons named on OFAC s SDN List or any entity owned in the aggregate, directly or indirectly, 50 percent or more by one or more blocked persons, and that they do not engage in trade or other transactions with such persons.

As a general matter, U.S. persons and persons otherwise subject to OFAC jurisdiction, including firms that facilitate or engage in online commerce or process transactions using digital currency, are responsible for ensuring that they do not engage in unauthorized transactions prohibited by OFAC sanctions, such as dealings with blocked persons or property, or engaging in prohibited trade or investment-related transactions. Prohibited transactions include transactions that evade or avoid, have the purpose of evading or avoiding, cause a violation of, or attempt to violate prohibitions imposed by OFAC under various sanctions authorities. Additionally, persons that provide financial, material, or technological support for or to a designated person may be designated by OFAC under the relevant sanctions authority.

Persons including technology companies; administrators, exchangers, and users of digital currencies; and other payment processors should develop a tailored, risk-based compliance program, which generally should include sanctions list screening and other appropriate measures. An adequate compliance solution will depend on a variety of factors, including the type of business involved. There is no single compliance program or solution suitable for every circumstance. [03-19-2018]


561. How will OFAC use its existing authorities to sanction those who use digital currencies for illicit purposes?

The United States whole-of-government strategies to combat global threats such as terrorism, transnational organized crime, malicious cyber activity, narcotics trafficking, weapons of mass destruction (WMD) proliferation, and human rights abuses include targeting an array of activities, including the use of digital currencies or other emerging payment systems to conduct proscribed financial transactions and evade U.S. sanctions. The strategies draw from a broad range of tools and authorities to respond to the growing and evolving threat posed by malicious actors using new payment mechanisms. OFAC will use sanctions in the fight against criminal and other malicious actors abusing digital currencies and emerging payment systems as a complement to existing tools, including diplomatic outreach and law enforcement authorities. To strengthen our efforts to combat the illicit use of digital currency transactions under our existing authorities, OFAC may include as identifiers on the SDN List specific digital currency addresses associated with blocked persons. [03-19-2018]


562. How will OFAC identify digital currency-related information on the SDN List?

OFAC may add digital currency addresses to the SDN List to alert the public of specific digital currency identifiers associated with a blocked person. OFAC s digital currency address listings are not likely to be exhaustive. Parties who identify digital currency identifiers or wallets that they believe are owned by, or otherwise associated with, an SDN and hold such property should take the necessary steps to block the relevant digital currency and file a report with OFAC that includes information about the wallet s or address s ownership, and any other relevant details. [03-19-2018]


563. What is the structure of a digital currency address on OFAC s SDN List?

Digital currency addresses listed on the SDN List include their unique alphanumeric identifier (up to 256 characters) and identify the digital currency to which the address corresponds (e.g., Bitcoin (XBT), Ethereum (ETH), Litecoin (LTC), Neo (NEO), Dash (DASH), Ripple (XRP), Iota (MIOTA), Monero (XMR), and Petro (PTR)). Each digital currency address listed on the SDN list will have its own field: the structure will always begin with Digital Currency Address , followed by a dash and the digital currency s symbol (e.g., Digital Currency Address - XBT , Digital Currency Address - ETH ). This information is followed by the unique alphanumeric identifier of the specific address. [06-06-2018]


594. Is it possible to query a digital currency address using OFAC s Sanctions List Search tool?

No, it is not currently possible to query for digital currency addresses using OFAC s Sanctions List Search tool. Alternatively, OFAC's SDN List and other OFAC sanctions lists are available in a number of file formats and downloads, which can be used to identify and screen for listed digital currency addresses. Additional information on OFAC list file formats and downloads, can be accessed here. [06-06-2018]


646. How do I block digital currency? 

Once it has been determined that your institution is holding digital currency that is required to be blocked pursuant to OFAC s regulations, you must ensure that access to that digital currency is denied to the blocked person and that your institution complies with OFAC regulations related to blocked assets.  Institutions may choose, for example, to block each digital currency wallet associated with the digital currency addresses that OFAC has identified as being associated with blocked persons, or opt to use its own wallet to consolidate wallets that contain the blocked digital currency (similar to an omnibus account) titled, for example, Blocked SDN Digital Currency.  Each of these methods is satisfactory, so long as there is an audit trail that will allow the digital currency to be unblocked only when the legal prohibition requiring the blocking of the digital currency ceases to apply.  The institution is not obligated to convert the blocked digital currency into traditional fiat currency (e.g., U.S. dollars).  Blocked digital currency must be reported to OFAC within 10 business days.  Questions about whether a transaction should be blocked should be directed to OFAC at 202-622-2490 or ofac_feedback@treasury.gov. [11-28-2018]


647. Should an institution tell its customer that it blocked access to their digital currency and, if so, how does the institution explain it to the customer?

An institution may notify its customer that it has blocked digital currency pursuant to OFAC regulations.  The customer has the right to apply for the unblocking and release of the digital currency.

To apply online to have the virtual currency released, please go to OFAC s online application page. [11-28-2018]


 

Specially Designated Nationals (SDNs) and the SDN List

18. What is an SDN?

As part of its enforcement efforts, OFAC publishes a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific. Collectively, such individuals and companies are called "Specially Designated Nationals" or "SDNs." Their assets are blocked and U.S. persons are generally prohibited from dealing with them. [09-10-2002]


19. How do I get a copy of the Specially Designated Nationals (SDN) List?

The best way to get the SDN list is from OFAC's website. The list is disseminated in a number of different formats, including XML and fixed field/delimited files that can be integrated into databases. [05-03-2018]


20. How often is the Specially Designated Nationals (SDN) List updated?

The SDN list is frequently updated. There is no predetermined timetable, but rather names are added or removed as necessary and appropriate. [09-10-2002]


21. How do I know what specific changes have been made to OFAC's Specially Designated Nationals (SDN) List?

All changes for the current calendar year are cumulatively available in a .PDF file and in a text version.  The entire list may also be browsed using OFAC's Sanctions List Search Tool .  Cumulative changes for prior years back to 1994 are also available in ASCII format by following this link. The same link will take you to a *.PDF version of the file for calendar years back to 2001. [05-03-2018]


23. What do I do if I have a match to the Specially Designated Nationals (SDN) or one of OFAC's other sanctions lists?

If you have checked a name manually or by using software and find a match, you should do a little more research. Is it an exact name match, or very close? Is your customer located in the same general area as the SDN or another entry on one of OFAC's sanctions lists? If not, it may be a "false hit." If there are many similarities, contact OFAC's "hotline" at 1-800-540-6322 for verification. If your "hit" concerns an in-process wire transfer, you may prefer to e-mail your question to OFAC. Unless a transaction involves an exact match, it is recommended that you contact OFAC Compliance before actually blocking assets. [09-10-2002]


466. How do I verify if a name was removed from one of OFAC s sanctions lists?  How do I find the date a Specially Designated National (or other sanctions target) was added to, updated, or removed from an OFAC list?

For historical information about names that have been added to, updated, or removed from OFAC s Specially Designated Nationals List or one of OFAC s other sanctions lists, please see our Archive of Changes page. Designation, removal, and update information is organized chronologically by list and by year.

In addition, all changes to OFAC s lists are announced on OFAC s recent actions pages and OFAC maintains all of its recent actions records going back to 2001.  Users can now search the entire collection of recent actions notices by using the search field at the top of this page. [04-18-2017]

56. What is the difference between the Specially Designated Nationals (SDN) List and the Commerce Department's List of Denied Parties? Why can't they be integrated into one list? What about OFAC's other sanctions lists?

SDNs are individuals and entities located throughout the world that are blocked pursuant to the various sanctions programs administered by OFAC. SDNs can be front companies, parastatal entities, or individuals determined to be owned or controlled by, or acting for or on behalf of, targeted countries or groups. They also can be specially identified individuals such as terrorists or narcotics traffickers. U.S. persons are prohibited from engaging in any transactions with SDNs and must block any property in their possession or under their control in which an SDN has an interest. SDNs are designated primarily under the statutory authority of the Trading With the Enemy Act, the International Emergency Economic Powers Act, the Anti-Terrorism and Effective Death Penalty Act and the Foreign Narcotics Kingpin Designation Act. OFAC also administers several other sanctions lists including the Foreign Sanctions Evaders (FSE) List and the Sectoral Sanctions Identifications (SSI) List. U.S. persons are not required to block the property of individuals and entities on these FSE and SSI lists (unless the targets are also on the SDN list), but other prohibitions and investment restrictions apply.

The Bureau of Industry and Security ("BIS") of the U.S. Department of Commerce maintains separate lists for the purposes of the programs that it administers (including the Denied Persons List and the Entity List). The Denied Persons List consists of individuals and companies that have been denied export and reexport privileges by BIS. The Entity List consists of foreign end users who pose an unacceptable risk of diverting U.S. exports and the technology they contain to alternate destinations for the development of weapons of mass destruction. Accordingly, U.S. exports to those entities may require a license. Authority for the Denied Persons List and the Entity List can be found in Title 15, Part 764, Supplement No. 2 and Title 15, Part 744, Supplement No.4 of the U.S. Code of Federal Regulations, respectively.

The foreign policy objectives and legal requirements of OFAC's lists are significantly different from those of the BIS lists. The unique goals of the OFAC and BIS programs preclude the creation of a combined OFAC and BIS list. [01-30-2015]


 

 

Information on List File Formats and Downloads

79. Does OFAC provide its Specially Designated Nationals (SDN) List in a format that can be easily imported into a database?

Yes. OFAC's SDN list is available in XML, fixed-field and delimited formats that can be imported into a variety of software programs. [12-19-2007]


80. Does OFAC provide its Specially Designated Nationals (SDN) List in a spreadsheet format?

OFAC publishes the SDN data in a comma separated values format (CSV). This format is recognized by Excel and other spreadsheet programs and can be imported into spreadsheet format by simply opening the file in your default spreadsheet application. [06-14-2007]


422. How do I get a copy of one or more of OFAC s other sanctions lists (in addition to the Specially Designated Nationals list)?

OFAC maintains other sanctions lists in addition to its Specially Designated Nationals (SDN) list. The names on these lists may also appear on the SDN list when such targets have a blocking provision associated with them. However, when the treatment of sanctions targets is unique and stops short of the blocking treatment, these names will appear on the one of OFAC's non-SDN lists. Links to the human-readable versions of these lists can be found here. Data versions of these lists are now being disseminated in a single, consolidated data file (known as the Consolidated Sanctions List). These data files can be found here. [02-02-2015]


81. What is the delimiter in OFAC's delimited files?

The delimiter varies based upon the file type. Files that end in .DEL have an @ (at) symbol as the delimiter. Files that end in .CSV have a comma delimiter. Files that end in .FF have a fixed width delimiter. Files that end in .PIP use the | (pipe) symbol as a delimiter. [06-14-2007]


83. How are OFAC's delimited files structured?

All of OFAC's delimited files are described in OFAC's SDN data file specification guide and non-SDN data specification guide. In addition, OFAC published the following tutorial on how to construct a basic relational database using OFAC s delimited list files. [04-21-2015]


84. Does OFAC maintain its files on an FTP server or in locations other than on its website?  Does OFAC provide its files via Secure FTP (SFTP)?

Yes. OFAC maintains many of its sanctions list files on an FTP server.

This server can be accessed at: ftp://ofacftp.treas.gov.

The server will accept an anonymous login. OFAC's data is stored in the directories listed below.  OFAC does not currently support connections to this server via SFTP.

/fac_sdn - SDN human-readable lists, legacy zip archive (XML and delimited files), and the advanced zip archive (advanced XML file)

/fac_delim - SDN data files (advanced XML file, legacy XML file, legacy delimited files) in un archived format

/ssi_list - All Sectoral Sanctions List files

/fse_list - All Foreign Sanctions Evaders List files

/ns_plc - All Non-SDN Palestinian Legislative Council Lists files

/consolidated_list - All Consolidated Non-SDN List data files [04-13-2017]


85. Is there a version of the Specially Designated Nationals (SDN) data file archive that works with UNIX, Linux or other command line operating systems?

Yes. The standard zip archive should work with most UNIX and Linux systems and is available on OFAC's website at https://www.treasury.gov/ofac/downloads/sdall.zip and its FTP site at ftp://ofacftp.treas.gov in the folder /fac_sdn. [08-06-2014]


87. Your FTP site has gone offline. Who should I contact to remedy this problem?

The FTP site at ofacftp.treas.gov is run by OFAC. Contact OFAC's support hotline at 1-800-540-6322 for technical support. [08-06-2014]


88. I am a developer looking to design an automated process that will download OFAC's Specially Designated Nationals (SDN) list and other sanctions lists without human intervention. How can I do this given that changes to the sanctions lists can be sporadic?

OFAC cannot give specific advice on how to design an automated system for downloading its sanctions list data. Many institutions solve this problem by setting up a scheduled download of the SDN List and other sanctions lists. These firms conduct their own risk assessments and decide how often they need to download the lists in order to comply with U.S. law. Institutions should be aware that OFAC is updating its sanctions lists at an ever increasing pace. If an institution has set up a periodic download schedule, the institution should occasionally reevaluate that schedule to ensure that it remains an effective risk mitigation technique. [01-30-2015]


89. I am a database administrator at a financial institution and am responsible for keeping my company's Specially Designated Nationals (SDN) data current. Is the SDN list comprehensive or do I need to download some kind of supplement to the list every time there is an update?

The SDN list is comprehensive. Database administrators can overwrite any old data in their systems with the latest versions of the list's data files, thus ensuring that their database is current. [09-10-2002]


90. Do you offer a Specially Designated Nationals (SDN) changes file or "delta file" in a data format? Do you offer delta files for OFAC's other sanctions lists?

No. OFAC records changes to the SDN and other sanctions lists in human-readable form in the recent actions section of its website. An archive of changes files found on this page. Database administrators interested in refreshing their databases with new SDN and other sanctions list data should use the comprehensive data files available on OFAC's website and completely refresh the list. [10-08-2013]


22. Does OFAC maintain or can it create a country-by-country list of Specially Designated Nationals (SDNs)?

OFAC has long maintained such a list. The file is available on OFAC's SDN Page under the link "SDN List Sorted by Country." The file is also contained within the SDALL.ZIP archive and is called ctrylst.txt. It is important to understand that many SDN individuals and entities may operate in countries other than those in which they are based. The relevant regulations prohibit transactions with and/or block the property of SDNs wherever they are located. [04-14-2014]


105. OFAC says it has updated its Specially Designated Nationals (SDN) list, but when I download the appropriate SDN files from the OFAC website, they appear to be out-of-date. Where can I get the latest SDN information?

OFAC has rigorous quality control procedures in place to ensure that all SDN data are current and accurate when they are released (including all of its human-readable list formats [in PDF and text]). All of the SDN information is downloaded and checked by OFAC personnel using the same interface that any member of the public might employ. A number of local issues can impact a user s ability to download current information; many of these issues are associated with caching done by a user s browser or by the firewall/security systems that protect a specific enterprise. OFAC can only offer technical support when it comes to OFAC provided data and OFAC managed systems (like the OFAC website or OFAC FTP servers). If you continue to have difficulty downloading the latest SDN information, OFAC recommends that you contact your internal IS/IT support and request their assistance in resolving a caching issue.  [05-08-2018]

 


Advanced XML Sanctions List Standard

 

For additional information regarding OFAC's Advanced XML file formats, please see the following page.


 

Weak Aliases

122. What are weak aliases (AKAs)?

A "weak AKA" is a term for a relatively broad or generic alias that may generate a large volume of false hits when such names are run through a computer-based screening system.  OFAC includes these AKAs because, based on information available to it, the sanctions targets refer to themselves, or are referred to, by these names. As a result, these AKAs may be useful for identification purposes, particularly in confirming a possible "hit" or "match" triggered by other identifier information. Realizing, however, the large number of false hits that these names may generate, OFAC qualitatively distinguishes them from other AKAs by designating them as weak. OFAC has instituted procedures that attempt to make this qualitative review of aliases as objective as possible. Before issuing this updated guidance, OFAC conducted a review of all aliases on the Specially Designated Nationals (SDN) list. Each SDN alias was run through a computer program that evaluated the potential of an alias to produce false positives in an automated screening environment. Names were evaluated using the following criteria:

  1. Character length (shorter strings were assumed to be less effective in a screening environment than longer strings);
  2. The presence of numbers in an alias (digits 0-9);
  3. The presence of common words that are generally considered to constitute a nickname (example: Ahmed the Tall);
  4. References in the alias to geographic locations (example: Ahmed the Sudanese);
  5. The presence of very common prefixes in a name where the prefix was one of only two strings in a name (example: Mr. Smith).

Aliases that met one or more of the above criteria were flagged for human review. OFAC subject matter experts then reviewed each of the automated recommendations and made final decisions on the flagging of each alias.

OFAC intends to use these procedures to evaluate all new aliases added to its sanctions lists. [01-18-2011]


123. Where can I find weak aliases (AKAs)?

Weak AKAs appear differently depending on which file format of the sanctions list is being utilized.

In the TXT and PDF versions of the Specially Designated Nationals (SDN) or other sanctions lists, weak AKAs are encapsulated in double-quotes within the AKA listing:

ALLANE, Hacene (a.k.a. ABDELHAY, al-Sheikh; a.k.a. AHCENE, Cheib; a.k.a. "ABU AL-FOUTOUH"; a.k.a. "BOULAHIA"; a.k.a. "HASSAN THE OLD"); DOB 17 Jan 1941; POB El Menea, Algeria (individual) [SDGT]

In the DEL, FF, PIP, and CSV file formats, weak AKAs are listed in the Remarks field (found at the end of the record) of the primary name file. In these formats, weak AKAs are bracketed by quotation marks. Please see the data specification documents for more information on the SDN and Consolidated lists.

8219 @"ALLANE, Hacene"@"individual"@"SDGT"@-0- @-0- @-0- @-0- @-0- @-0-@-0- @"DOB 17 Jan 1941; POB El Menea, Algeria; a.k.a. 'ABU AL-FOUTOUH'; a.k.a. 'BOULAHIA'; a.k.a. 'HASSAN THE OLD'."

In the legacy XML version of OFAC's sanctions lists, there is a Type element for each AKA.  The Type can either be 'weak' or 'strong' (see the XML SDN and Consolidated List Schemas (XSD files) at: /system/files/126/sdn.xsd and https://www.treasury.gov/ofac/downloads/consolidated/consolidated.xsd for more information).

In the advanced XML list standard, alias quality is represented as a Boolean attribute of the alias element. This attribute, "LowQuality" can be flagged as either "true" or "false." If the LowQuality attribute is false then the alias is strong. If the LowQuality attribute is true then the alias is weak.

For more information on the advanced XML standard, please visit OFAC s SDN data formats page at /policy-issues/financial-sanctions/specially-designated-nationals-list-data-formats-data-schemas. [01-30-2015]


124. Am I required to screen for weak aliases (AKAs)?

OFAC s regulations do not explicitly require any specific screening regime. Financial institutions and others must make screening choices based on their circumstances and compliance approach. As a general matter, though, OFAC does not expect that persons will screen for weak AKAs, but expects that such AKAs may be used to help determine whether a hit arising from other information is accurate. [01-18-2011]


125. Will I be penalized for processing an unauthorized transaction involving a weak alias (AKA)?

A person who processes an unauthorized transaction involving a sanctions list entry has violated U.S. law and may be subject to an enforcement action.  Generally speaking, however, if (i) the only sanctions reference in the transaction is a weak AKA, (ii) the person involved in the processing had no other reason to know that the transaction involved an entry on one of OFAC's sanctions lists or was otherwise in violation of U.S. law, and (iii) the person maintains a rigorous risk-based compliance program, OFAC will not issue a civil penalty against an individual or entity for processing such a transaction.  [01-18-2011]

CISADA (Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010)

149. What activities by foreign financial institutions can subject them to CISADA sanctions?

As described in the Iranian Financial Sanctions Regulations, the sanctionable activities of a foreign financial institution are:

  • Facilitating the efforts of the Government of Iran (GOI) to acquire or develop Weapons of Mass Destruction (WMD) or delivery systems for WMD or to provide support for terrorist organizations or acts of international terrorism;

  • Facilitating the activities of a person subject to financial sanctions pursuant to UNSCRs 1737, 1747, 1803, or 1929, or any other Security Council resolution that imposes sanctions with respect to Iran;

  • Engaging in money laundering, or facilitating efforts by the Central Bank of Iran or any other Iranian financial institution, to carry out either of the facilitating activities described above; or

  • Facilitating a significant transaction or transactions or providing significant financial services for: (i) the Islamic Revolutionary Guard Corps or any of its agents or affiliates whose property and interests in property are blocked pursuant to the International Emergency Economic Powers Act (IEEPA), or (ii) a financial institution whose property and interests in property are blocked pursuant to IEEPA in connection with Iran s proliferation of WMD, Iran s proliferation of delivery systems for WMD, or Iran s support for international terrorism.

 


150. Where can I find a list of Islamic Revolutionary Guard Corps (IRGC) affiliates and Iran-linked financial institutions blocked pursuant to the International Emergency Economic Powers Act (IEEPA) ?

The list of blocked IRGC affiliates and blocked Iran-linked financial institutions is dynamic and is based on the identity of designated persons, which refers both to natural persons (i.e., individuals) and legal persons (such as corporations and other entities). The most recent list of designated persons which includes most, but not all, blocked entities* can be found at this link. The listings of designated IRGC entities will be followed by the tag [IRGC]; those of designated Iran-linked financial institutions will have the tag [IFSR].

*Under Department of the Treasury regulations, designated persons are those that are named on the list. All interests in property of such persons are blocked, and such persons are considered to have an interest in all property and entities in which they own, directly or indirectly, a 50 percent or greater interest. As a result, such property and entities are also blocked, even if they do not themselves appear on the list.


151. How do the Iranian Financial Sanctions Regulations (IFSR) define U.S. financial institutions ?

The Iranian Financial Sanctions Regulations (IFSR) define U.S. financial institutions to include: depository institutions, banks, savings banks, money service businesses, trust companies, insurance companies, securities brokers and dealers, commodities exchanges, clearing corporations, investment companies, employee benefit plans, and U.S. holding companies, U.S. affiliates, or U.S. subsidiaries of any of these entities. Covered institutions include those branches, offices, and agencies of foreign financial institutions that are located in the United States.


152. How do the Iranian Financial Sanctions Regulations (IFSR) define foreign financial institutions ?

The Iranian Financial Sanctions Regulations (IFSR) define foreign financial institutions to include foreign depository institutions, banks, savings banks, money service businesses, trust companies, securities brokers and dealers, commodities exchanges, clearing corporations, investment companies, employee benefit plans, and holding companies, affiliates, or subsidiaries of any of these entities.


153. How do the Iranian Financial Sanctions Regulations (IFSR) define the term knowingly ?

The term knowingly as used in the IFSR means that a person has actual knowledge or should have known of specific conduct, a circumstance, or a result. In other words, the IFSR could be implicated if the Treasury Department finds that a foreign financial institution knew or should have known that it engaged in one or more of the sanctionable activities.


154. How does the Treasury Department determine whether a transaction or financial service is significant for purposes of the Iranian Financial Sanctions Regulations (IFSR)?

As set out in the IFSR, in determining whether a transaction or financial service is significant, the Treasury Department may consider: (1) the size, number, frequency, and nature of the transaction(s); (2) the level of awareness of management of the transaction(s) and whether or not the transaction(s) are a part of a pattern of conduct; (3) the nexus between the foreign financial institution involved in the transaction(s) and a blocked Islamic Revolutionary Guard Corps individual or entity or blocked Iran-linked financial institution; (4) the impact of the transaction(s) on the goals of  the Comprehensive Iran Sanctions, Accountability, and Divestment Act  (CISADA); (5) whether the transaction(s) involved any deceptive practices; and (6) other factors the Treasury Department deems relevant on a case-by-case basis.


155. When are the prohibitions and strict conditions on foreign financial institutions correspondent accounts or payable-through accounts in the United States effective?

A finding by the Treasury Department that a foreign financial institution knowingly engages in one or more of the sanctionable activities is necessary before the Treasury Department can prohibit or impose strict conditions on the opening or maintaining in the United States of correspondent accounts or payable-through accounts for that foreign financial institution.


156. How will U.S. and foreign financial institutions know that the Treasury Department has made such a finding?

As a general matter, the Treasury Department will reach out to foreign financial institutions to inquire about their conduct before making a finding. If the Treasury Department decides to impose strict condition(s), the Treasury Department will issue an order or a regulation that sets out the strict condition(s) to be imposed on the U.S. correspondent accounts or U.S. payable-through accounts of the relevant foreign financial institution and publish the order or regulation in the Federal Register. The Federal Register is available at www.gpo.gov/fdsys/. If the Treasury Department decides to prohibit the opening or maintaining of U.S. correspondent accounts or U.S. payable-through accounts for a foreign financial institution, the Treasury Department will add the name of the foreign financial institution and publish it to the part 561 list.


157. How will the Treasury Department enforce the Iranian Financial Sanctions Regulations (IFSR) with respect to U.S. entities?

Any U.S. person who violates the correspondent account provisions of the IFSR may be subject to civil penalties of up to the greater of $250,000 or twice the transaction value, and criminal penalties for willful violations of up to $1 million and 20 years in prison. A U.S. financial institution may be subject to civil penalties of up to the greater of $250,000 or twice the transaction value, if any person that it owns or controls violates the IFSR prohibition on engaging in any transaction with or benefitting the Islamic Revolutionary Guard Corps (IRGC) or any of its agents or affiliates whose property and interests in property are blocked pursuant to the International Emergency Economic Powers Act (IEEPA), and if the U.S. financial institution knew or should have known that the person violated the IFSR.


158. Can the application of any part(s) of the Iranian Financial Sanctions Regulations (IFSR) be waived by the Department of the Treasury?

The Comprehensive Iran Sanctions, Accountability, and Divestment Act  (CISADA) provides for a waiver of the sanctions under the Iranian Financial Sanctions Regulations (IFSR)  if the Secretary of the Treasury determines that a waiver is necessary to the national interest of the United States.


159. Where can I find the text of the Iranian Financial Sanctions Regulations?

The text of the Iranian Financial Sanctions Regulations (IFSR) can be found at this link.


Executive Order 13599 (Blocking Property of the Government of Iran and Iranian Financial Institutions)

On February 5, 2012, the President signed Executive Order 13599  to implement section 1245(c) of the National Defense Authorization Act for Fiscal Year 2012, Public Law 112-81 ( NDAA ) and to take additional steps with respect to Iran. Effective as of 12:01 a.m. eastern standard time on February 6, 2012, the order blocks all property and interests in property of the Government of Iran (including the Central Bank of Iran), all Iranian financial institutions, and all persons determined by the Secretary of the Treasury, in consultation with the Secretary of State, to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to the order. [02-06-2012]


160. Section 1 of E.O. 13599 blocks all property and interests in property of the Government of Iran, including the Central Bank of Iran, and of all Iranian financial institutions, that are in the United States, that come within the United States, or that come within the possession or control of U.S. persons (including overseas branches). Can you provide further clarification about this provision of E.O. 13599?

E.O. 13599 requires U.S. persons to block (i.e., freeze) all property and interests in property of the Government of Iran, including the Central Bank of Iran, and of all Iranian financial institutions, which also includes the Central Bank of Iran. This means that all individuals and entities that meet the definition of Government of Iran ( GOI ) as defined by section 7(d) of the new E.O. as well as all Iranian financial institutions (whether or not they meet the definition of the GOI) are now blocked. Previously, under the Iranian Transactions Regulations, 31 C.F.R. part 560 (the ITR ), financial institutions and other U.S. persons were prohibited from engaging in transactions with the GOI. Under those prior rules, U.S. financial institutions receiving instructions to execute transactions involving these entities were not required to block the transactions, but were instead required to reject those instructions rather than carry them out, unless the transactions were exempt, authorized, or not prohibited by OFAC. The Executive Order defines an Iranian financial institution as a financial institution organized under the laws of Iran or any jurisdiction within Iran (including foreign branches), any financial institution in Iran, any financial institution, wherever located, owned or controlled by the Government of Iran, and any financial institution, wherever located, owned or controlled by any of the aforementioned entities.

As a result, transactions involving entities bearing the [IRAN] tag on OFAC s List of Specially Designated Nationals and Blocked Persons ( SDN List ) will now need to be blocked unless exempt or authorized by OFAC. Going forward, the [IRAN] tag will connote that a person or entity meets the definition of the term GOI or Iranian Financial Institution . OFAC will continue to update the SDN List and may add, delete, or edit entries as appropriate.

E.O. 13599 blocks the property and interests in property of any individual or entity that comes within its definition of the term Government of Iran regardless of whether it is listed on the SDN List, and similarly it blocks the property and interests in property of all Iranian financial institutions as defined in the order regardless of whether the Iranian financial institution is listed on the SDN List.

E.O. 13599 builds upon the prohibitions in the ITR, which remain in effect.

Please note, pursuant to OFAC guidance, even when an entity does not itself appear on the SDN List or otherwise meet the definition of the GOI or an Iranian financial institution, the property and interests in property of that entity are blocked if the entity is owned, directly or indirectly, 50% or more by a person whose property and interests in property are blocked pursuant to an Executive Order or regulations administered by OFAC. [02-06-2012]


161. If all property and interests in property of the Government of Iran, including the Central Bank of Iran, and of all Iranian financial institutions are blocked, can I conduct transactions involving the Government of Iran that have been previously authorized by OFAC?

Generally yes. Under new General License A, almost all transactions that are authorized under existing general licenses issued pursuant to the Iranian Transactions Regulations (ITR) or under existing OFAC specific licenses will continue to be authorized under the authority of  E.O. 13599. However, transactions previously authorized under one existing ITR general license are not authorized pursuant to E.O. 13599. Specifically, the closing of accounts of the Government of Iran or an Iranian financial institution and the lump sum transfer of the balances to an account outside of the United States, which is authorized by sections 560.517(a)(3) & (b)(2) of the ITR, is not authorized by General License A, and, therefore, those transactions are prohibited by E.O. 13599 and the accounts must be blocked. In addition, General License A does not authorize any payments from blocked funds or debits to blocked accounts, with a limited exception for payments from funds or debits to accounts blocked under the Iranian Assets Control Regulations (the hostage crisis blocking program that began in 1979) that are authorized by specific licenses issued by OFAC.

New General License B authorizes U.S. depository institutions and U.S. registered brokers or dealers in securities to process noncommercial, personal remittances, to or from Iran, or for or on behalf of individuals ordinarily resident in Iran who are not included in the term Government of Iran , provided that such funds transactions are not made by, to, or through a financial institution blocked pursuant to the Weapons of Mass Destruction Proliferators Sanctions Regulations, 31 C.F.R. part 544 (the WMDPSR ), or the Global Terrorism Sanctions Regulations, 31 C.F.R. part 594 (the GTSR ), or a person whose property and interests in property are blocked pursuant to any other part of 31 C.F.R. chapter V, or any Executive order, except an Iranian financial institution whose property and interests in property are blocked solely pursuant to E.O. 13599.

Transactions not previously authorized by OFAC that involve property or interests in property of the Government of Iran, including the Central Bank of Iran, or of Iranian financial institutions must be blocked. [02-06-2012]


162. Are U.S. persons still required to comply with the Iranian Transactions Regulations (ITR)?

Yes.  E.O. 13599 builds upon the prohibitions of the ITR, and the prohibitions of the ITR remain in effect. [02-06-2012]


163. What are the differences and similarities between E.O. 13599 and the Iranian Transactions Regulations (ITR)?

The ITR prohibits virtually all direct or indirect transactions involving Iran or the Government of Iran by U.S. persons or with a nexus to the United States, unless otherwise authorized by OFAC or exempted by statute, but they do not contain blocking provisions. E.O. 13599 requires U.S. persons to block all property and interests in property of the Government of Iran, including the Central Bank of Iran, and of Iranian financial institutions, which also includes the Central Bank of Iran, unless it relates to a transaction that is exempted by statute or authorized by OFAC.

To illustrate the difference between how a transaction would be treated under the ITR and the new E.O., imagine a commercial wire transfer being processed through the U.S. financial system by order of a third-country, non-U.S. company for credit to a third-country financial institution in favor of a correspondent account it maintains for an Iranian financial institution. The transaction is not exempt or authorized by a general or specific license, and the Iranian bank is not blocked pursuant to the GTSR or the WMDPSR. Previously, under the ITR, any U.S. financial institution handling the transaction would have needed to reject the payment because allowing it to be processed would constitute a prohibited exportation of services to Iran. With the new E.O. in place, the U.S. financial institution would be required to block ( freeze ) that transaction. [02-06-2012]


164. The Iranian Transactions Regulations (ITR) authorize U.S. depository institutions and U.S. registered brokers or dealers in securities to process transfers of funds to or from Iran if the transfer is a non-commercial, personal remittance. Are U.S. depository institutions and U.S. registered brokers or dealers in securities still authorized to process such payments to or from a Government of Iran-owned bank that is not otherwise designated pursuant to another part of 31 C.F.R. Chapter V?

General License B under E.O. 13599 authorizes U.S. depository institutions and U.S. registered brokers or dealers in securities to process noncommercial, personal remittances to or from Iran provided that the payment is not made by, to, or through a financial institution designated by OFAC under the WMDPSR, or the GTSR, or a person whose property and interests in property are blocked pursuant to any other part of 31 C.F.R. chapter V, or any Executive order, except an Iranian financial institution whose property and interests in property are blocked solely pursuant to E.O. 13599. Exempt or authorized transactions to or from Iran may also be processed subject to the above conditions.

Such transactions must be processed through a third country, as U.S. banks are prohibited from operating correspondent accounts for Iranian banks. The transactions may involve the use of blocked Iranian financial institutions as long as the Iranian financial institution is blocked solely pursuant to E.O. 13599 (and not pursuant to any other Executive order or part of 31 C.F.R. chapter V) and there is a third-country, non-U.S. financial institution as an intermediary between the U.S. financial institution and the Iranian financial institution. [02-06-2012]


165. To what extent are U.S. persons expected to conduct enhanced due diligence to determine if transactions contain a Government of Iran interest?

E.O. 13599 requires U.S. persons to block all property and interests in property of the Government of Iran, unless otherwise exempt or authorized by OFAC.

Please contact the OFAC Hotline at 202-622-2490 or 1-800-540-6322, or by email at OFAC_Feedback@treasury.gov, for guidance regarding entities that you suspect are owned or controlled by the Government of Iran that do not appear on the SDN List. As a general matter, OFAC expects financial institutions to conduct due diligence on their own direct customers (including, for example, their ownership structure) to confirm that those customers are not persons whose property and interests in property are blocked.

With regard to other types of transactions where a financial institution is acting solely as an intermediary and fails to block transactions involving a sanctions target, OFAC will consider the totality of the circumstances surrounding the bank s processing of the transaction to determine what, if any, regulatory response is appropriate. [02-06-2012]


166. OFAC s SDN List contains a list of entities identified by OFAC as being the Government of Iran. Should U.S. persons now block the property and interests in property of those entities?

Yes, U.S. persons should now block the property and interests in property of the Government of Iran entities appearing on the SDN List, unless OFAC has authorized the underlying transaction or the transaction is exempt. [02-06-2012]


167. OFAC has granted my company a license under the Trade Sanctions Reform and Export Enhancement Act of 2000 ( TSRA ) and the Iranian Transactions Regulations  (ITR). Can I continue to conduct the licensed transaction?

Under General License A issued pursuant to E.O. 13599, transactions authorized under existing specific licenses issued pursuant to TSRA and the  ITR are authorized under E.O. 13599 until the specific license expires, per the terms of the license. [02-06-2012]


168. OFAC has issued me a (non-TSRA) specific license related to Iran, or the Government of Iran. Can I continue to conduct the licensed transactions?

Under General License A issued pursuant to E.O. 13599, transactions authorized by (non-TSRA) specific licenses issued prior to the issuance of E.O. 13599 and issued pursuant to any part of 31 C.F.R. chapter V are also authorized under E.O. 13599. As set forth in General License A, in most cases these new authorizations under E.O. 13599 are in effect until theexpiration date of the individual specific license, or, if the specific license has no expiration date, until April 6, 2012. [02-06-2012]


 

NDAA (Section 1245 of the National Defense Authorization Act for Fiscal Year 2012)

On December 31, 2011, the President signed into law the National Defense Authorization Act for Fiscal Year 2012, Public Law 112-81 ( NDAA ). Section 1245 of this statute requires the President to block the property and interests in property subject to U.S. jurisdiction of all Iranian financial institutions, including the Central Bank of Iran ( CBI ). It also aims to reduce Iranian oil revenues and discourage transactions with the CBI by providing for sanctions on foreign financial institutions that knowingly conduct or facilitate certain significant financial transactions with the CBI. Although the sanctions on foreign financial institutions authorized by section 1245 are similar to the financial sanctions under the Comprehensive Iran Sanctions, Accountability, and Divestment Act  of 2010 (22 U.S.C. 8513(c)) ( CISADA ) (i.e., prohibiting and/or imposing strict conditions on opening or maintaining correspondent accounts or payable-through accounts in the United States), there are differences in the scope and operation of the two statutes. [02-14-2012]


169. What is the NDAA?

On December 31, 2011, the President signed into law the National Defense Authorization Act (NDAA). Section 1245 of the NDAA requires the President to block the property and interests in property subject to U.S. jurisdiction of all Iranian financial institutions, including the Central Bank of Iran (CBI). It also aims to reduce Iranian oil revenues and discourage transactions with the CBI by providing for sanctions on foreign financial institutions that knowingly conduct or facilitate certain significant financial transactions with the CBI. [02-14-2012]


170. What activities can trigger sanctions on a foreign financial institution under the NDAA?

For private financial institutions, the Act mandates that the President sanction those institutions that are found to knowingly conduct or facilitate any significant transactions with a U.S.-designated Iranian financial institution or with the Central Bank of Iran (CBI) whether for the purchase of petroleum or otherwise unless the transaction is for the sale of food, medicine, or medical devices to Iran. For all transactions with the CBI other than petroleum purchases, this provision takes effect on February 29, 2012, i.e., 60 days after the enactment of the Act. The timing of the petroleum purchase sanctions is discussed immediately below.

Private financial institutions and all other foreign financial institutions including central banks or foreign state-owned or -controlled banks potentially face sanctions under the NDAA if they knowingly conduct or facilitate significant financial transactions for the purchase of Iranian petroleum or petroleum products with a U.S.-designated Iranian financial institution or with the CBI after the provision takes effect as early as June 28, 2012, i.e., 180 days after enactment.* This NDAA provision may be held in abeyance beyond June 28, 2012, depending on the President s determination on the availability and price of alternative supplies. Foreign central and foreign state-owned or -controlled banks are also subject to these sanctions if the transactions are for the sale of petroleum or petroleum products to Iran and they occur after June 28, 2012.

All foreign financial institutions, including private and state-owned institutions, remain subject to section 104(c) of  the Comprehensive Iran Sanctions, Accountability, and Divestment Act  (CISADA), which calls for sanctions on foreign financial institutions that are found to have knowingly engaged in facilitating significant transactions for specific Iranian-linked individuals and entities. [02-14-2012]

*Irrespective of the timeframes set forth in the NDAA, any foreign financial institution that knowingly facilitates significant transactions with any U.S.-designated Iranian financial institution would still be subject to CISADA.


171. Does the NDAA (National Defense Authorization Act) repeal or amend Section 104(c) of CISADA (the Comprehensive Iran Sanctions, Accountability, and Divestment Act)?

No. Any foreign financial institution that knowingly facilitates significant transactions or provides significant financial services for a U.S.-designated, Iranian-linked financial institution can be sanctioned under section 104(c) of CISADA and section 561.201 of the Iranian Financial Sanctions Regulations ( IFSR ) even if those transactions are not sanctionable under section 1245(d) of the NDAA. Though the NDAA imposes sanctions on foreign financial institutions similar to financial sanctions under CISADA and the IFSR (i.e., prohibiting and/or imposing strict conditions on opening or maintaining correspondent accounts or payable-through accounts in the United States), there are differences in the scope and operation of the statutes. [02-14-2012]


172. How does Executive Order 13599, Blocking Property of the Government of Iran and Iranian Financial Institutions, and the blocking of all Iranian financial institutions affect the financial sanctions provisions in CISADA? Do CISADA sanctions now apply to financial transactions with any Iranian financial institution?

The Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) applies to transactions with only those Iranian financial institutions that are designated in connection with Iran s WMD or terrorism activities and are denoted on OFAC s List of Specially Designated Nationals and Blocked Persons (the SDN list) with the [IFSR] tag. While E.O. 13599 does block the property of all Iranian financial institutions, that action is not grounded in the authorities that relate to counterproliferation or counterterrorism, and therefore does not implicate CISADA. [02-14-2012]


173. Are there any exceptions to the sanctions provisions in the National Defense Authorization Act (NDAA)?

Yes. The NDAA includes an exception that prohibits the President from imposing sanctions with respect to any person for conducting or facilitating a transaction for the sale of food, medicine, or medical devices to Iran. [02-14-2012]


174. What are definitions for the following NDAA terms: significant financial transaction, knowingly, owned or controlled by the government of a foreign country, food, medicine, and medical devices, foreign financial institution, Iranian financial institution, significantly reduced, and whether the price and supply of petroleum and petroleum products produced in countries other than Iran is sufficient ?

significant financial transaction

The Iranian Financial Sanctions Regulations (IFSR), which implement section 104(c) of the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA), identify factors to be used in determining what is significant (as it relates to transactions) in 31 C.F.R § 561.404, which allows the Secretary of the Treasury to consider the totality of the facts and circumstances while providing a list of seven broad factors that can play a role in the determination, including: (1) the size, number, and frequency of transactions; (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 deems relevant on a case-by-case basis. Treasury anticipates closely modeling the definition of significant for National Defense Authorization Act (NDAA) purposes on the IFSR.

We anticipate utilizing a broad definition of financial transaction that encompasses any transfer of value involving a financial institution. The term transaction includes, but is not limited to, the following:

  • The holding of nostro, vostro, or loro accounts for or with the Central Bank of Iran or designated banks, such as Bank Melli Iran and/or Bank Saderat Iran, including any of their branches or subsidiaries worldwide (collectively the Listed Parties );

  • The provision of trade finance and/or letter of credit services for or with Listed Parties;

  • The provision of guarantees or similar instruments for or with Listed Parties;

  • The provision of investment products or instruments for Listed Parties and/or the participation with Listed Parties in investments;

  • The receipt or origination of wire transfers on behalf of or involving Listed Parties;

  • The acceptance of commercial paper (both retail and wholesale) drawn on Listed Parties, and the clearance of such paper (including, but not limited to, checks and similar drafts);

  • The receipt or origination of ACH or ATM transactions with Listed Parties; and/or

  • Any other transactions for or on behalf of, directly or indirectly, Listed Parties and/or with Listed Parties serving as correspondents, respondents, or beneficiaries. That would include transactions where the Listed Parties do not appear on the face of the transaction but where the transaction is undertaken with knowledge of the involvement of a Listed Party based on a relationship that exists through a third party such as a money exchange or trading house.

knowingly

The IFSR defines knowingly with respect to conduct, a circumstance, or a result, to mean that an entity or individual had actual knowledge, or should have known, about the conduct, the circumstance, or the result. 31 C.F.R. § 561.314. Treasury anticipates closely modeling the definition of this term on the IFSR.

owned or controlled by the government of a foreign country

The Iranian Transactions Regulations ( ITR ) define an entity owned or controlled by the Government of Iran in section 560.313. Borrowing from that definition, a financial institution owned or controlled by the government of a foreign country would be deemed to include a financial institution in which a foreign government owns a 50% or greater interest or which is otherwise controlled by a foreign government. Treasury anticipates closely modeling the definition of this term under the NDAA on the ITR definition.

food, medicine, and medical devices

Food : The October 2011 general license for the ITR and the Sudanese Sanctions Regulations ( SSR ) authorizing certain food exports to Iran and Sudan defines food as items that are intended to be consumed by and provide nutrition to humans or animals in Iran including vitamins and minerals, food additives and supplements, and bottled drinking water and seeds that germinate into items that are intended to be consumed by and provide nutrition to humans or animals in Iran. The regulations also specify that food does not include alcoholic beverages, cigarettes, gum, or fertilizer. Treasury anticipates closely modeling the definition of this term under the NDAA on this license definition.

Medicine : ITR section 560.530(e)(2) states that: For the purposes of this part, the term medicine has the same meaning given the term drug in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) but does not include any item listed on the Commerce Control List in the Export Administration Regulations, 15 CFR part 774, supplement no. 1 (excluding items classified as EAR 99). Similarly, under the Trade Sanctions Reform and Export Act ( TSRA ), 22 U.S.C. 7201(5), [t]he term medicine has the meaning given the term "drug" in section 321 of title 21. Treasury anticipates closely modeling the definition of this term under the NDAA on the ITR and TSRA.

Medical Devices : ITR section 560.530(e)(3) states that: For the purposes of this part, the term medical device has the meaning given the term device in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 321) but does not include any item listed on the Commerce Control List in the Export Administration Regulations, 15 CFR part 774, supplement no. 1 (excluding items classified as EAR 99). Similarly, under TSRA, 22 U.S.C. 7201(4), [t]he term "medical device" has the meaning given the term device in section 321 of title 21. Treasury anticipates closely modeling the definition of this term under the NDAA on the ITR and TSRA.

foreign financial institution

Foreign financial institution is defined in section 1245 of the NDAA with reference to section 104(i) of CISADA (22 U.S.C. § 8513(i)). As further defined in the IFSR, a foreign financial institution is any foreign entity that is engaged in the business of accepting deposits, making, granting, transferring, holding, or brokering loans or credits, or purchasing or selling foreign exchange, securities, commodity futures or options, or procuring purchasers and sellers thereof, as principal or agent. It includes but is not limited to depository institutions, banks, savings banks, money service businesses, trust companies, securities brokers and dealers, commodity futures and options brokers and dealers, forward contract and foreign exchange merchants, securities and commodities exchanges, clearing corporations, investment companies, employee benefit plans, and holding companies, affiliates, or subsidiaries of any of the foregoing. 31 C.F.R. § 561.308. It does not include the international financial institutions identified in 22 U.S.C. 262r(c)(2), the International Fund for Agricultural Development, or the North American Development Bank. 31 C.F.R. § 561.308. Treasury anticipates closely modeling the definition of this term under the NDAA on the IFSR.

Iranian financial institution

This term is defined in E.O. 13599  as: a financial institution organized under the laws of Iran or any jurisdiction within Iran (including foreign branches), any financial institution in Iran, any financial institution, wherever located, owned or controlled by the Government of Iran, and any financial institution, wherever located, owned or controlled by any of the foregoing. Such financial institutions include, but are not limited to, any foreign entity that is engaged in the business of accepting deposits, making, granting, transferring, holding, or brokering loans or credits, or purchasing or selling foreign exchange, securities, or commodity futures or options, or procuring purchasers and sellers thereof, as principal or agent. It includes but is not limited to depository institutions, banks, savings banks, money service businesses, trust companies, insurance companies, securities brokers and dealers, commodity futures and options brokers and dealers, forward contract and foreign exchange merchants, securities and commodities exchanges, clearing corporations, investment companies, employee benefit plans, and holding companies, affiliates, or subsidiaries of any of the foregoing.

significantly reduced

The Secretary of State, in consultation with the Secretary of the Treasury, the Secretary of Energy, and the Director of National Intelligence, will make determinations as to whether any country has significantly reduced the volume of Iranian crude oil purchases. Any determinations will be preceded by a process of rigorous due diligence. The Secretary of State intends to consider relevant evidence in assessing each country s efforts to reduce the volume of crude oil imported from Iran, including the quantity and percentage of the reduction in purchases of Iranian crude oil over the relevant period, termination of contracts for future delivery of Iranian crude oil, and other actions that demonstrate a commitment to substantially decrease such purchases.

whether the price and supply of petroleum and petroleum products produced in countries other than Iran is sufficient

The President will make a determination, based on the reports required by subparagraph (A) of Section 1245(d)(4) of the NDAA, as to whether the price and supply of petroleum and petroleum products produced in countries other than Iran is sufficient to permit purchasers of petroleum and petroleum products from Iran to reduce significantly in volume their purchases from Iran. [02-14-2012]


175. What is the scope of petroleum products under the law?

As defined by the U.S. Energy Information Administration (EIA), petroleum products include unfinished oils, liquefied petroleum gases, pentanes plus, aviation gasoline, motor gasoline, naphtha-type jet fuel, kerosene-type jet fuel, kerosene, distillate fuel oil, residual fuel oil, petrochemical feedstocks, special naphthas, lubricants, waxes, petroleum coke, asphalt, road oil, still gas, and miscellaneous products obtained from the processing of crude oil (including lease condensate), natural gas, and other hydrocarbon compounds. In keeping with the EIA s standard definition, petroleum products do not include natural gas, liquefied natural gas, biofuels, methanol, and other non-petroleum fuels. [02-14-2012]


176. If oil is being provided as payment for an outstanding debt, is such a transfer considered a financial transaction ?

If a transfer involves a financial institution it would likely be considered a financial transaction. [02-14-2012]


177. If the Central Bank of Iran (CBI) is involved in providing settlement services for a transaction, or is otherwise acting solely as an intermediary in a transaction between a non-designated Iranian bank and a foreign financial institution, is the foreign financial institution deemed to be engaging in a transaction with the CBI?

Section 1245 targets any significant transactions with the CBI; a transaction involving the CBI in an intermediary role would likely be viewed as a transaction with the CBI. [02-14-2012]


178. Are barter trades involving the Central Bank of Iran (CBI) considered financial transactions under Section 1245?

If a transfer involves a financial institution it would likely be considered a financial transaction. [02-14-2012]


179. Does the definition of significant financial transaction exclude the passive holding of Central Bank of Iran (CBI) reserves? Is the U.S. willing to give assurances that this will not be a basis for sanctions?

This will be a case-by-case determination and will require specifics on what passive holding entails. As a general matter, we would likely not view the holding of reserves as sanctionable in the following circumstances: the accounts are frozen or restricted, under which the CBI would be allowed to maintain accounts that it had already opened as of December 31, 2011, but would otherwise be unable to direct the disposition of those funds, with ordinary commercial interest payments and routine roll-overs of time deposits under pre-existing instructions being the only new transactions. [02-14-2012]


180. Are payments made under contracts existing prior to the date of enactment of the National Defense Authorization Act (NDAA) statute (December 31, 2011) exempted from the definition of significant transactions ?

No general exception will be provided for payments arising out of pre-existing contracts. The assessment of whether such payments are significant will be done on a case-by-case basis in line with the criteria discussed in FAQ #174. [02-14-2012]


181. Will the U.S. refrain from sanctioning foreign financial institutions that receive funds from the Central Bank of Iran (CBI) to repay loans? What if these loans were granted for projects that might be subject to the food, medicine, and medical device exemptions under the National Defense Authorization Act (NDAA)?

As noted, no general exception will be provided for payments arising out of pre-existing contracts. The assessment of whether such payments are significant will be done on a case-by-case basis in line with the criteria discussed in FAQ #174. Regarding payments for food, medicine, and medical devices, the NDAA does not allow sanctions based on transactions for the sale of food, medicine, or medical devices to Iran. Payments related to the export of broader humanitarian items would be dealt with in our analysis of what constitutes a significant financial transaction and would be considered on a case-by-case basis. [02-14-2012]


182. Is there a difference between entities that have been designated by the United States Government for illicit conduct, such as proliferation of weapons of mass destruction or support for terrorism, and those that are being blocked under E.O. 13599? How can I tell which entities appear on the Specially Designated National (SDN) List for which reasons?

Both blocked and designated entities appear on the SDN List.

Blocked persons, in the context of E.O. 13599, appear on the SDN List due to the United States Government s identification of these entities as the Government of Iran and/or as an Iranian financial institution. Such entities are identified on the SDN List with the tag [IRAN]. For example, Bank Keshavarzi is a Government of Iran owned Iranian financial institution and is identified with the [IRAN] tag. Additionally, the National Iranian Oil Company (NIOC) is a non-financial institution that has been identified as the Government of Iran and bears the [IRAN] tag.

Designated persons appear on the SDN List due to the United States Government s having determined that they meet the criteria set forth in any of a number of other Executive Orders concerning, for example, assisting Iran s weapons of mass destruction development, or aiding international terrorism and designating them for such activities. Such entities are identified on the SDN List with various tags other than [IRAN], such as [NPWMD] or [SDGT]. For example, Islamic Republic of Iran Shipping Lines is listed as: IRISL [NPWMD].

Note that many entries on the SDN List have more than one tag. For example: Bank Saderat Iran has three tags: [SDGT], indicating that it has been sanctioned for providing services to terrorism; [IRAN], indicating that it is the Government of Iran; and [IFSR], referring to the Iranian Financial Sanctions Regulations to signal to third country financial institutions that engage with entities with this tag that they risk sanctions under CISADA. [02-14-2012]


 

 

Executive Order 13606 (the GHRAVITY E.O.)

On April 22, 2012, the President signed Executive Order 13606 Blocking The Property And Suspending Entry into the United States of Certain Persons with Respect to Grave Human Rights Abuses by the Governments of Iran and Syria Via Information Technology (the GHRAVITY E.O. ). Effective 12:01 a.m. eastern daylight time on April 23, 2012, the GHRAVITY E.O. blocks all property and interests in property of persons listed in its Annex, and all persons determined by the Secretary of the Treasury, in consultation with or at the recommendation of the Secretary of State, to meet the criteria in the order. [04-23-2012]


183. Why did the President issue the GHRAVITY E.O.?

The GHRAVITY E.O. follows prior Executive orders issued by the President in response to the commission of human rights abuses by the Governments of Iran and Syria. With the GHRAVITY E.O., the President recognized that the commission of serious human rights abuses against the people of Iran and Syria by their governments, facilitated by computer and network disruption, monitoring, and tracking by those governments, threatens the national security and foreign policy of the United States. The GHRAVITY E.O. targets this activity in order to deter and disrupt such abuses. [04-23-2012]


184. What does the GHRAVITY E.O. do?

The GHRAVITY E.O. blocks (i.e., freezes) the property and interests in property of, among others, any person determined by the Secretary of the Treasury, in consultation with or at the recommendation of the Secretary of State, (1) to have operated, or to have directed the operation of, information and communications technology that facilitates computer or network disruption, monitoring, or tracking that could assist in or enable serious human rights abuses by or on behalf of the Government of Iran or the Government of Syria; or (2) to have sold, leased, or otherwise provided, directly or indirectly, goods, services, or technology to Iran or Syria likely to be used to facilitate such activities.

U.S. persons in possession of property or interests in property belonging to persons listed in the Annex to the GHRAVITY E.O., or designated in the future by Treasury under the E.O., are obligated to block the property and report the blocking to OFAC within 10 days of blocking. Entities that are 50% or more owned by persons blocked by the GHRAVITY E.O. are also blocked, regardless of whether such entities appear on the Annex or OFAC s list of Specially Designated Nationals and Blocked Persons ( SDN list ). [04-23-2012]


185. What type of activities does the GHRAVITY E.O. target?

The GHRAVITY E.O. targets the provision and use of information and communications technology to facilitate computer or network disruption, monitoring, or tracking that could assist in or enable serious human rights abuses by or on behalf of the Government of Iran or the Government of Syria. It is not intended to block exports of technology that enable the Syrian and Iranian people to freely communicate among themselves and with the outside world.

Information and communications technology means any hardware, software, or other product or service primarily intended to fulfill or enable the function of information processing and communication by electronic means, including transmission and display, including via the Internet. [04-23-2012]


186. How do I know that a person has been designated under the GHRAVITY E.O.?

Persons designated under the GHRAVITY E.O. appear on the publicly available Specially Designated Nationals List (SDN list) bearing the [HRIT] tag. U.S. persons are obligated to block property involving the persons bearing the tag [HRIT] on the SDN list, unless the transaction is exempt or otherwise authorized by OFAC. [04-23-2012]


187. Does the GHRAVITY E.O. prohibit me from exporting technology to companies that do business with Iran or Syria?

This E.O. does not generally prohibit transactions involving persons that do business with Iran or Syria, unless the person has been designated pursuant to this order. You should consult with the Department of Commerce s Bureau of Industry and Security (BIS) regarding exports to companies that do business with Syria. [04-23-2012]


188. If I am a non-U.S. company that exports information and communications technology to Iran or Syria, will I be designated under the GHRAVITY E.O.?

The measures in this order are designed primarily to address the need to prevent entities located in whole or in part in Iran and Syria from facilitating or committing serious human rights abuses. These measures are not designed to prevent the provision of information and communications technology necessary to enable the Iranian and Syrian people to freely communicate with each other and the outside world. That said, those providing communications technology to Iran or Syria that has the potential to facilitate computer or network disruption, monitoring, or tracking should exercise great caution given Iran and Syria s use of this technology to assist in the commission of serious human rights abuses. [04-23-2012]


189. Would I need authorization from OFAC or BIS if I wanted to export goods or technology to persons blocked under the GHRAVITY E.O.?

Yes. For more information regarding exports of goods or technology to persons blocked under the GHRAVITY E.O. please contact OFAC or BIS. [04-23-2012]


190. Are existing licenses issued by the U.S. Government involving persons designated under the GHRAVITY E.O. still valid?

U.S. persons who have been issued licenses involving persons designated under the GHRAVITY E.O. should check with the issuing agency regarding the validity of their licenses. [04-23-2012]


 

 

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

191. What does Executive Order 13608 Prohibiting Certain Transactions with and Suspending Entry into the United States of Foreign Sanctions Evaders with Respect to Iran and Syria do?

This Executive Order gives Treasury new authorities. First, it strengthens Treasury s ability to address behavior by foreign individuals and entities determined to have violated, attempted to violate, conspired to violate, or caused a violation of U.S. sanctions on Syria or Iran. This E.O. also gives Treasury the authority to impose sanctions on foreign persons who have facilitated deceptive transactions for or on behalf of persons subject to U.S. sanctions.

Transactions by U.S. persons or within the United States involving persons sanctioned under this authority are prohibited, effectively cutting the listed persons off from the U.S. marketplace and financial system. By cutting off access to the U.S. marketplace and financial system to such sanctions evaders, Executive Order 13608 provides Treasury with a powerful tool to prevent and deter such behavior and to hold such persons accountable and to convince them to change their behavior. Publicly identifying such persons will also allow U.S. persons to avoid unwittingly engaging in transactions with identified foreign persons that may expose U.S. persons to the risk of sanctions violations. [05-01-2012]


192. Why was this authority needed?

Executive Order 13608 expands Treasury s ability to address the behavior of foreign persons determined to have violated or attempted to violate U.S. sanctions on Syria or Iran, or to have facilitated deceptive transactions on behalf of persons subject to those sanctions, where the foreign person had no physical, financial, or other presence in the United States and did not submit to U.S. administrative proceedings. Treasury may use this authority where it appears that a foreign person violated U.S. sanctions on Iran or Syria but may not meet criteria for designation under existing Executive Orders. Executive Order 13608 will provide a means through which Treasury can limit the risk to U.S. commercial and financial systems posed by foreign persons determined to have violated U.S. sanctions on Iran or Syria, or to have engaged in deceptive transactions for or on behalf of persons subject to U.S. sanctions on Iran or Syria.

Such a listing under Executive Order 13608 also provides Treasury with the capability to put the world on notice as to such foreign persons activity and the risk of similar future activity. Such identification will help prevent U.S. persons from unwittingly engaging in transactions with foreign persons that may pose a risk of sanctions violations. [05-01-2012]


193. What are the repercussions of an individual or entity being identified under Executive Order 13608?

If an individual or entity is made subject to sanctions under this authority, U.S. persons generally may no longer provide to or procure from such individual or entity any goods, services, or technology. From a practical standpoint, it means that the sanctioned individual or entity will be cut off from the U.S. commercial and financial systems. [05-01-2012]


194. Are U.S. persons required to block the property of individuals and entities identified under Executive Order 13608?

No. Identifications or listings under Executive Order 13608 do not block any assets. However, a U.S. person may not provide or procure goods or services, including financial services, or technology to or from a listed person without authorization from OFAC, unless the transaction is otherwise exempt from regulation under the International Emergency Economic Powers Act (e.g., certain travel-related transactions). [05-01-2012]


336. How do I know whether a person is identified under E.O. 13608?

Please refer to the Foreign Sanctions Evaders (FSE) List. [02-06-2014]


195. I am a financial institution. What do I do if I receive a wire transfer involving a listed party?

A U.S. financial institution must reject any wire transfer involving a listed person and file a report with OFAC within 10 days. [05-01-2012]


196. I am a financial institution and I hold an account for a listed person. What do I do with the funds?

The account is not blocked; however, it is restricted and you cannot allow it to be operated without authorization from OFAC. [05-01-2012]


197. What are U.S. persons obligated to do with property of a person listed under Executive Order 13608?

Property of a listed person is not blocked, but U.S. persons must have authorization from OFAC to provide or procure such property to or from a listed person, or to provide or procure services to or from a listed person in connection with such property. Additionally, wire transfers involving the assets of an Executive Order 13608-listed person must be rejected. [05-01-2012]


198. May a U.S. person deal with an Executive Order 13608-listed person so long as the dealing does not involve Iran or Syria?

No. U.S. persons are prohibited from all transactions or dealings described in Executive Order 13608 with persons listed under Executive Order 13608, unless authorized by OFAC or where the transaction is otherwise exempt from regulation under the International Emergency Economic Powers Act . [05-01-2012]


199. How is an identification or listing under Executive Order 13608 different from a designation?

Like a designation, a U.S. person is prohibited, unless authorized by OFAC or if the underlying transaction is exempt from regulation under the International Emergency Economic Powers Act , from dealing with an identified or listed person. Unlike a blocking designation, the property and the interests in property of a person listed under Executive Order 13608 are not blocked. [05-01-2012]


200. How is this different from lists maintained by the Department of Commerce?

Treasury s authority under Executive Order 13608 has some similarities to Commerce s authority under the Export Administration Regulations ( EAR ). Commerce may impose denial orders on persons (both foreign and U.S.) who have committed violations of the EAR or present an imminent risk of committing a violation. These individuals or organizations are listed on Commerce s Denied Persons List. It is prohibited to deal with Denied Persons in any export transaction involving items (commodities, software, and technology) subject to the EAR. Treasury s authority under Executive Order 13608 complements Commerce s authority by addressing at least two types of sanctions violations that are outside the scope of the EAR. Specifically, Treasury may prohibit the provision of services (in addition to goods and technology) to or from identified or listed persons and Treasury may prohibit transactions or dealings involving goods and technology that are not subject to the EAR. However, unlike Commerce s authority, Treasury s authority to sanction or list an individual or entity under Executive Order 13608 may be implemented only with respect to foreign individuals or entities. [05-01-2012]


201. May a U.S. person deal with a person listed under Executive Order 13608 in a transaction that was previously licensed by OFAC?

No. U.S. persons cannot have any dealings with a person identified or listed under this Executive Order absent specific authorization from OFAC pursuant to the Executive Order 13608, unless the transaction is exempt from regulation under the International Emergency Economic Powers Act . [05-01-2012]


202. What if the transaction is already underway?

If a transaction is underway at the time of a listing, a U.S. person must cease dealing with the listed person and the U.S. person is prohibited from engaging in transactions or dealings in or related to any goods, services, or technology to or from the listed person, unless the transaction is exempt under the International Emergency Economic Powers Act , or until such time that OFAC authorizes the transactions pursuant to the Executive Order 13608. Additionally, if the transaction underway involves a wire transfer, a U.S. financial institution must reject it and file a report with OFAC within 10 days.

Like all of its programs, OFAC has the authority under Executive Order 13608 to license transactions that are consistent with U.S. foreign policy. [05-01-2012]


203. Can a U.S. person use a listed person to facilitate personal remittances to or from Iran or Syria?

No. Without specific authorization from OFAC, U.S. persons cannot use a listed person to process personal remittances. [05-01-2012]


204. Will Treasury pursue an enforcement action before identifying or listing a person pursuant to Executive Order 13608?

The authorities granted under this Executive Order are in addition to current authorities that Treasury has to pursue an enforcement action for violations of U.S. law, and Treasury is not required to pursue a civil enforcement action prior to identifying or listing a person pursuant to Executive Order 13608. [05-01-2012]


 

Treasury CISADA Findings Against Bank of Kunlun

207. What were the criteria for this finding? How many other institutions were you looking at and why did you decide to take action against Bank of Kunlun?

Based on information made available to the Treasury Department, the Department has found that China s Bank of Kunlun has knowingly facilitated significant transactions for various Iranian-linked banks designated by the United States under our WMD or terrorism authorities.

Upon finding that Bank of Kunlun was knowingly engaged in these activities that are sanctionable under the Comprehensive Iran Sanctions, Accountability, and Divestment Act  (CISADA), the Secretary of the Treasury has prohibited U.S. banks from opening or maintaining correspondent accounts or payable-through accounts in the United States for Bank of Kunlun effectively cutting off Bank of Kunlun s direct access to the U.S. financial system.

Since CISADA was signed into law in July 2010, Treasury has engaged with over 120 financial institutions and bank regulators in more than 60 countries all over the world to brief them on the financial provisions of CISADA, and, in cases where we had specific concerns, has shared information about those concerns.

This global engagement campaign has proven highly successful, as we have seen the overwhelming majority of financial institutions with which we have engaged change their business practices even close any correspondent accounts with U.S. designated Iranian banks to ensure that their access to the U.S. financial system is not put at risk.

The July 31, 2012 action against Bank of Kunlun was in response to its ongoing relationships with U.S.-designated Iranian banks.

Note: The Treasury Department had also made a CISADA finding against Iraq s Elaf Islamic Bank on July 31, 2012. On May 17, 2013, Elaf Islamic Bank was delisted and its name was removed from the Part 561 List. [05-17-2013]


208. How are you defining significant transactions and financial services?

In determining whether transactions or financial services are significant, the Secretary of the Treasury may consider a number of factors related to the transactions or services, including, but not limited to: size, number, and frequency; type, complexity and commercial purpose; the level of awareness or involvement by the bank s management; whether the activity or payment illustrates a pattern of practice or is an isolated event; the ultimate economic benefit conferred upon the designated person(s); and whether the transactions involved the use of deceptive financial practices to obscure the identities of the parties involved.

Bank of Kunlun

Bank of Kunlun has provided hundreds of millions of dollars worth of services to U.S. designated Iranian banks. These financial services include maintaining accounts, transferring payments, and serving as the paying bank for letters of credit opened by U.S. designated Iranian banks. The facilitation of hundreds of millions of U.S. dollars worth of transactions with U.S. designated Iranian banks over the past year is significant.

In 2012, after Treasury designated Bank Tejarat, Bank of Kunlun transferred hundreds of payments totaling approximately $100 million dollars for accounts it holds for Bank Tejarat and made a payment for an IRGC affiliate pursuant to a letter of credit opened by Bank Tejarat. [05-17-2013]


209. What happens to the correspondent and payable-through accounts held by Bank of Kunlun in the United States?

To our knowledge, Bank of Kunlun does not currently hold correspondent accountswith U.S. financial institutions.

The July 31, 2012 action prohibits financial institutions in the United States from opening or maintaining correspondent or payable-through accountsfor Bank of Kunlun. [05-17-2013]


210. What are the consequences for a U.S. financial institution that maintains or opens a new correspondent or payable-through account for Bank of Kunlun?

A U.S. financial institution that maintains or opens a correspondent  or payable-through account for Bank of Kunlun is subject to civil penalties in the amount of up to $250,000 or twice the value of the transaction, whichever is greater.

Criminal penalties of up to $1 million can be imposed for willful violations, and individuals who willfully violate the prohibition can face up to 20 years in prison. [05-17-2013]


211. If a foreign financial institution continues to do business with Bank of Kunlun, could that lead to a CISADA finding against the other institution?

Any foreign financial institution that knowingly facilitates significant transactionson behalf of designated Iranian banks whether directly or indirectly may face Comprehensive Iran Sanctions, Accountability, and Divestment Act(CISADA) sanctions. OFAC defines knowingly in this context as meaning the financial institution knew or should have known of the conduct, circumstance, or result. Bank of Kunlun has demonstrated its willingness to move hundreds of millions dollars on behalf of designated Iranian banks. Accordingly, we would expect heightened due diligence in any dealings with Bank of Kunlun. [05-17-2013]


212. Does this finding affect Bank of Kunlun s branches or subsidiaries around the world? Does this finding affect any holding companies?

The prohibitions implemented as a result of today s action apply to Bank of Kunlun and all of its offices, around the world. [05-17-2013]


213. Are United States financial institutions that do not hold correspondent or payable-through accounts for Bank of Kunlun required to block or reject transactions that otherwise involve Bank of Kunlun?

No. U.S. financial institutions are not required to block or reject financial or trade transactions that involve Bank of Kunlun.

That said, we would expect heightened due diligence in any dealings with Bank of Kunlun given its demonstrated willingness to facilitate transactions on behalf of Iranian banks designated by well over a dozen countries worldwide. [05-17-2013]


214. What is the licensing process for U.S. financial institutions that need to conduct transactions in order to close correspondent or payable-through accounts with a foreign financial institution sanctioned pursuant to the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA)?

Treasury regulations provide a 10-day period in which U.S. financial institutions are authorized to engage in the transactions necessary to close an affected account. If a U.S. financial institution that is in the process of closing an affected account seeks to engage in transactions beyond those already authorized, Treasury may issue specific licenses on a case-by-case basis. [05-17-2013]


215. What is the difference, in practical effect, between this and a designation under one of your other authorities, like E.O. 13382?

The July 31, 2012 Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) finding prohibits the opening or maintaining of correspondent accounts or payable-through accountsin the United States for Bank of Kunlun. This action does not require the immediate freezing of any assets that Bank of Kunlun may hold within U.S. jurisdiction. [05-17-2013]


 

Executive Order 13622 of July 30, 2012, Authorizing Additional Sanctions With Respect to Iran

E.O. 13622 was revoked by E.O. 13716 of January 16, 2016. Please be advised that certain provisions of E.O. 13622 have been incorporated into E.O. 13846 of August 6, 2018, Reimposing Certain Sanctions With Respect to Iran . FAQs relating to E.O. 13846 can be found here. FAQs relating to E.O. 13622 have been archived and can be found here. [08-06-2018] [08-06-2018]


 

Determination Pursuant to Section 312 of the Iran Threat Reduction and Syria Human Rights Act (TER)

Section 312 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (TRA) requires the Secretary of the Treasury, no later than 45 days after the date of the enactment of TRA, to determine whether the National Iranian Oil Company (NIOC) or the National Iranian Tanker Company (NITC) is an agent or affiliate of Iran s Islamic Revolutionary Guard Corps (IRGC), and to report to Congress on these determinations and the reasons for them. On September 24, 2012, the Department of the Treasury made a determination that NIOC is an agent or affiliate of the IRGC. Based on the information currently available, Treasury is not able to determine at this time whether NITC is an agent or affiliate of the IRGC.


233. Isn't t the National Iranian Oil Company (NIOC) already subject to sanctions?

Yes. Executive Order 13622 provides for sanctions on foreign financial institutions found to have knowingly conducted or facilitated significant financial transactions with NIOC (except for sales of refined petroleum products to NIOC that fall below the dollar threshold that could trigger sanctions under the Iran Sanctions Act). Executive Order 13622 also provides authority for the Secretary of the Treasury to block the property and interests in property of persons determined to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, NIOC (as well as other specified entities). Note, however, that these sanctions are not applicable to certain transactions related to the Shah Deniz pipeline project, in which NIOC has a minority stake, under Executive Order 13622. In addition, NIOC was already blocked as an entity of the Government of Iran under  E.O. 13599, which was issued pursuant to the International Emergency Economic Powers Act (IEEPA), as amended, among other authorities. Nevertheless, as described below, the determination that NIOC is an agent or affiliate of the IRGC carries consequences.


234. What is the effect of the National Iranian Oil Company (NIOC) determination? Are there CISADA implications?

As a result of this the Iran Threat Reduction and Syria Human Rights Act  (TRA) section 312 determination, NIOC now is also a person described under section 104(c)(2)(E)(i) of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA) as an agent or affiliate of the IRGC whose property or interests in property are blocked pursuant to IEEPA. This means that foreign financial institutions determined to knowingly facilitate significant transactions or provide significant financial services for NIOC are exposed to CISADA sanctions, including prohibitions or the imposition of strict conditions on the opening or maintaining of correspondent or payable-through accounts in the United States.

In addition, section 302 of TRA  requires sanctions on foreign persons determined to have knowingly provided certain material support to, or engaged in significant transactions with, the IRGC or its officials, agents, or affiliates whose property or interest in property are blocked. Consequently, foreign persons that knowingly engage in significant transactions with NIOC after the September 24, 2012 determination could be exposed to sanctions.

An IRGC identifier will be added to NIOC s entry on the Specially Designated Nationals and Blocked Persons List available on OFAC s website.

As noted below, the potential application of sanctions under section 104(c)(2)(E)(i) of CISADA and section 302 of TRA is affected by whether the country with primary jurisdiction has received a significant reduction exception from the Secretary of State.


235. What are the implications for petroleum purchase transactions involving NIOC by financial institutions and entities in countries that have received a significant reduction exception from the Secretary of State?

Significant transactions, financial services, or material support involving National Iranian Oil Company (NIOC) for the purchase of Iranian petroleum or petroleum products by a foreign financial institution or entity based in a country that has received a significant reduction exception from the Secretary of State do not carry potential sanctions consequences under  the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA), sections 302 and 312 of the Iran Threat Reduction and Syria Human Rights Act  (TRA), section 1245 of the National Defense Authorization Act for Fiscal Year 2012 (NDAA), or sections 1 and 2 of  Executive Order 13622. Sections 302 and 312 of TRA authorize the President not to impose sanctions for the purchase of petroleum or petroleum products from Iran if an exception under subsection 1245(d)(4)(D) of the NDAA applies to the country with primary jurisdiction over the foreign financial institution at the time of the transactions or the provision of services. Notwithstanding the foregoing, any significant transaction for other sanctioned entities (such as Iranian designated banks or other persons described in section 104(c)(2)(E) of CISADA) may result in sanctions, regardless of whether the transaction is for the purchase of petroleum or petroleum products and involves NIOC.


236. Does the determination regarding the National Iranian Tanker Company (NITC) mean that there is no affiliation between NITC and the IRGC?

This statement means only that, based on the currently available information, Treasury is not able to determine at this time that NITC is an agent or affiliate of the IRGC.


237. How does the effect of this determination compare to the effect of section 1(a) of Executive Order 13622 as to transactions with National Iranian Oil Company (NIOC)?

The effect of the determination is similar to the effect of Executive Order 13622 section 1(a), which provides for prohibitions on the opening of and prohibitions or strict conditions on maintaining correspondent accounts or payable-through accounts in the United States for foreign financial institutions determined by the Secretary of the Treasury, in consultation with the Secretary of State, to have knowingly conducted or facilitated significant financial transactions with NIOC. Executive Order 13622 likewise contains an exception that covers transactions with NIOC conducted or facilitated by foreign financial institutions based in NDAA-excepted jurisdictions. A significant difference between these authorities is that the National Defense Authorization Act (NDAA) exception in the Iran Threat Reduction and Syria Human Rights Act  (TRA) section 312 is limited to transactions or financial services for the purchase of petroleum or petroleum products from Iran.


Section 4 of Executive Order 13628 of October 9, 2012, "Authorizing the Implementation of Certain Sanctions Set Forth in the Iran Threat Reduction and Syria Human Rights Act of 2012 and Additional Sanctions with Respect to Iran"

E.O. 13628 was amended by E.O. 13716 of January 16, 2016 and revoked by E.O. 13846 of August 6, 2018, Reimposing Certain Sanctions With Respect to Iran . Please be advised that section 8 of E.O. 13846 continues in effect the sanctions previously contained in section 4 of E.O. 13628 and expands them to cover activity sanctionable under E.O 13846.  FAQs relating to E.O. 13846 can be found here. FAQs relating to Section 4 of E.O. 13628 have been archived and can be found here. [08-06-2018]


 

Iranian Transactions and Sanctions Regulations and the Statement of Licensing Procedure on Support Of Human Rights-, Humanitarian-, and Democracy-Related Activities With Respect to Iran

The Office of Foreign Assets Control ("OFAC") issued a final rule in the Federal Register on October 22, 2012, changing the heading of the Iranian Transactions Regulations, 31 C.F.R. part 560 (the "ITR"), to the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (the "ITSR"), and amending the renamed ITSR to implement Executive Order ("E.O.") 13599 (other than section 11) and sections 1245(c) and (d)(1)(B) of the National Defense Authorization Act for Fiscal Year 2012 (the "NDAA"). These new regulations implement the blocking of the Government of Iran and all Iranian financial institutions pursuant to E.O. 13599 and the NDAA.

OFAC is adding numerous new sections to the ITSR, including prohibitions, definitions, interpretations, and licensing provisions. OFAC also is revising many existing sections of the ITSR in order to take account of the new government-wide blocking as well as the blocking of all Iranian financial institutions. Due to the extensive nature of these and other amendments described below, OFAC is reissuing the ITSR in their entirety.

In addition, OFAC is publishing on the Iran section of its Web site a Statement of Licensing Procedure on Support of Human Rights-, Humanitarian-, and Democracy-Related Activities with Respect to Iran. The Statement of Licensing Procedure reflects procedures established pursuant to the Iran Threat Reduction and Syria Human Rights Act of 2012 (the "TRA"), which was signed into law by the President on August 10, 2012.


241. What are the major changes that the Iranian Transaction and Sanctions Regulations (ITSR) implement in superseding the Iranian Transaction Regulations (ITR)?

The ITSR block the property and interests in property of the Government of Iran and all Iranian financial institutions that come within the possession or control of any U.S. person, including any foreign branch, and prohibit all U.S. persons from dealing with any property interests whatsoever, present, future, or contingent, of persons identified as already blocked pursuant to E.O. 13599and the National Defense Authorization Act (NDAA).

OFAC is adding section 560.211 to the ITSR to implement the blocking prohibitions set forth in E.O. 13599 and the NDAA. New sections 560.212 through 560.214 are being added to set forth certain consequences and requirements that stem from the blocking prohibitions, including, inter alia, the requirement to hold blocked funds in interest-bearing accounts. New paragraphs (e) and (f) are being added to section 560.210 to incorporate two exemptions from the blocking prohibitions that are set forth in E.O. 13599. These exemptions concern the official business of the Federal Government and the property and interests in property of the Government of Iran that were blocked pursuant to Executive Order 12170 of November 14, 1979. [10-22-2012]


242. The ITSR includes revisions to the ITR pertaining to the transfer of funds to or from Iran. Accordingly, how may I transfer funds to or from Iran that arise from, and are ordinarily incident and necessary to give effect to, an underlying transaction that is authorized under the ITSR?

The Iranian Transactions and Sanctions Regulations(ITSR) authorize United States depository institutions to process transfers of funds to or from Iran, or for the direct or indirect benefit of persons in Iran or the Government of Iran , if the transfer arises from, and is ordinarily incident and necessary to give effect to, an underlying transaction that has been authorized by a specific or general license issued pursuant to, or set forth in, the ITSR and does not involve debiting or crediting an Iranian account. See 31 CFR 560.516(a).

In addition, the ITSR authorize United States registered brokers or dealers in securities to process transfers of funds to or from Iran, or for the direct or indirect benefit of persons in Iran or the Government of Iran, if the transfer arises from, and is ordinarily incident and necessary to give effect to, an underlying transaction that has been authorized by a specific or general license issued pursuant to, or set forth in, the ITSR and does not involve debiting or crediting an Iranian account. See 31 CFR 560.516(b).

The authorizations set forth in section 560.516 of the ITSR do not allow a U.S. person who is authorized to engage in the underlying transaction to deal directly with money service businesses (MSBs) or hawalas, wherever located. However, these authorizations do not preclude United States depository institutions or United States registered brokers or dealers in securities from engaging or dealing with third-country MSBs or hawalas in the processing of the authorized transfers pursuant to section 560.516 of the ITSR. [10-22-2012]


243. How can I send personal remittances to or from Iran under the Iranian Transaction and Sanctions Regulations (ITSR)?

The ITSR authorize the transfer of funds that are noncommercial and personal in nature to or from Iran or for or on behalf of an individual ordinarily resident in Iran, other than an individual whose property and interests in property are blocked pursuant to § 560.211, subject to certain restrictions and limitations. See 31 CFR 560.550. Such transfers must be processed by a United States depository institution or a United States registered broker or dealer in securities and not by any other U.S. person. The personal remittances general license does not permit a U.S. person to deal directly with money service businesses (MSBs) or hawalas, wherever located. However, this general license does not preclude United States depository institutions or United States registered brokers or dealers in securities from engaging or dealing with third-country MSBs or hawalas in the processing of the authorized transfers pursuant to section 560.550 of the ITSR.

The hand-carrying of certain noncommercial, personal remittances is also authorized, provided that the individual who is a U.S. person is hand-carrying the funds on his or her behalf, but not on behalf of another person. See 31 CFR 560.550. [10-22-2012]


244. What effect will the Iranian Transaction and Sanctions Regulations (ITSR) have on Iranian-Americans and the people of Iran?

The ITSR include several general licenses that newly authorize, or continue to authorize, activities that are otherwise prohibited by the regulations. Categories of activities affected by these changes include, among other things, visa-related transactions, journalistic activities in Iran, the sale of real property in Iran and the transfer of related proceeds to the United States, educational activities (including certain exchange programs), participation in conferences, and the exportation and reexportation of medicine and basic medical supplies to Iran. [10-22-2012]


245. What does the Statement of Licensing Procedure on Support of Human Rights-, Humanitarian-, and Democracy-Related Activities with Respect to Iran do?

The Statement of Licensing Procedure reflects procedures established pursuant to section 413 of the Iran Threat Reduction and Syria Human Rights Act  (the TRA). These procedures stipulate that, as of the effective date of the TRA, license determinations for complete requests for authorization under this policy shall be made not later than 90 days after receipt by OFAC, with certain exceptions. The Statement of Licensing Policy applies to applications submitted by the following categories of U.S. persons seeking to engage in certain human rights-, humanitarian-, and democracy-related activities with respect to Iran: (1) entities receiving funds from the Department of State to engage in the proposed activity; (2) the Broadcasting Board of Governors; and (3) other appropriate agencies of the United States Government. The ITSR also include separate statements of licensing policy related to the sharing of information over the Internet in Iran and the support of democracy and human rights in Iran and academic and cultural exchange programs. [10-22-2012]


 

Implementation of Section 504 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (the TRA)

On August 10, 2012, the President signed into law the Iran Threat Reduction and Syria Human RightsAct of 2012, Public Law 112-158 ( TRA ). Section 504 of the TRA amends section 1245(d)(4)(D) of the National Defense Authorization Act for Fiscal Year 2012, Public Law 112-81 ( NDAA ), which the President signed into law on December 31, 2011. The section 504 amendments to the NDAA took effect February 6, 2013. Amendments to the Iranian Financial Sanctions Regulations, 31 C.F.R. part 561 (the IFSR ) were published on March 15, 2013, to implement sections 503 and 504 of the TRA and certain provisions of Executive Order 13622of July 30, 2012.  Although Executive Order 13716 of January 16, 2016 revoked Executive Order 13622, the relevant provisions of Executive Order 13622 were reimposed by Executive Order 13846 of August 6, 2018.


254. What does section 504 of the TRA do?

Pursuant to the restrictions already in place under the National Defense Authorization Act (NDAA), foreign financial institutions ( FFIs ) face restrictions on, or loss of, correspondent and payable-through account access in the United States if they knowingly engage in significant financial transactions with the Central Bank of Iran ( CBI ) or a designated Iranian financial institution, unless an NDAA exception, such as the significant reduction exception, applies. The NDAA significant reduction exception applies if the Secretary of State, in consultation with the Secretary of the Treasury and other agencies, has determined that the country with primary jurisdiction over the FFI has significantly reduced its purchases of Iranian crude oil during a specified period of time.

Effective February 6, 2013, section 504 amends the NDAA in several ways. Most importantly, it narrows the NDAA s significant reduction exception to (a) exempt from sanctions only transactions that conduct or facilitate bilateral trade in goods or services between the country granted the exception and Iran, and (b) require that funds owed to Iran as a result of the bilateral trade be credited to an account located in the country granted the exception and not be repatriated to Iran. In addition, it -

(i) eliminates the distinction between state-owned or -controlled FFIs (not including foreign central banks) and private FFIs, thereby expanding the scope of sanctionable transactions for state-owned or -controlled FFIs with the CBI or designated Iranian financial institutions; and

(ii) clarifies that countries that have reduced their Iranian crude oil purchases to zero may continue to receive the significant reduction exception.

The sale of agricultural commodities, food, medicine, or medical devices to Iran (the Humanitarian Exception ) is not impacted by section 504 of the TRA.

The purchase or acquisition of petrochemicals from Iran remain sanctionable activities and are not subject to the significant reduction exception. [2-6-2013]


255. Do the section 504 modifications of the TRA restrict any other dealings with Iran?

Yes, the section 504 modifications also narrow the scope of transactions excepted from certain sanctions available under E.O. 13622. Accordingly, foreign financial institutions (FFIs) in countries that are determined by the Secretary of State to have significantly reduced their purchases of Iranian crude oil pursuant to the NDAA, that knowingly conduct significant financial transactions with the National Iranian Oil Company ( NIOC ), the Naftiran Intertrade Company ( NICO ), or otherwise for the purchase of petroleum or petroleum products from Iran, are only eligible for the significant reduction exception if the FFIs adhere to the bilateral trade restrictions, credit the funds to an account in the country with primary jurisdiction over the FFI, and do not repatriate the funds to Iran.

Example 1: A FFI in a country which has received a significant reduction exception and with primary jurisdiction over the FFI may facilitate a transaction enabling an oil refinery in that country to purchase crude oil from Iran without having exposure to U.S. correspondent account sanctions, so long as the transaction meets section 504 s bilateral trade requirements, the funds are credited to an account in the FFI in the country with primary jurisdiction over the FFI, and the funds are not repatriated to Iran.

Example 2: If, however, a FFI in a country which has received a significant reduction exception facilitates a third country s crude oil purchase even a third country with a significant reduction exception from Iran, the FFI would have exposure to sanctions because the transaction was not solely for the FFI host country s purchase of crude oil from Iran. [2-6-2013]


256. What transactions are impacted by section 504 of the TRA as it amends section 1245 of the National Defense Authorization Act (NDAA) for Fiscal Year 2012?

Significant financial transactions* knowingly conducted or facilitated by a foreign financial institution (FFI) with the Central Bank of Iran (CBI) on or after November 5, 2018 or with a designated Iranian financial institution may be subject to sanctions under the National Defense Authorization Act (NDAA) and section 561.203 of the Iranian Financial Sanctions Regulations (IFSR), 31 C.F.R. Part 561, unless

(i) the country that has primary jurisdiction over the FFI conducting or facilitating such significant financial transactions has received a significant reduction exception under section 1245(d)(4)(D) of the NDAA; and
(ii) the significant financial transaction is for bilateral trade only, and any funds owed to Iran as a result of such trade are credited to an account at the FFI in the country that has primary jurisdiction over the FFI and are not repatriated to Iran.

However, any FFI that knowingly facilitates significant transactions or provides significant financial services for persons designated in connection with Iran s support for international terrorism or the proliferation of weapons of mass destruction pursuant to E.O.s 13224 or 13382 can be sanctioned under section 104(c) of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 ( CISADA ) and section 561.201 of the Iranian Financial Sanctions Regulations (IFSR), even if those transactions are not sanctionable under section 1245(d) of the NDAA, section 561.203 of the IFSR, sections 1244 and 1247 of the Iran Freedom and Counter-Proliferation Act of 2012, and Executive Order 13846 for countries that receive an SRE. [11-05-2018]

* These do not include sales relating to the Humanitarian Exception.


257. To which jurisdictions does the significant reduction exception apply (section 504 of the TRA)?

As of February 6, 2013, 20 jurisdictions have been granted a 180-day significant reduction exception.

The following jurisdictions received their 180-day significant reduction exception to the National Defense Authorization Act (NDAA) sanctions on September 14, 2012: Belgium, the Czech Republic, France, Germany, Greece, Italy, Japan, the Netherlands, Poland, Spain, and the United Kingdom.

The following jurisdictions received their 180-day significant reduction exception to NDAA sanctions on December 7, 2012: China, India, Malaysia, Republic of Korea, Singapore, South Africa, Sri Lanka, Taiwan, and Turkey. [2-6-2013]


258. What is meant by the TRA section 504 s requirement that bilateral trade consist of trade in goods and services between the country with primary jurisdiction over the foreign financial institution (FFI) and Iran?

OFAC interprets bilateral trade between Iran and the country with primary jurisdiction over the FFI to mean trade in only those goods or services originating in (e.g., produced in or substantially transformed in)

(i) the country with primary jurisdiction over the FFI conducting or facilitating the transaction, or
(ii) Iran (for purposes of the import of Iranian-origin goods or services by the country with primary jurisdiction over the FFI),

and the trade in services cannot include brokering transactions involving goods or services from or to third countries.

Furthermore, the goods or services must be exported and sold directly to either the country with primary jurisdiction over the FFI (in the case of Iranian-origin goods or services), or Iran (in the case of goods or services originating in the country with primary jurisdiction over the FFI).

The Humanitarian Exception is not impacted by section 504 s bilateral trade limitations (see FAQ 265). [2-6-2013]


259. What can a foreign financial institution (FFI) do with the funds resulting from the import of Iranian-origin goods or services once the funds are credited to an account? Can funds be transferred to other accounts?

Section 504 of the TRA requires that, in order for a sanctionable transaction to fall within the bounds of the significant reduction exception, any funds owed to Iran as a result of the bilateral trade transaction must be credited to an account located in the country with primary jurisdiction over the [FFI]. For purposes of implementing this requirement, OFAC interprets the account located in the country with primary jurisdiction over the [FFI] to be an account in the country with primary jurisdiction over the FFI, and at the same FFI that facilitated the transaction for the importation of goods or services from Iran.

Once the funds are deposited in the FFI, they can be -

(i) used to pay for a purchase by Iran of goods or services originating in the country with primary jurisdiction over the FFI which are exported and sold directly to Iran, or for the Humanitarian Exception (see Figure 1); or
(ii) transferred to a SPECIAL PURPOSE ACCOUNT (see FAQ 260) within that same FFI, in the country with primary jurisdiction over the FFI, where the funds may be later debited to purchase goods or services originating in the country with primary jurisdiction over the FFI which are exported and sold directly to Iran, or for the Humanitarian Exception (see Figure 2).

The funds may not be repatriated to Iran. [2-6-2013]

 
 

260. What is a SPECIAL PURPOSE ACCOUNT for purposes of the National Defenese Authorization Act's (NDAA) significant reduction exception?

A SPECIAL PURPOSE ACCOUNT is an account set up with conditions and safeguards that require the account to be used only for bilateral trade in goods or services between Iran and the country with primary jurisdiction over the FFI, and for sales made under the Humanitarian Exception (see FAQ 265). Funds paid as a result of bilateral trade under the NDAA s significant reduction exception may be transferred to a SPECIAL PURPOSE ACCOUNT, so long as the account is at the same FFI that facilitated or conducted the original transaction, in the country with primary jurisdiction over the FFI. [2-6-2013]


261. Are there any circumstances in which funds can be transferred to third-country financial institutions?

Transfers on or after February 6, 2013, of funds deposited in the RECIPIENT ACCOUNT or the SPECIAL PURPOSE ACCOUNT to third-country financial institutions are not covered by the National Defense Authorization Act's (NDAA) significant reduction exception, and create exposure to sanctions for FFIs conducting or facilitating such transfers, unless the transfer is to pay a third-country exporter for sales made pursuant to the Humanitarian Exception (see FAQ 265). [2-6-2013]


262. Can funds be withdrawn from the RECIPIENT ACCOUNT or a SPECIAL PURPOSE ACCOUNT?

In order for the National Defense Authorization Act's (NDAA) significant reduction exception to apply on or after February 6, 2013, funds withdrawn from the RECIPIENT ACCOUNT or SPECIAL PURPOSE ACCOUNT at the FFI may only be used to pay for bilateral trade or purchases relating to the Humanitarian Exception. Cash withdrawals from the RECIPIENT ACCOUNT or SPECIAL PURPOSE ACCOUNT would be deemed to fall outside of the scope of bilateral trade and would expose the FFI to sanctions. Bank checks written on the account may be used only to pay for bilateral trade or purchases relating to the Humanitarian Exception, and are subject to further restrictions set out in FAQ 263 below. [2-6-2013]


263. Who can receive payments from funds credited to a RECIPIENT ACCOUNT or SPECIAL PURPOSE ACCOUNT?

In order for the National Defense Authorization Act's (NDAA) significant reduction exception to apply on or after February 6, 2013, the person receiving payment (e.g., the manufacturer or service provider) for goods or services being exported to Iran must be

(i) a citizen, national, or permanent resident of the country with primary jurisdiction over the FFI maintaining the accounts containing the bilateral trade funds; or
(ii) an entity organized under the laws of the country with primary jurisdiction over the FFI maintaining such accounts.

Furthermore, the person receiving such payment may not be -

(i) the Government of Iran (as defined in 31 CFR Part 561.321) ( GOI );* or
(ii) a financial institution that appears on the List of Foreign Financial Institutions Subject to Part 561, which is maintained on the Office of Foreign Assets Control s Web site (www.treasury.gov/ofac). [2-6-2013]

*The term Government of Iran as defined in 31 CFR Part 561.321 includes: (a) The state and the Government of Iran, as well as any political subdivision, agency, or instrumentality thereof; (b) Any entity owned or controlled directly or indirectly by the foregoing; (c) Any person to the extent that such person is, or has been, or to the extent that there is reasonable cause to believe that such person is, or has been, acting or purporting to act directly or indirectly on behalf of any of the foregoing; and (d) Any person or entity identified by the Secretary of the Treasury to be the Government of Iran under 31 CFR Part 560.


264. Can funds be remitted to Iran or the Government of Iran (GOI) without exposure to sanctions?

No. If funds from the RECIPIENT ACCOUNT or the SPECIAL PURPOSE ACCOUNT are remitted, directly or indirectly, to Iran, or paid to any person that is the GOI, the FFI would be exposed to sanctions. [2-6-2013]


265. Can the funds be used for sales made under the Humanitarian Exception?

The  National Defense Authorization Act of Fiscal Year 2012 (NDAA) generally exempts from sanctions sales made under the Humanitarian Exception (i.e., the sale of agricultural commodities, food, medicine, or medical devices from third countries to Iran). Funds deposited in the RECIPIENT ACCOUNT or the SPECIAL PURPOSE ACCOUNT can be used to pay for sales made pursuant to the Humanitarian Exception. [2-6-2013]


314. Can an exporter of agricultural commodities, food, medicine, or medical devices get paid out of a Central Bank of Iran (CBI) account at a foreign financial institution (FFI) in a country with a significant reduction exception, even though the exporter is located in a third-country? Can the third-country exporter s bank handle this transaction?

Yes. So long as the transaction does not involve a designated individual or entity, banks on the Part 561 List located on OFAC s website (http://www.treasury.gov/ofac/downloads/561list.pdf), or otherwise proscribed conduct, such transactions are not sanctionable under U.S. law. Furthermore, there is no requirement under U.S. law that agricultural commodities, food, medicine, or medical devices be routed through the country with the significant reduction exception.

Such a payment mechanism is not the exclusive mechanism for the purchase of agricultural commodities, food, medicine, or medical devices under U.S. law. Other options include receiving payment from a third-country account of the CBI or a non-designated Iranian financial institution.

The Department of the Treasury Office of Foreign Assets Control regulations describe the exception for transactions relating to agricultural commodities, food, medicine, or medical devices in 31 CFR § 561.203(g) and Note 2 to 51 CFR § 561.203. Additional information and clarifying guidance about humanitarian assistance and related exports to the Iranian people can be found at /system/files/126/hum_exp_iran.pdf. [6-2013]


266. Does the November 8, 2012 designation of National Iranian Oil Company (NIOC) under E.O. 13382 impact the scope of permissible transactions by foreign financial institutions (FFIs) in significantly reducing countries?

Yes. On September 24, 2012, NIOC was identified as an agent or affiliate of Iran s Islamic Revolutionary Guard Corps ( IRGC ) under section 312 of the TRA , and designated on November 8, 2012, under E.O. 13382 for providing services and support to the IRGC. Accordingly, the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) applies to transactions with NIOC. As a result of these additional sanctions against NIOC, only transactions solely for the purchase of petroleum or petroleum products from NIOC will fall within the scope of the significant reduction exception. A FFI  in a significantly reducing country that is found to knowingly conduct or facilitate other types of significant transactions with NIOC (i.e., transactions unrelated to the purchase of petroleum or petroleum products from Iran) would face exposure to CISADA sanctions.

Example 3: If a FFI in a country with a significant reduction exception facilitates a transaction enabling a company in that country to purchase drilling equipment from NIOC, the FFI risks restrictions on, or loss of, correspondent and payable-through account access in the United States, because the transaction was not solely for the purchase of petroleum or petroleum products from Iran. [2-6-2013]


267. What are definitions for the following NDAA terms: significant financial transaction, knowingly, food, medicine, and medical devices, foreign financial institution, and country with primary jurisdiction over the FFI, ?

These definitions are set out in 31 CFR Part 561. [2-6-2013]


 

Iran Freedom and Counter-Proliferation Act of 2012 (IFCA)

Certain statutory provisions of the Iran Freedom and Counter-Proliferation Act of 2012 (IFCA) were previously implemented through E.O. 13645 of June 3, 2013, which was revoked by E.O. 13716 of January 16, 2016. E.O. 13716, which also carried forward certain IFCA implementation authorities, was revoked by E.O. 13846 of August 6, 2018, Reimposing Certain Sanctions With Respect to Iran . Please be advised that certain provisions of E.O. 13645, including IFCA implementation authorities, have been incorporated into the New E.O. FAQs relating to E.O. 13846 can be found here. FAQs relating to E.O. 13645 have been archived and can be found here.[08-06-18]

 


General Questions


313. What is the Iran Freedom and Counter-Proliferation Act of 2012 (IFCA)?

IFCA was signed into law on January 2, 2013, as a part of the National Defense Authorization Act for Fiscal Year 2013, and provides for several new sanctions related to Iran. IFCA authorizes broad sanctions on: certain activities related to Iran s energy, shipping, and shipbuilding sectors; the sale, supply, or transfer to or from Iran of precious and certain other metals, graphite, coal, and industrial software; the provision of underwriting services, insurance, or reinsurance to activities and persons targeted by U.S. sanctions against Iran; financial transactions involving sanctioned Iranian individuals and entities; and persons involved in the diversion of goods intended for the Iranian people. Most of the IFCA provisions target conduct occurring on or after July 1, 2013.

The U.S. Department of the Treasury will be issuing regulations to implement certain provisions in IFCA. In addition, the U.S. Department of State expects to adopt an interpretation of IFCA similar to that set forth below. [06-03-13]

289. How will the following Iran Freedom and Counter-Proliferation Act (IFCA) terms be interpreted: Iran, knowingly, significant, and transfer ?

As a general matter, we intend to rely, where applicable, on definitions of terms previously included in Treasury regulations.

Iran

The Iranian Financial Sanctions Regulations (31 CFR part 561) (IFSR) define Iran as the Government of Iran and the territory of Iran and any other territory or marine area, including the exclusive economic zone and continental shelf, over which the Government of Iran claims sovereignty, sovereign rights, or jurisdiction, provided that the Government of Iran exercises partial or total de facto control over the area or derives a benefit from economic activity in the area pursuant to international arrangements. (31 CFR § 561.329)

knowingly

The IFSR define knowingly with respect to conduct, a circumstance, or a result, to mean that a person has actual knowledge, or should have known, of the conduct, the circumstance, or the result. (31 CFR § 561.314)

significant

As a general matter, in determining for purposes of IFCA and relevant Executive orders whether transactions, financial transactions, or financial services are significant, the Department of the Treasury will rely on the interpretation set out in §561.404 of the IFSR. The IFSR provide that the Department of the Treasury may consider the totality of the facts and circumstances set forth a list of broad factors that can play a role in the determination whether transactions, financial services, and financial transactions are significant, including: (a) the size, number, and frequency of the transactions, financial services, or financial transactions; (b) the natureof the transactions, financial services, or financial transactions, including their type, complexity, and commercial purpose; (c) the level of awareness of management and whether the transactions are part of a pattern of conduct; (d) the nexus of the transactions, financial services, and financial transactions and blocked persons; (e) the impact of the transactions, financial services, and financial transactions on statutory objectives; (f) whether the transactions, financial services, and financial transactions involve deceptive practices; (g) whether the transactions solely involve the passive holdings of Central Bank of Iran (CBI) reserves or repayment by the CBI of official development assistance or the transfer of funds required as a condition of Iran s membership in an international financial institution; and (h) other relevant factors that the Secretary of the Treasury deems relevant. We anticipate adopting a similar approach to interpreting the term significant as it applies to goods or services. (31 C.F.R. §561.404

transfer

We anticipate that regulations to be promulgated will define transfer to include import, transshipment, export, or reexport, whether direct or indirect. [08-06-18]


290. Are payments or deliveries that are made on or after July 1, 2013, for contracts that existed prior to July 1, 2013, exempted from IFCA provisions?

There is no general exception for payments, sales, deliveries, or transfers arising out of contracts entered into prior to July 1, 2013, on or after which date certain activities become sanctionable under IFCA . The assessment of whether such payments are significant or result in the transfer of significant goods or services or significant financial support will be done on a case-by-case basis in line with the criteria discussed above. [06-03-13]


292. What are the implications of IFCA on the provision of humanitarian goods to the people of Iran?

IFCA generally excepts from sanctions transactions for the sale of agricultural commodities, food, medicine, or medical devices to Iran, as set out in more detail in Q&As 297 and 304.[08-06-18]


Sanctions Relating to Iran s Energy, Shipping, and Shipbuilding Sectors


293. What will the energy, shipping, and shipbuilding sectors of Iran mean for the purposes of IFCA?

We anticipate that regulations to be promulgated will define energy sector of Iran to include activities involving the exploration, extraction, production, refinement, or liquefaction of petroleum, natural gas, or petroleum products in Iran. (See also discussion of activities involving natural gas in Q&A 297.)

We anticipate that regulations to be promulgated will define shipping sector of Iran to include activities involving the transportation of goods by seagoing vessels, including oil tankers and cargo vessels, flying the flag of the Islamic Republic of Iran, or owned, controlled, chartered, or operated directly or indirectly by the Government of Iran.

We anticipate that regulations to be promulgated will define shipbuilding sector of Iran to include activities involving the construction of seagoing vessels, including oil tankers and cargo vessels, in Iran. [08-06-18]


294. How will I know if someone is part of Iran s energy, shipping, or shipbuilding sectors or is a port operator in Iran?

Persons determined to be part of Iran s energy, shipping, or shipbuilding sectors, or a port operator in Iran for purposes of IFCA section 1244(c) will be identified as such on the SDN List. Knowingly providing certain significant support to persons determined to be part of Iran s energy, shipping, or shipbuilding sectors, or a port operator in Iran will have exposure to sanctions, unless the transaction is excepted (see also Q&A 297). [06-03-13]


295. What are goods or services used in connection with Iran s energy, shipping, or shipbuilding sectors for purposes of IFCA section 1244(d)(3)?

We anticipate that regulations to be promulgated will define goods and services used in connection with Iran s energy, shipping and shipbuilding sectors to include:

a. Energy Sector: In the case of Iran s energy sector, goods or services that contribute to,

  • Iran s ability to develop its domestic petroleum resources;

  • The maintenance or expansion of Iran s domestic production of petroleum products; and

  • Iran s ability to import or export petroleum or petroleum products.

b. Shipping Sector: In the case of Iran s shipping sector,

  • The provision of crude and product tankers to Iran;

  • The provision of registry, flagging, or classification services of any kind;

  • The supervision of and participation in the repair of ships and their parts;

  • The inspection, testing, and certification of marine equipment materials and components;

  • The carrying out of surveys, inspections, audits and visits, and the issuance, renewal or endorsement of the relevant certificates and documents of compliance, as they relate to ships and shipping; and

  • Any other goods or services relating to the maintenance, supply, bunkering, and docking of vessels flying the flag of the Islamic Republic of Iran, or owned, controlled, chartered, or operated directly or indirectly by, or for or on behalf of the Government of Iran (GOI) or an Iranian person.

c. Shipbuilding Sector: In the case of Iran s shipbuilding sector,

  • The building and refit of vessels;

  • The provision or refit of items such as (i) steam turbines and their parts for marine propulsions, (ii) marine propulsion engines and parts used solely or principally with them, (iii) other gas turbines for marine propulsion, (iv) ship or boat propellers and blades, and (v) direction finding compasses and other navigational instruments and appliances solely for the maritime industry;

  • Other goods used in connection with building and propulsion of vessels; and

  • Technical assistance and training relating to, and financing of, the building, maintenance or re-fitting of vessels.

Sections 1244(d)(1) and (2) of IFCA make sanctionable certain transactions for the sale, supply, or transfer to or from Iran of such goods and services if they are significant goods or services used in connection with Iran s energy, shipping, or shipbuilding sectors. (See Q&A 289 above for an interpretation of significant. ) The provision of goods or services identified above could be sanctionable regardless of whether any person involved in the transaction has been determined to be part of Iran s energy, shipping, or shipbuilding sectors. [06-03-13]


296. Will the provision of bunkering services to a non-Iranian vessel carrying non-sanctionable goods to or from Iran be subject to sanctions?

If a non-Iranian vessel is transporting non-sanctionable goods to or from Iran, the bunkering of that non-Iranian vessel in a country other than Iran and related payments for these bunkering services will not be subject to sanctions, only if (1) the transaction either does not involve U.S. persons (including U.S. financial institutions) or U.S.-owned or -controlled foreign entities, or the transaction is exempt from OFAC regulation or authorized by OFAC if it does involve U.S. persons (including U.S. financial institutions) or U.S.-owned or -controlled foreign entities, and (2) the transaction does not involve persons on OFAC s List of Specially Designated Nationals and Blocked Persons (SDN List) that have been designated in connection with Iran s support for international terrorism or proliferation of weapons of mass destruction, including designated Iranian financial institutions or the Islamic Revolutionary Guard Corps (IRGC), or activity that is subject to other sanctions authorities. [09-05-2019]


691. Will the provision of bunkering services to a non-Iranian vessel carrying sanctionable goods to or from Iran be subject to sanctions?

If a non-Iranian vessel is transporting sanctionable goods to or from Iran (including, but not limited to, petroleum, petroleum products, or petrochemical products from Iran; goods used in connection with the automotive sector of Iran; or iron, iron products, aluminum, aluminum products, steel, steel products, copper, or copper products from Iran), bunkering of that non-Iranian vessel in a country other than Iran and related payments for these bunkering services risk being subject to sanctions unless an applicable waiver or exception applies. For example, persons providing bunkering services to a non-Iranian vessel transporting petroleum or petroleum products from Iran could be designated under subsection 1(a)(ii) of E.O. 13846 if such activities involve the provision of material support for, or goods or services to or in support of, NIOC or NICO. Persons that knowingly provide bunkering services to a non-Iranian vessel carrying only petroleum or petroleum products from Iran could likewise be sanctioned under section 3(a)(ii) of E.O. 13846 if that transaction is determined to be a significant transaction for the purchase, acquisition, sale, transport, or marketing of those items. [09-05-2019]


692. Will the provision of bunkering services for an Iranian vessel be subject to sanctions?

Section 1244(d)(1) of IFCA makes sanctionable knowingly selling, supplying, or transferring to or from Iran significant goods or services used in connection with Iran s energy, shipping, or shipbuilding sectors. (See FAQ 289 above for an interpretation of significant. ) The provision of bunkering services to a vessel flying the flag of the Islamic Republic of Iran, or owned, controlled, chartered, or operated directly or indirectly by, for, or on behalf of the Government of Iran (GOI) or an Iranian person, could be sanctionable under this authority, regardless of whether the transaction involves persons that have been determined to be part of Iran s energy, shipping, or shipbuilding sectors pursuant to Section 1244(c) of IFCA. Likewise, pursuant to section 1244(d)(2) of IFCA, a foreign financial institution could be exposed to sanctions if it knowingly conducts or facilitates a significant financial transaction for the sale, supply, or transfer to or from Iran of goods or services used in connection with Iran s energy, shipping, or shipbuilding sectors. Payments for the provision of bunkering services to a vessel flying the flag of the Islamic Republic of Iran or owned, controlled, chartered, or operated directly or indirectly by, for, or on behalf of the GOI or an Iranian person could be sanctionable under this authority, regardless of whether the transaction involves persons that have been determined to be part of Iran s energy, shipping, or shipbuilding sectors pursuant to Section 1244(c) of IFCA. (See FAQ 295).

In addition, non-U.S. persons that provide bunkering services for an Iranian vessel that has been identified as blocked property of an Iranian person on OFAC s List of Specially Designated Nationals and Blocked Persons or that make related payments for these bunkering services risk being designated themselves

However, the provision of bunkering services for an Iranian vessel transporting goods subject to an exception, such as agricultural commodities, food, medicine, or medical devices, to Iran, or subject to an applicable waiver and the making of related payments for these bunkering services will not be exposed to sanctions, unless the transactions involve persons on the SDN List that have been designated under E.O. 13224 or E.O. 13382 in connection with Iran s support for international terrorism or proliferation of weapons of mass destruction, including certain designated Iranian financial institutions or the Islamic Revolutionary Guard Corps (IRGC), as described in section 104(c)(2)(E) of CISADA, or activity that is subject to other sanctions authorities. [09-05-2019]


297. Are there any exceptions to the sanctions provisions of section 1244 of IFCA?

The following transactions are excepted from the provisions of section 1244 of IFCA.

a. Transactions for the sale of agricultural commodities, food, medicine, or medical devices to Iran or for the provision of humanitarian assistance to the people of Iran.

b. The export of petroleum or petroleum products from Iran to a country with a significant reduction exception under section 1245(d)(4)(D)(i) of the National Defense Authorization Act for Fiscal Year 2012 (NDAA 2012). 

c. A significant financial transaction conducted or facilitated by a foreign financial institution (FFI), provided that a significant reduction exception under 1245(d)(4)(D)(i) of NDAA 2012 applies to the country with primary jurisdiction over the FFI and the financial transaction is for trade in goods or services (i) between Iran and the country with primary jurisdiction over the FFI and (ii) not otherwise subject to sanctions under the law of the United States, and any funds owed to Iran as a result of the trade are credited to an account located in the country with primary jurisdiction over the FFI. We anticipate the implementation of these trade requirements to be similar to the trade requirements set forth in the Iranian Financial Sanctions Regulations (IFSR), in particular 31 CFR §561.203(j) and 31 CFR §561.203(k).

d. The sale, supply, or transfer of natural gas to or from Iran. IFCA section 1244, however, does set out sanctions that may apply to FFIs that conduct or facilitate a transaction for the sale, supply, or transfer of natural gas to or from Iran unless the financial transaction is for trade in goods or services (i) between Iran and the country with primary jurisdiction over the FFI and (ii) not otherwise subject to sanctions under the law of the United States, and any funds owed to Iran as a result of the trade are credited to an account located in the country with primary jurisdiction over the FFI. We anticipate the implementation of these trade requirements to be similar to the trade requirements set forth in the IFSR, in particular 31 CFR §561.203(j) and 31 CFR §561.203(k).

e. Certain activities relating to the pipeline project to supply natural gas from the Shah Deniz gas field in Azerbaijan to Europe and Turkey. [08-06-18]


315. Will routine payments or fees be subject to sanctions if they are made to a person determined to be a port operator in Iran and if the vessel is carrying non-sanctioned goods?

Any company involved in loading or unloading cargo in Iran should exercise great caution to avoid engaging in transactions with entities designated by the United States, including the Tidewater Middle East Co. which was designated for its involvement in Iran s proliferation of weapons of mass destruction. However, to the extent that a shipping company transacts with port operators in Iran that have been identified as such under IFCA but not otherwise designated, and as long as such 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, we anticipate that such transactions would not be considered significant transactions for the purposes of IFCA. Non-routine and/or large payments or fees that materially exceed standard industry rates could expose a person to sanctions. Furthermore, providing any port operator in Iran with any significant financial, material, technological, or other support could expose a person to sanctions. [08-06-18]


Sanctions Relating to the Sale, Supply, or Transfer of Certain Materials to or from Iran (relating to IFCA)
IFCA provides for sanctions involving the sale, supply, or transfer of certain materials to or from Iran.


 

298. For purposes of IFCA, what materials are considered graphite, raw or semi-finished metals?

For purposes of IFCA, we anticipate that regulations to be promulgated will define graphite, raw or semi-finished metals described in section 1245(d) of IFCA to include steels; aluminum metal and its alloys; base metals of single or complex borides of titanium; beryllium metal and its alloys; boron metal and its alloys; cobalt metal and its alloys; copper infiltrated tungsten metal; copper-beryllium metal; germanium metal and its alloys; graphites; hastelloy; inconel; magnesium metal and its alloys; molybdenum metal and its alloys; neptunium-237 metal and its alloys; nickel metal and its alloys; nickel aluminide metals; niobium metal and its alloys; niobium-titanium filaments; plutonium metal and its alloys; porous nickel metal; silver infiltrated tungsten metal; tantalum metal and its alloys; tellurium metal and its alloys; titanium aluminide metals; titanium metal and its alloys; tungsten metal, tungsten carbide metal, and their alloys; uranium titanium alloy metals; and zirconium metal and its alloys and compounds. [06-03-13]


299. For purposes of IFCA, what are considered precious metals?

For purposes of IFCA, we anticipate that regulations to be promulgated will define the term precious metals to include silver (including silver plated with gold or platinum, unwrought or in semi-manufactured forms, or in powder form); gold (including gold plated with platinum, unwrought or in semi-manufactured forms, or in powder form); base metals or silver, clad with gold, not further worked than semi-manufactured; platinum, unwrought or in semi-manufactured forms, or in powder form; iridium; osmium; palladium; rhodium; ruthenium; base metals, silver or gold, clad with platinum, not further worked than semi-manufactured; waste and scrap of precious metal or of metal clad with precious metals, other waste and scrap containing precious metal or precious-metal compounds, of a kind used principally for the recovery of precious metal. [06-03-13]


300. For purposes of sanctions under section 1245, how will I know which sectors are controlled by Iran s Islamic Revolutionary Guard Corps?

Pursuant to delegated authority, the Secretary of State issues periodic reports pursuant to section 1245(e) of IFCA with respect to which sectors of the Iranian economy are controlled directly or indirectly by Iran s Islamic Revolutionary Guard Corps (IRGC). Given the opaque business environment in Iran and the significant role that the IRGC plays in the Iranian economy, OFAC recommends that a person considering business in Iran or with Iranian persons conduct due diligence sufficient to ensure that it is not knowingly engaging in transactions with the IRGC, or its officials, agents, or affiliates. [08-06-18]


301. How will the determination be made as to whether materials are used in a manner that would make them subject to sanctions under section 1245 of IFCA?

A FFI, prior to conducting or facilitating a significant financial transaction for the sale, supply, or transfer to or from Iran of the materials listed in 1245(d) as described in part in Q&A 298 will need to undertake due diligence to ensure that the transaction does not involve the materials being sold, supplied, or transferred, directly or indirectly, to or from Iran for sanctionable uses under section 1245.  Pursuant to delegated authority, the Secretary of State issues periodic reports pursuant to section 1245(e) of IFCA, which contains determinations on which materials identified in section 1245(d) are used by Iran as a medium for swap or barter, are listed as assets on the national balance sheet of Iran, or are used in connection with the nuclear, military, or ballistic missile programs of Iran. [08-06-18]


302. Are there any exceptions to section 1245 of IFCA?

A person will not be subject to sanctions under section 1245 of IFCA if a determination is made by the Department of the Treasury or the Department of State, as appropriate, that the person has established and enforced official policies, procedures, and controls to ensure that the person does not sell, supply, or transfer to or from Iran, or facilitate or conduct a significant financial transaction to sell supply, or transfer to or from Iran, materials listed in section 1245 as sanctioned under section 1245. The Department of the Treasury or the Department of State, as appropriate, will make this determination on a case by case basis as part of an investigation or enforcement action by the relevant Department. [06-03-13]


Sanctions Relating to Insurance, Reinsurance, or Underwriting (relating to IFCA)  


 

303. Which insurance, reinsurance, or underwriting activities are potentially subject to sanctions under IFCA's section 1246(a)(1)?

A number of insurance activities are subject to sanctions under IFCA, including knowingly providing insurance, reinsurance, or underwriting services to or for Iranian persons on the SDN List to or for any person designated in connection with Iran s support for international terrorism or WMD proliferation, or for activities with respect to Iran for which sanctions have been imposed (e.g., knowingly engaging in a significant transaction for the purchase, acquisition, sale, transport, or marketing of petroleum or petroleum products from Iran). However, the provision of insurance, reinsurance, or underwriting services to non-Iranian persons on the SDN List is generally not sanctionable under section 1246(a)(1) of IFCA if the provision of insurance, reinsurance or underwriting services is not to or for an Iranian person on the SDN List, to or for any person designated in connection with Iran s support for international terrorism or WMD proliferation, or for any activity with respect to Iran for which sanctions have been imposed. [11-27-2019]


304. Are there exceptions to insuring, reinsuring, or underwriting sanctioned activities?

Yes. IFCA includes the following exceptions to insuring, reinsuring, or underwriting sanctioned activities.

a. Transactions for the sale of agricultural commodities, food, medicine, or medical devices to Iran or for the provision of humanitarian assistance to the people of Iran can be insured, reinsured, or underwritten.
b. A person that provides insurance, reinsurance, or underwriting services to sanctioned activity, if a determination is made by the Department of the Treasury or the Department of State, as appropriate, that the person has established and enforced official policies, procedures, and controls to ensure that the person does not underwrite or enter into a contract to provide insurance or reinsurance for activities targeted under section 1246 of IFCA. The Department of the Treasury or the Department of State, as appropriate, will make this determination on a case by case basis as part of an investigation or enforcement action by the relevant Department. [06-03-13]

 
Executive Order 13645 of June 3, 2013, "Authorizing the Implementation of Certain Sanctions Set Forth in the Iran Freedom and Counter-Proliferation Act of 2012 and Additional Sanctions with Respect to Iran"
 

E.O. 13645 was revoked by E.O. 13716 of January 16, 2016. Please be advised that certain provisions of E.O. 13645 have been incorporated into E.O. 13846 of August 6, 2018, Reimposing Certain Sanctions With Respect to Iran . FAQs relating to E.O. 13846 can be found here. FAQs relating to E.O. 13645 have been archived and can be found here.

 

General Licenses (GL) for Agricultural Commodities, Medicine, and Medical Devices in the Iranian Transactions and Sanctions Regulations

318. Does the GL for medical devices authorize the exportation or reexportation of all medical devices?

No. The GL for medical devices appearing at section 560.530(a)(3)(i) of the Iranian Transactions and Sanctions Regulations (ITSR) authorizes covered persons, as defined in section 560.530(e)(4), to export or reexport to Iran medical devices as defined in section 560.530(e)(3) of the ITSR, except for items on the List of Medical Devices Requiring Specific Authorization, which is maintained on OFAC s website. This list will be published in the Federal Register, as will any changes to the list. [12-22-16]


319. Does the GL for medical devices authorize the exportation or reexportation of these items to all entities in Iran?

No. While the GL under section 560.530(a)(3)(i) of the Iranian Transactions and Sanctions Regulations (ITSR) authorizes exports or reexports of certain medical devices to most entities in Iran, it does not authorize exports or reexports to military, intelligence, or law enforcement purchasers or importers, nor does it authorize exports or reexports to persons whose property and interests in property are blocked under any of the programs administered by OFAC, except for persons whose property and interests in property are blocked solely pursuant to Executive Order 13599 and the ITSR. When engaging in activities pursuant to this GL, exporters and reexporters are expected to undertake due diligence regarding all parties to the transactions, just as they would when acting pursuant to a specific license issued by OFAC. [12-22-16]


361. What items and persons are excluded from the agricultural commodities general license in the Iranian Transactions and Sanctions Regulations (ITSR)?

The specified items excluded from the scope of the agricultural commodities general license are: castor beans, castor bean seeds, certified pathogen-free eggs (unfertilized or fertilized), dried egg albumin, live animals (excluding live cattle, shrimp, and shrimp eggs), embryos (excluding cattle embryos), Rosary/Jequirity peas, non-food-grade gelatin powder, peptones and their derivatives, super absorbent polymers, western red cedar, and all fertilizers.

The persons excluded from the scope of the agricultural commodities general license are Iranian military, intelligence, or law enforcement purchasers or importers. In addition, the agricultural commodities general license does not authorize exports or reexports to persons whose property and interests in property are blocked under any of the programs administered by OFAC, except for persons whose property and interests in property are blocked solely pursuant to  Executive Order 13599and the ITSR.

Exports or reexports involving the excluded items or excluded persons discussed above continue to require the level of review afforded by specific licensing and therefore are not authorized by the agricultural commodities general license. [12-22-16]


362. Is the exportation or reexportation of non-U.S.-origin agricultural commodities, medicine, or medical devices by a U.S. person to Iran authorized?

Yes. The definitions of the terms agricultural commodities, medicine, and medical device used in the relevant general licenses in the