OFAC Releases New Licenses, Regulation Updates to Ease Delivery of Humanitarian Aid
The Office of Foreign Assets Control this week announced what it said are "historic steps" to implement new humantiarian-related authrotizations across its sanctions programs in an effort to better allow the flow of aid to sanctioned countries. The move builds on a U.N. Security Council decision earlier this month that established a humanitarian carve-out across sanctions regimes, allowing nongovernmental organizations, banks and others a general license for certain aid-related transactions involving sanctioned jurisdictions (see 2212120054). Treasury said the U.S. is "the first country in the world" to implement the U.N. carveout in its own borders.
OFAC issued a final rule Dec. 20 to add, amend or update general licenses involving official U.S. government business and the official business of certain international organizations and entities. Another final rule adds general licenses to authorize certain transactions by NGOs and transactions related to the "provision of agricultural commodities, medicine, medical devices, replacement parts and components, or software updates." Both rules are effective Dec. 21.
The new licenses reflect the United States’ "commitment to ensuring that humanitarian assistance and related trade continues to reach at-risk populations through legitimate and transparent channels, while maintaining the effective use of targeted sanctions," Deputy Treasury Secretary Wally Adeyemo said. The actions follow an October 2021 Treasury review of its sanctions, in which the agency recommended streamlining its humanitarian authorizations across sanctions programs (see 2110190044).
OFAC also published four new frequently asked questions to accompany this action. In one FAQ, OFAC stressed said U.S. financial institutions may operate accounts for persons engaging in the activities authorized by the new general licenses. U.S. banks can assess "whether a particular transaction" complies with the new licenses by "reasonably" relying on the information "available to them in the ordinary course of business," OFAC said, "provided that the financial institution does not know or have reason to know that the transaction is outside the scope of the applicable" license.
The agency also said non-U.S. people and foreign banks facilitating these transactions don't risk sanctions exposure, as long as the transactions are "otherwise exempt or authorized for U.S. persons." OFAC said it will consider specific license requests on a case-by-case basis for activities not covered by the new general licenses, and licensing questions should be directed to the OFAC Compliance Hotline.
OFAC also clarified that the new rules and licenses don't "restrict the scope" of any existing exemptions or general licenses for humanitarian aid. "Persons conducting humanitarian activities pursuant to these programs may continue to rely on existing exemptions," OFAC said. The agency also linked to a U.N. organizational chart that lists the official organizations that qualify for one of the new general licenses.