OFAC Expands Humanitarian Services License for NGOs in Iran

The US Treasury Department’s Office of Foreign Assets Control (OFAC) issued a new General License on Tuesday, September 10, 2013, authorizing nongovernmental organizations (NGOs) to export or re-export services to or related to Iran in support of certain humanitarian not-for-profit activities.

The General License is tailored to benefit the Iranian people. Specifically, General License E authorizes the exportation of services by NGOs in support of certain not-for-profit humanitarian activities, including humanitarian projects to meet basic human needs; non-commercial reconstruction projects in response to natural disasters for a period of up to two years; environmental and wildlife conservation projects; and human rights and democracy building projects.

Humanitarian projects to meet basic human needs in Iran include, but are not limited to, the:

• Provision of donated health-related services;
• Operation of orphanages;
• Distribution of donated articles, such as food, clothing and medicine intended to be used to relieve human suffering; and
• Donated training related to any of the foregoing activities.

Activities related to human rights and democracy building projects in Iran include, but are not limited to, the:

• Sponsorship of and attendance and training at conferences in Iran related to human rights projects;
• Democracy building or civil society development;
• Efforts to increase access to information and freedom of expression; and
• Public advocacy, public policy advice, polling, or surveys relating to human rights and democracy building.

Note 2 to the General License also authorizes US depository institutions and US registered brokers and dealers in securities to process transfers of funds in furtherance of the authorized humanitarian activities, and these financial institutions are instructed that they can rely on the originator of the funds transfer for compliance with the general license conditions (provided they have no reason to know of non-compliance).

However, the General License comes with strings. For example,

• USD $500,000 annual limit: no single NGO’s transfer of services or funds may exceed USD $500,000 in the aggregate over a 12-month period; and
• Quarterly reporting requirement: NGOs engaged in the above activities must submit reports on a quarterly basis, providing certain information including a detailed description of the services exported or re-exported to Iran, any Iranian NGOs, Government of Iran entities, Iranian financial institutions, or other Iranian persons involved in the activities; the dollar amounts of any transfers to Iran; and the beneficiaries of those transfers.

Additional restrictions apply. For example, the General License does not authorize:

• The export of services to any person whose property and interests in property are blocked and/or prohibited; or
• Activities in furtherance of Iranian military or industrial infrastructure or potential, or in connection with the Iranian energy, automobile, shipping, and shipbuilding sectors.

Finally, the General License does not authorize activities by a US-owned or -controlled foreign entity that would be prohibited by another section of the OFAC sanctions regulations (other than 31 C.F.R. § 560.215) if engaged in by a US person or in the United States.

Combined with the recent expansion in July 2013 in the List of Basic Medical Supplies eligible for under a general license for export to Iran, this new General License further paves the way for humanitarian efforts to help the Iranian people. A copy of the General License can be found here.

Arent Fox has significant experience in helping NGOs and other non-profit organizations navigate and comply with US economic sanctions and export controls. If you have any questions regarding the above, please contact Matt Nolan, Kay Georgi, and Keith Huffman with Arent Fox’s International Trade practice.