1.4. Are the sanctions lifted via Executive Order 13716 reinstated as of August 7, 2018?
Executive Order of August 6, 2018, “Reimposing Certain Sanctions With Respect to Iran” (the “New Iran E.O.”) reimposes relevant provisions of E.O.s 13574, 13590, 13622, and 13645 that were revoked by E.O. 13716 at the end of the applicable wind-down period (i.e., on or after August 7, 2018, or on or after November 5, 2018, depending on the activity involved). In addition, to provide clarity and consolidate relevant authorities into a single document, the New Iran E.O. revokes E.O.s 13716 and 13628 and continues in effect certain sanctions authorities provided for in those E.O.s. [08-06-2018]
2.3 Under what circumstances are goods or services considered “fully provided or delivered” prior to the expiration of the relevant wind-down period, as referenced in FAQ 2.1 above?
OFAC looks to the industry standard to determine whether particular goods or services are considered fully provided or delivered prior to the expiration of the relevant wind- down period. As a general matter, goods or services will be considered fully provided or delivered when the party providing or delivering the goods or services has performed all the actions and satisfied all the obligations necessary to be eligible for payment or other agreed-to compensation. With respect to goods exported to or from Iran, at a minimum, title to the goods must have transferred to the relevant party. [08-06-2018]
2.4 Can I, as a non-U.S., non-Iranian person, receive payments after the relevant wind-down period ends for goods or services that were fully provided or delivered during the relevant wind-down period pursuant to contracts entered into prior to May 8, 2018?
Yes, subject to the conditions set out below and in FAQ 2.1 above, non-U.S., non-Iranian persons may receive payment after the end of the relevant wind-down period for goods or services fully provided or delivered to an Iranian counterparty prior to expiration of the relevant wind-down period (see FAQ 2.3 above). In particular, the goods or services must have been fully provided or delivered prior to the end of the applicable wind-down period pursuant to a written contract or written agreement entered into prior to May 8, 2018; the relevant activities must have been consistent with U.S. sanctions in effect at the time of delivery or provision, including that the activities did not involve persons on the SDN List at the time of the transaction; and any payments must be consistent with U.S. sanctions, including that payments can not involve U.S. persons or the U.S. financial system, unless the transactions are exempt from regulation or authorized by OFAC. [08- 06-2018]
2.5 Can I, as a U.S. person or U.S.-owned or -controlled foreign entity, receive payments after the relevant wind-down period ends for goods or services that were fully provided or delivered during the relevant wind-down period under an OFAC wind-down authorization and pursuant to a contract entered into prior to May 8, 2018?
The wind-down authorizations allow U.S. persons and U.S.-owned or -controlled foreign entities to receive payments for activities conducted pursuant to such wind-down authorizations only during their validity periods. For example, a U.S.-owned or – controlled foreign entity may receive payment through 11:59 p.m. eastern standard time on November 4, 2018 for Iran-related activities undertaken pursuant to section 560.537 of the ITSR (winding down of transactions relating to U.S.-owned or -controlled foreign entities).
Any payment following the end of the relevant wind-down period for activities undertaken pursuant to a wind-down authorization, including from an Iranian counterparty, would require specific authorization from OFAC. OFAC will evaluate such requests for specific licenses on a case-by-case basis.
Any request for a specific license should provide sufficient details for OFAC to evaluate the application, including: whether the relevant transactions complied with U.S. sanctions as in effect at the time of the transactions; whether the activities were performed under a written contract or written agreement entered into prior to May 8, 2018; and why the applicant was unable to receive the payment for which authorization is sought prior to the end of the relevant wind-down period. OFAC will generally deny requests to receive payment for activities that were not authorized under the relevant wind-down authorizations or that were not undertaken pursuant to a written contract or written agreement entered into prior to May 8, 2018. [08-06-2018]
2.6 Can I enter into a new contract or engage in new business activity during the relevant wind-down period that is in furtherance of a contract entered into prior to May 8 and is ordinarily incident and necessary to the wind down of Iran-related business? For example, is it sanctionable if a new purchase order is entered into during the wind-down period if such business is contemplated under a Master Services Agreement entered into prior to May 8?
Provided that the new contract or business is in furtherance of, a written contract or written agreement entered into prior to May 8, 2018, and is necessary and ordinarily incident to the wind down of activities under the pre-May 8, 2018 written contract or written agreement, generally, OFAC would not consider entering into such new contracts during the relevant wind-down period to be sanctionable as new business. OFAC will evaluate matters falling outside these parameters on a case-by-case basis to determine whether the activity is sanctionable or violates OFAC regulations. [08-06-2018]
2.7 Is it sanctionable for non-U.S., non-Iranian persons to engage in transactions related to the provision of humanitarian and consumer goods to Iran?
The U.S. maintains broad authorizations and exceptions under U.S. sanctions that allow for the sale of agricultural commodities, food, medicine, and medical devices to Iran by U.S. persons and non-U.S. persons. Broadly speaking, transactions for the sale of agricultural commodities, food, medicine, or medical devices to Iran are not sanctionable unless they involve certain persons on the SDN List, including designated Iranian financial institutions or the Islamic Revolutionary Guard Corps (IRGC), or otherwise sanctionable conduct. Additional guidance relating to these authorizations and exceptions can be found on the OFAC website here [hyperlink to https://www.treasury.gov/resource- center/sanctions/Programs/Documents/iran_guidance_med.pdf] and here [hyperlink to https://www.treasury.gov/resource- center/sanctions/Programs/Documents/hum_exp_iran.pdf].
Transactions by non-U.S. persons related to the export to Iran of consumer goods that do not fall within these exceptions, but are not expressly targeted by U.S. sanctions should not involve persons on the SDN List, including designated Iranian financial institutions or the IRGC. In addition, such transactions should not involve U.S. persons or transit the U.S. financial system, unless the activities and/or transactions are exempt from regulation or authorized by OFAC. [08-06-2018]