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OFAC issues General License to aid Syrian areas not controlled by government

OFAC has issued Syria General License 22:

OFFICE OF FOREIGN ASSETS CONTROL
Syrian Sanctions Regulations 31 CFR part 542
GENERAL LICENSE NO. 22
Authorizing Activities in Certain Economic Sectors in Non-Regime Held Areas of Northeast and Northwest Syria

(a) Except as provided in paragraph (c) of this general license, transactions prohibited by § 542.206 or 542.207 of the Syrian Sanctions Regulations, 31 CFR part 542 (SySR), that are ordinarily incident and necessary to activities in the following economic sectors in the areas of northeast and northwest Syria described in the Annex to this general license are authorized:

(1) agriculture;
(2) information and telecommunications; (3) power grid infrastructure;
(4) construction;
(5) finance;
(6) clean energy;
(7) transportation and warehousing;
(8) water and waste management;
(9) health services;
(10) education;
(11) manufacturing; and
(12) trade.

(b) Except as provided in paragraph (c) of this general license, the purchase of refined petroleum products of Syrian origin for use in Syria prohibited by § 542.209 of the SySR that is ordinarily incident and necessary to the activities described in paragraph (a) of this general license are authorized.

Note to paragraphs (a) and (b). The authorizations in paragraphs (a) and (b) of this general license include the processing or transfer of funds on behalf of third-country entities to or from Syria in support of the transactions authorized by paragraphs (a) and (b) of this general license. U.S. financial institutions and U.S. registered money transmitters may rely on the originator of a funds transfer with regard to compliance with paragraphs (a) or (b) of this general license, provided that the financial institution does not know or have reason to know that the funds transfer is not in compliance with paragraphs (a) or (b) of this general license.

(c) This general license does not authorize:

(1) Any transactions involving any person, including the Government of Syria, whose property or interests in property are blocked pursuant to the SySR or the Caesar Syria Civilian Protection Act of 2019; or
(2) The importation into the United States of petroleum or petroleum products of Syrian origin prohibited by § 542.208 of the SySR.

Note to General License 22. See § 542.510 of the SySR for a general license authorizing the exportation or reexportation of certain items and services to Syria.

as well as new Frequently Asked Questions (FAQs):

1045. How can I tell which areas of northeast and northwest Syria fall within the scope of Syria General License (GL) 22?

For the purposes of Syria GL 22, the Annex in GL 22 identifies areas of northeast and northwest Syria in which activities described in GL 22 are authorized as of May 12, 2022.

Syria GL 22 does not authorize activities involving persons blocked pursuant to the Syrian Sanctions Regulations, 31 C.F.R. part 542, including the Government of Syria, or persons that may be subject to sanctions under other sanctions programs administered by OFAC (e.g., transactions with blocked persons designated under Executive Order (E.O.) 13224, as amended (OFAC’s counterterrorism authority), or E.O. 13894 (OFAC’s Syria-related authority)), unless exempt or otherwise authorized by OFAC.

Persons conducting activities in certain non-regime held areas in northeast and northwest Syria pursuant to Syria GL 22 can use OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List) Search Tool to identify organizations and individuals explicitly included on the SDN List, as well as other individuals or entities explicitly subject to U.S. sanctions.  For more information on using OFAC’s SDN List Search Tool and assessing OFAC Name Matches, please see OFAC FAQs 582, 246-253, 287, 369, 467, and 892

In addition, according to OFAC’s 50 Percent Rule entities are considered blocked if they are owned 50 percent or more, directly or indirectly, individually or in the aggregate, by one or more blocked persons. 

OFAC would encourage any persons operating in certain non-regime held areas of northeast and northwest Syria pursuant to Syria GL 22 to use all information at their disposal when assessing their risk for sanctions exposure.  Supplementing internal due diligence information with an array of open-source material can be an effective compliance practice to aid in identifying risky counterparties involved in any in-country activity.  For more information on OFAC due diligence expectations and compliance programs, please see FAQs 25, 27-31 and A Framework for OFAC Compliance Commitments.
 

Released on 05/12/2022

Syria Sanctions

1044. Can financial institutions process transactions related to activities authorized by Syria General License (GL) 22?

Yes.  Transactions that are ordinarily incident and necessary to give effect to the activities authorized in Syria GL 22 are authorized.  Additionally, Syria GL 22 authorizes U.S. financial institutions to process transfers of funds related to authorized transactions and activities.  Such financial institutions may reasonably rely upon the information available to them in the ordinary course of business with regard to compliance with Syria GL 22, provided that the financial institution does not know or have reason to know that the funds transfer is not in compliance with the provisions of the GL.

In addition, foreign financial institutions do not risk exposure to U.S. secondary sanctions pursuant to the Caesar Syria Civilian Protection Act of 2019 for engaging in or facilitating transactions and activities that are otherwise authorized or exempt for U.S. persons under the Syrian Sanctions Regulations.  Please see FAQ 884for additional information.
 

Released on 05/12/2022

Syria Sanctions

1043. What activities are authorized pursuant to Syria General License (GL) 22?

Syria GL 22 authorizes certain activities in non-regime held areas of northeast and northwest Syria in the following economic sectors:  agriculture; information and telecommunications; power grid infrastructure; construction; finance; clean energy; transportation and warehousing; water and waste management; health services; education; manufacturing; and trade.  This includes activities in the areas of northeast and northwest Syria identified in the Annex in Syria GL 22, in support of transactions and activities that fall within the categories listed above, including:

  • the provision of agricultural-related services (such as the production of agricultural inputs, agricultural processing facilities, and the distribution of equipment and spare parts for machinery used in crop and livestock production); 
  • the provision of information and telecommunications-related services (such as reestablishment of telecommunications infrastructure, the promotion of internet connectivity for the Syrian people, and support for media and journalists);
  • the provision of power grid infrastructure and clean energy-related services (such as rehabilitation of distribution grids and lines, transformers or substations; and maintenance of power stations); 
  • activities to support construction-related services (such as repairs to residential buildings; rehabilitation of health facilities, schools, bakeries, irrigation pumps, and canals; and supplying associated spare parts, training, and support for maintenance of equipment);
  • the provision of financial-related services in support of the sectors outlined in Syria GL 22 (such as the provision of grants and loans, and entry into contracts to support private capital investments and trade);
  • the provision of transportation and warehousing-related services (such as rehabilitation of roads, bridges, waterways, and pipelines; and supplying associated technologies for alternative energy for transportation);
  • the provision of water and waste management-related services (such as rehabilitation of solid waste and medical disposal sites; and treatment of sewage and irrigation systems); 
  • the provision of healthcare and health-related services (such as the distribution of medical equipment, supplies, and pharmaceuticals; and technical training for and supervision of healthcare workers); 
  • the provision of educational-related services (such as the rehabilitation of schools; the provision of training and equipment support to local educators; training and equipment support to local officials on the operations and management of critical infrastructure; the provision of vocational and business management training; and the preservation and protection of cultural heritage sites); and
  • activities to support trade, including manufacturing of civilian-use goods directly benefiting the people in non-regime held areas of northeast and northwest Syria.

Additionally, Syria GL 22 authorizes U.S. financial institutions to process transfers of funds in support of the authorized transactions and activities outlined above.  

Separately, non-U.S. persons, including foreign financial institutions, do not risk exposure to U.S. secondary sanctions pursuant to the Caesar Syria Civilian Protection Act of 2019 for engaging in or facilitating transactions and activities that are otherwise authorized or exempt for U.S. persons under the SySR.  Please see FAQ 884for additional information. 

Please note that this guidance does not apply to transactions and activities that may be subject to prohibitions under other sanctions programs administered by OFAC (e.g., transactions with persons blocked under OFAC’s counterterrorism authority (E.O. 13224, as amended) or OFAC’s Syria-related authority (E.O. 13894)), unless exempt or otherwise authorized by OFAC.  Any persons seeking to operate in non-regime held areas of northeast and northwest Syria must ensure their in-country activities do not involve prohibited transactions and activities or blocked persons, such as the Government of Syria or designated terrorist organizations.

For transactions and activities not otherwise authorized or exempt from sanctions, OFAC will consider license requests on a case-by-case basis.  Individuals, companies, or financial institutions with questions about engaging in or processing transactions related to this authorization can contact OFAC’s Sanctions Compliance and Evaluation Division most efficiently via email at OFAC_Feedback@treasury.gov.  Sanctions Compliance and Evaluation may also be reached via phone at (800) 540-6322 or (202) 622-2490.

Additionally, U.S. and non-U.S. persons may need to obtain a license from the Department of Commerce’s Bureau of Industry and Security (BIS) for the export or reexport or certain items subject to Export Administration Regulations (EAR).  For further guidance regarding the exportation or reexportation of items to Syria, please contact BIS at (202) 482-4252.

Released on 05/12/2022

Syria Sanctions

1042. Does Syria General License (GL) 22 effectively remove certain sanctions on the Assad regime?

No.  Syria GL 22 does not remove any sanctions on the Assad regime and excludes transactions involving any person, including the Government of Syria, whose property or interests in property are blocked pursuant to the Syrian Sanctions Regulations or the Caesar Syria Civilian Protection Act of 2019 from the scope of the authorization.  Additional information on activities authorized pursuant to Syria GL 22 can be found in FAQ 1043.

Released on 05/12/2022

Syria Sanctions

1041. What is the purpose of Syria General License (GL) 22?

Syria GL 22 is intended to improve the economic conditions in non-regime held areas of northeast and northwest Syria and support ongoing stabilization efforts in the region.  This new authorization also builds upon the Administration’s strategy to defeat ISIS in the region. 

Released on 05/12/2022

They have also amended one existing FAQ (#884):

884. Do non-U.S. persons, including nongovernmental organizations (NGOs) and foreign financial institutions, risk exposure to U.S. secondary sanctions pursuant to the Caesar Syria Civilian Protection Act of 2019 (Caesar Act) for activities that would be authorized under the Syrian Sanctions Regulations (SySR)?

Answer

With respect to non-U.S. persons, OFAC will not consider transactions to be “significant” for the purpose of a sanctions determination under the Caesar Act if U.S. persons would not require a specific license from OFAC to participate in such a transaction.  Accordingly, non-U.S. persons, including NGOs and foreign financial institutions, would not risk exposure to sanctions under the Caesar Act for engaging in activity, or facilitating transactions and payments for such activity, that is authorized for U.S. persons under a general license (GL) issued pursuant to the SySR.

For a list of GLs within the SySR related to humanitarian assistance and trade with Syria, please see OFAC’s April 16, 2020 Fact Sheet: Provision of Humanitarian Assistance and Trade to Combat COVID-19.  Further, Section 7425 of the Caesar Act codifies, with some exceptions, the general license in § 542.516 of the SySR that authorizes certain services in support of NGOs.  Additionally, Section 7432 of the Caesar Act includes a humanitarian waiver for activities not otherwise covered by GL § 542.516 of the SySR.

Furthermore, non-U.S. persons do not risk exposure to sanctions pursuant to the Caesar Act for engaging in or facilitating transactions and activities authorized pursuant to Syria GL 22, or transactions that are ordinarily incident and necessary to give effect to the activities authorized in Syria GL 22, or any other general license issued pursuant to the SySR.

Please note that this guidance with respect to non-U.S. persons does not apply to transactions and activities that may be subject to sanctions under other sanctions programs administered by OFAC (e.g., transactions with blocked persons designated under Executive Order (E.O.) 13224, as amended (OFAC’s counterterrorism authority) or E.O. 13894 (OFAC’s Syria-related authority)), unless exempt or otherwise permitted by OFAC.

Updated: May 12, 2022

Links:

OFAC Notice

General License 22

New FAQs

FAQ 884

Categories: Frequently Asked Questions (FAQ) Guidance Humanitarian Aid Licenses OFAC Updates Syrian Sanctions

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