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OFAC amends multiple regulations to support humanitarian aid deliveries

Publication of Humanitarian-related Regulatory Amendments and Associated Frequently Asked Questions

Release date

12/20/2022

Body

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amending multiple regulations to add or revise certain general licenses (GLs) across a number of OFAC sanctions programs to ease the delivery of humanitarian aid.  Specifically, OFAC issued or amended four GLs across a number of OFAC sanctions programs authorizing the following four categories of activities:  the official business of the U.S. governmentthe official business of certain international organizations and entitiestransactions in support of certain nongovernmental organizations’ activities; and the provision of agricultural commodities, medicine, medical devices, replacement parts and components, or software updates for medical devices for personal, non-commercial use.  

OFAC is separately updating a regulatory interpretation in several sanctions programs’ regulations to explain that the property and interests of property of an entity are blocked if one or more blocked persons own, whether individually or in the aggregate, directly or indirectly, a 50 percent or greater interest in the entity.  These changes will be effective upon publication in the Federal Register on Wednesday, December 21, 2022.  

OFAC is also publishing four new Frequently Asked Questions (FAQs 1105, 1106, 1107 and 1108) to accompany this action.

OFAC Notice

Here are the 4 new Frequently Asked Questions (FAQs):

Cross-Programmatic Compliance Services Guidance

1108. Does OFAC’s issuance of general licenses (GLs) as outlined in FAQ 1105 restrict the scope of any existing exemptions or OFAC authorizations for humanitarian activities? 

No.  OFAC’s action of December 20, 2022 does not restrict the scope of any existing exemptions or OFAC authorizations for humanitarian activities, including existing general licenses authorizing certain NGO activities in sanctioned jurisdictions such as the Crimea Region of Ukraine, Iran, and Syria, which have not been amended by this action, and pre-existing web general licenses that have been incorporated into the relevant program regulations, such as Venezuela GL 20B.  Persons conducting humanitarian activities pursuant to these programs may continue to rely on existing exemptions and OFAC authorizations, subject to the applicable conditions and limitations, which may differ by sanctions program.

For information on specific exemptions or authorizations under a particular OFAC sanctions program, please see the relevant OFAC implementing regulations and OFAC’s Sanctions Programs and Country Information page.  
 

Released on 12/20/2022

Cross-Programmatic Compliance Services Guidance

1107. For purposes of the OFAC general licenses related to the official business of certain international organizations and entities (IO GLs), what organizations are included within the United Nations’ “Programmes, Funds, and Other Entities and Bodies, as well as its Specialized Agencies and Related Organizations”? 

For an organizational chart of the United Nations (UN), which lists the UN Programmes, Funds, and Other Entities and Bodies, as well as its Specialized Agencies and Related Organizations, including the World Bank, please see this page on the UN website.  The IO GLs also authorize the activities of the fund entities administered or established by the foregoing UN organizations, as well as the activities of the international organizations and entities themselves, in addition to the activities of their employees, contractors, and grantees.

Released on 12/20/2022

Cross-Programmatic Compliance Services Guidance

1106. Are financial institutions permitted to provide banking services, including processing funds transfers, related to activities authorized under the four categories of the general licenses (GLs) outlined in FAQ 1105?  What are OFAC’s diligence expectations of financial institutions seeking to engage in such activities?

U.S. financial institutions may operate accounts, including processing funds transfers, for persons engaging in activities authorized by the GLs related to: (i) the official business of the U.S. government, (ii) official business of certain international organizations and entities, (iii) certain humanitarian and other specified activities by nongovernmental organizations (NGOs), and (iv) the provision of agricultural commodities, medicine, medical devices, replacement parts and components, or software updates for medical devices for personal, non-commercial use.  In assessing whether a particular transaction is in compliance with such GLs, financial institutions may reasonably rely upon the information available to them in the ordinary course of business, provided that the financial institution does not know or have reason to know that the transaction is outside the scope of the applicable GL. 

Separately, non-U.S. persons, including NGOs and other entities, as well as foreign financial institutions facilitating or assisting these activities, do not risk exposure to U.S. sanctions for engaging in or facilitating transactions that are otherwise exempt or authorized for U.S. persons pursuant to these GLs.

For general information on OFAC’s due diligence expectations and compliance programs, please see A Framework for OFAC Compliance Commitments and FAQ 819.

If financial institutions have questions about engaging in or processing transactions related to these authorizations, they may contact the OFAC Compliance Hotline by email at OFAC_Feedback@treasury.gov or by phone at (800) 540-6322 or (202) 622-2490.  OFAC prioritizes responding to questions related to humanitarian activity.
 

Released on 12/20/2022

Cross-Programmatic Compliance Services Guidance

1105. What actions did OFAC take to implement the United Nations Security Council Resolution (UNSCR) 2664 of December 9, 2022 relating to a new UN sanctions exception for humanitarian assistance?   

On December 9, 2022, the United Nations (UN) Security Council adopted UNSCR 2664, which establishes a humanitarian carveout to the asset freeze measure across United Nations sanctions regimes.  The carveout enables the flow of legitimate humanitarian assistance and activities supporting the basic human needs of vulnerable populations while continuing to deny resources to malicious actors.  On December 20, 2022, OFAC announced the issuance or amendment of four categories of general licenses (GLs) that support the conduct of U.S. government and humanitarian-related activities across a number of sanctions programs, including in OFAC sanctions programs that implement UN sanctions regimes.   

Specifically, across a number of sanctions programs, OFAC issued or amended four categories of GLs authorizing the following activities:

  • the official business of the U.S. government; 
  • the official business of certain international organizations and entities; 
  • transactions incident to certain humanitarian and other activities by nongovernmental organizations; and
  • the provision of food and other agricultural commodities, medicine, medical devices, replacement parts and components, or software updates for medical devices for personal, non-commercial use.  

For more information on the sanctions programs covered by these new or amended GLs, please see the Federal Register here and here.  For information on specific exemptions or authorizations under a particular OFAC sanctions program, please see the relevant OFAC implementing regulations and OFAC’s Sanctions Programs and Country Information page.  

For humanitarian-related activity that may fall outside the scope of these authorizations, OFAC considers specific license requests on a case-by-case basis and prioritizes license applications and other requests for guidance that are related to humanitarian activity.  Please see OFAC’s License Application Page for additional details regarding the specific licensing process. 

If individuals, nongovernmental organizations, international organizations, or other entities, including financial institutions, have questions about engaging in or processing transactions related to these authorizations, they may contact the OFAC Compliance Hotline by email OFAC_Feedback@treasury.gov or by phone at (800) 540-6322 or (202) 622-2490.  As with specific license requests, OFAC prioritizes responding to questions related to humanitarian activity.
 

Released on 12/20/2022

Frequently Asked Questions 1105-1108

And the Treasury:

PRESS RELEASES

Treasury Implements Historic Humanitarian Sanctions Exceptions

December 20, 2022

United States Becomes First Country to Implement New Humanitarian Resolution

WASHINGTON –Today, following this month’s adoption of United Nations Security Council Resolution (UNSCR) 2664, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took historic steps to further enable the flow of legitimate humanitarian assistance supporting the basic human needs of vulnerable populations while continuing to deny resources to malicious actors.

The United States and Ireland co-led the development of UNSCR 2664, which implemented a carveout from the asset freeze provisions of UN sanctions programs. To implement this new policy across U.S. sanctions programs and as the first country in the world to implement the new UNSCR, today OFAC issued or amended general licenses (GLs) to ease the delivery of humanitarian aid and ensure a baseline of authorizations for the provision of humanitarian support across many sanctions programs.

“The United States co-led the development of the humanitarian carveout Resolution at the United Nations, and we’re proud to be the first country to issue authorizations and guidance to implement it across our sanctions programs,” said Deputy Secretary of the Treasury Wally Adeyemo. “The general licenses released today 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, which remain an essential foreign policy tool. The provision of humanitarian support to alleviate the suffering of vulnerable populations is central to our American values.”

The GLs being issued or amended today provide authorizations in the following four categories:

  • the official business of the U.S. government;
  • the official business of certain international organizations and entities, such as the United Nations or the International Red Cross;
  • certain humanitarian transactions in support of nongovernmental organizations’ (NGOs’) activities, such as disaster relief, health services, and activities to support democracy, education, environmental protection, and peacebuilding; and
  • the provision of agricultural commodities, medicine, and medical devices, as well as replacement parts and components and software updates for medical devices, for personal, non-commercial use.

In October 2021, Treasury published a comprehensive review of its economic and financial sanctions programs which found, among other things, that while sanctions remain an essential and effective policy tool, they also must be carefully calibrated to help address their impact on the flow of legitimate humanitarian aid to those in need. It recommended implementing or streamlining, where possible and appropriate, humanitarian authorizations across sanctions programs, noting that the United States must lead global efforts to systematically address the challenges associated with conducting humanitarian activities. The GLs bolster Treasury’s ongoing work to address challenges faced by humanitarian actors operating in regions perceived as high risk for money laundering, terrorist financing, or subject to U.S. sanctions. To that end, today’s action also builds upon Treasury’s ongoing work to develop a strategy to mitigate financial sector de-risking of nonprofit organizations as directed by Congress under the Anti-Money Laundering Act of 2020.

Treasury is issuing these GLs across sanctions programs that did not previously have humanitarian exceptions, implementing a new standardized baseline set of authorizations across OFAC-administered programs.

Concurrently, OFAC issued 4 FAQs that provide further guidance on today’s action and the authorizations being issued or amended, including guidance for financial institutions facilitating activity for NGOs and OFAC’s due diligence expectations.  For more information, please see FAQs

For transactions not otherwise authorized or exempt from sanctions, OFAC considers license requests on a case-by-case basis and prioritizes applications, compliance questions, and other requests related to humanitarian assistance. Additional questions regarding the scope of any sanctions programs’ requirements, or the applicability or scope of any humanitarian-related authorizations, can be directed to OFAC’s Sanctions Compliance and Evaluation Division at (800) 540-6322 or (202) 622-2490, or by email at OFAC_Feedback@treasury.gov.

U.S. Treasury Department Press Release

and State Department:

Improving Humanitarian Aid Delivery by Expanding Authorizations Across U.S. Sanctions

PRESS STATEMENT

ANTONY J. BLINKEN, SECRETARY OF STATE

DECEMBER 20, 2022

The United States is committed to protecting humanitarian access and removing impediments – real and perceived – to the delivery of legitimate humanitarian aid around the world.  In September, I announced our intent to ensure that food, medicine, and humanitarian assistance are carved out across United Nations and U.S. sanctions programs. The first step in achieving that goal was the adoption of UN Security Council Resolution 2664, co-drafted with Ireland, on December 9.

Today, we are taking the next step with the U.S. Department of the Treasury’s release of a package of general licenses (GLs) that create a baseline for humanitarian authorizations across U.S. sanctions programs.  These GLs will establish consistent regulations, streamline compliance for humanitarian and commercial actors, and ultimately ensure sanctions do not unduly impact humanitarian conditions around the world.  The GLs help implement UN Security Council Resolution 2664 and build upon the many authorizations this Administration has already incorporated across several U.S. sanctions programs to facilitate the conduct of humanitarian activity.  This update will refine and strengthen our sanctions implementation by ensuring our measures impact the intended targets while enabling humanitarian organizations to help those in need.

These licenses, which include safeguards to prevent abuse or diversion, make our sanctions clearer, stronger, and more effective and streamlined.  We look forward to working with our allies and partners around the world, and with humanitarian actors and financial institutions, to ensure these licenses are understood and implemented so that food, medicine, and humanitarian aid reach those most in need.

At a time when over 100 million people are forcibly displaced worldwide, and a global food crisis has left over 205 million people acutely food insecure this could not be more urgent. The licenses announced today are a critical step to meeting humanitarian challenges of unprecedented magnitude while maintaining the integrity of sanctions as a tool to promote international peace, security, and stability.

U.S. State Department Press Release

issued press releases about this action.

Links:

OFAC Notice;

Final Rules – Official US Government Business; Official Business of International Organizations & Entities; NGO Activities Support; Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components, Software Updates for Medical Devices; 50 Percent Rule Regulatory Interpretation

New FAQs (1105-1108)

Press Releases – Treasury, State

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

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