Monthly Archives: May 2015

May 22, 2015

Ukraine-Related General License No. 9

by Jeremy P. Paner

Today, OFAC issued Ukraine-related General License No. 9 (Exportation of Certain Services and Software Incident to Internet-Based Communication Authorized) and accompanying FAQ 454.

This General License follows similar communications licenses previously issued under the Sudan and Iran sanctions programs. The new FAQ reflects the considerable confusion that still surrounds the Ukraine-related sanctions program’s Sector Sanctions Identification (SSI) List prohibitions. Unlike designees placed on the Specially Designated Nationals (SDN) List, not all dealings by U.S. persons with SSI List persons are prohibited. U.S. persons are generally prohibited from extending new credit or debt to SSI listed individuals and entities. Therefore, this new General License authorizes exportation of certain services and software to the Crimea-region of the Ukraine, even if the end user is listed on the SSI List.

Commerce’s Bureau of Industry and Security (BIS) also published a final rule making additional changes to the Export Administration Regulations (EAR) for the Crimea region of Ukraine. Specifically, in §746.6, this final rule revises paragraph (a) (license requirements) to add an additional sentence that allows exports or reexports without a license to the Crimea region of Ukraine and transfers (in-country) within the Crimean region of Ukraine of certain software  that is necessary to enable the exchange of personal communications over the Internet.

May 22, 2015

OFAC Targets Mexican and Colombian Cocaine Trafficking Networks

by Jeremy Paner

Over the past two days, OFAC has designated major Mexican and Colombian cocaine trafficking networks as Specially Designated Narcotics Traffickers (SDNT) pursuant to the Foreign Narcotics Kingpin Designation Act (“Kingpin Act”). In addition to designations of individuals, OFAC also designated businesses in Colombia, Panama and Mexico, including a gas station, maritime company, auto shop, and “freezer air contractor.”

All property and interests in property held by these designees that is in the United States, or comes into the jurisdiction of the United States at a later date must be blocked. Failure to comply with these prohibitions will lead to civil and in the case of willful violations, criminal penalties.

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May 21, 2015

Treasury Targets Iran’s Support for Terrorism Through its Islamic Revolutionary Guard Corps-Qods Force

by Jeremy Paner

Today, OFAC designated the Iraq-based Al-Naser Airlines, Syrian Issam Shammout, and his Emirates-based Sky Blue Bird Aviation pursuant to its counterterrorism authority (Executive Order 13224) for providing support to Mahan Air, an entity previously designated for providing support to the terrorist group, the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF). In its designations of this IRGC-QF terrorist support network, OFAC signaled that it will continue to expose Iran’s support for terrorism.

U.S. individuals and entities are generally prohibited from dealing with these designees, which now appear on OFAC’s Specially Designated Nationals (SDN) List. All property and interests in property held by these designees that is in the United States, or comes into the jurisdiction of the United States at a later date must be blocked. Failure to comply with these prohibitions will lead to civil and in the case of willful violations, criminal penalties.

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May 7, 2015

Clarification and Addition to Ukraine-Related Frequently Asked Questions

by Jeremy Paner

Following months of calls to the OFAC hotline and Compliance Division from frustrated financial institutions, OFAC provided revisions to FAQs 395 and 419 and issued a new FAQ regarding General License 6 under the Ukraine-related program. Although this guidance will undoubtedly be welcomed by banks around the world, I suspect OFAC will continue to issue further clarification on the debt and credit prohibitions accompanying Sector Sanctions Identification (SSI) listings.

Prohibitions on letters of credit

The revised FAQs reiterate the Directives 1, 2, and 3 prohibitions on the extension of credit to SSI List entities. U.S. entities can act as the advising or confirming bank, as the applicant, or even process transactions under a letter of credit in which an SSI entity is the beneficiary. None of these letter of credit services are a prohibited extension of credit to an SSI entity.

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May 5, 2015

OFAC Provides Cuba Travel Guidance, Leaves Ultimate Effect of Authorization Certification Unresolved

by Jeremy P. Paner

Today, OFAC provided guidance to aircraft and passenger vessel carriers for two issues involving travel to and from Cuba following the January 2015 regulatory amendments to the Cuba sanctions program.

Who may be authorized to travel?

First, OFAC clarified that the following individuals may be transported between the United States and Cuba pursuant to the general license for air travel or specific license for commercial passenger vessels:

  1. Persons subject to the jurisdiction of the United States traveling to or from Cuba (to include unblocked Cuban nationals residing in the United States);
  2. Any individual traveling between the United States and Cuba on official business of the U.S. government, a foreign government, or an intergovernmental organization of which the United States is a member or in which the United States holds observer status;
  3. Cuban nationals applying for admission to the United States with a valid visa or other travel authorization;
  4. Third-country nationals traveling from Cuba to the United States with a valid visa or other travel authorization; and
  5. Cuban nationals present in the United States traveling to Cuba.

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