International Law Advisory - Iran/Iraq - NGO Activity

Authorization of Certain Humanitarian Activities by Nongovernmental Organizations in Iran and Iraq

On March 12, 2003, the Office of Foreign Assets Control ("OFAC") added new provisions to the Iraqi Sanctions Regulations to allow registered nongovernmental organizations to undertake humanitarian missions and assessments in Iran and parts of Iraq.  The new rule, issued by OFAC under its authority to administer the Iraqi Sanctions Regulations, 31 C.F.R. part 575, and the Iranian Transactions Regulations, 31 C.F.R. part 560, has been issued in interim form "because of the importance of the issues addressed" in the regulations.  Interested persons may submit written comments to OFAC until May 12, 2003.

According to the new rule, found at 68 Fed. Reg. 11741 (March 12, 2003), OFAC’s intent is to "facilitate humanitarian activities with respect to Iraq."  OFAC will establish an application and case-by-case authorization process to allow nongovernmental organizations to conduct humanitarian activities and assessment missions in parts of Iraq not controlled by the Government of Iraq.  The rule also allows registered nongovernmental organization to undertake activities in Iran that are "directly incidental and essential to" humanitarian activities provided in Iraq.

Effective as of March 12, 2003, the following legal authorizations and restrictions apply to US nongovernmental organizations that wish to undertake humanitarian activities (defined as "humanitarian relief, educational, cultural, recreational, and human rights-related activities, and activities to ameliorate the effects of or to investigate war crimes") and assessment missions with respect to Iraq:

• All nongovernmental organizations wishing to participate in the humanitarian activities related to these regulations must first apply for and obtain a registration number from OFAC. Registration is approved on a case-by-case basis;
  
• Humanitarian activities and assessment missions undertaken by registered or licensed nongovernmental organizations is restricted to areas of Iraq not controlled by the Iraqi government.  These areas, currently defined as "areas north of the ‘Green Line" and under the control of the Kurdistan Democratic Party (KDP) or the Patriotic Union of Kurdistan (PUK)" in certain Iraqi provinces, is subject to redefinition by the US Department of State;
  
• Nongovernmental organizations may conduct certain "survey" or "assessment" missions in and around Iraq for the purpose of planning or preparing for the provision of humanitarian support, provided that these organizations have either (a) registered with OFAC, or (b) been issued a specific license for that purpose;
  
• Nongovernmental organizations may export certain goods or technology to Iraq in conjunction with the provision or planning of humanitarian services by obtaining a license through OFAC, provided that the goods or technology are not controlled for export by the Department of Commerce, the Department of State, or the United Nations;
  
• A registered or licensed nongovernmental organization may conduct activities in Iran that are essential to its authorized humanitarian mission in Iraq, subject to various conditions.  Exportation of food, clothing, and medicine to Iran intended to relieve human suffering in Iraq and not otherwise controlled for export is allowed, provided that the goods are either consumed in or removed from Iran prior to the end of each visit.  Except for food, clothing, or medicine intended to relieve human suffering, transshipments of goods from Iran to any other country, including Iraq, are not authorized without a license.  The regulations do not authorize actual provision of such humanitarian support in Iran;
  
• US financial institutions may transfer funds in connection with essential activities authorized and undertaken for humanitarian purposes by a registered or licensed nongovernmental organization, provided that the funds are not transferred from blocked accounts, and that no Iraqi or Iranian financial institution or government agency or instrumentality participates in the funds transfer.

Companies should update their OFAC compliance screening mechanisms to ensure that any existing business relationships or transactions, and any relationships or transactions in the future, are in compliance with the Iraqi Sanctions Regulations and the Iranian Transactions Regulations.  It is not clear when OFAC will issue final regulations; however, the interim provisions are currently effective and binding.

A copy of the Federal Register notice containing the interim provisions is attached.  If you have any questions, please feel free to contact Ed Krauland at 202.429.8083 or Meredith Rathbone at 202.429.6437.