Related Practices
International Law Advisory - Iraqi Sanctions
March 23, 2004This is to advise you of a recent update in the Iraqi Sanctions Regulations (ISR). On March 18, 2004, the Department of the Treasury, Office of Foreign Assets Control (OFAC) amended the ISR in two respects. First, it set forth a partial list of entities in Iraq that qualify as either (a) part of the “Government of Iraq” for purposes of the ISR, or (b) as state bodies, corporations, or agencies of the Government of Iraq for purposes of Executive Order 13315 of August 29, 2004. The amendment clarifies that properties of these entities that were blocked as of May 23, 2003 remain blocked and cannot be freely transferred without an OFAC license. However, new commercial transactions with those entities occurring after May 23, 2003 are largely authorized under previous general licenses issued by OFAC on May 23 and August 29, 2003.
Second, the amendment issued last week identifies a series of entities in Iraq that are listed as “specifically designated nationals” (SDN) under Appendix A, Chapter 5 of the OFAC regulations (Title 31 of the Code of Federal Regulations), but are currently operating under the authority of the Coalition Provisional Authority or the transitional Iraqi government. The amendment authorizes U.S. persons to engage in transactions with those entities, notwithstanding their SDN designation.
It is important to note that the major Iraqi banks are on this list, and therefore financial transactions with those banks are authorized. One possible legal question that could arise is whether these banks will remain authorized entities once the CPA transfers authority to the Iraqi interim government this summer. If you are dealing with these banks, you may wish to review this issue as changes in the CPA’s role occur.
The text of the amendments and the related entity lists are available for download on the OFAC website. If you have any questions regarding the ISR or these changes, please feel free to contact Ed Krauland at 202.429.8083 or David Lorello at 202.429.6757.
