International Law Advisory - OFAC Amends Iranian Transactions Regulations For US Person Employees/Contractors of International Organizations

The United States Department of the Treasury, Office of Foreign Assets Control (“OFAC”) published in today’s Federal Register a final rule amending the Iranian Transactions Regulations. See 71 Fed. Reg. 162 at 48795. The Iranian Transactions Regulations implement a series of Executive Orders aimed at addressing the threat posed to the United States by Iran.

The current amendment adds a new general license authorizing US persons who are employees or contractors of six international organizations to perform transactions for the conduct of the official business of those organizations in or involving Iran. Those organizations are: the United Nations; the World Bank; the International Monetary Fund; the International Atomic Energy Agency; the International Labor Organization; and the World Health Organization. The rule takes immediate effect.  OFAC explained that the rule was promulgated in light of the US interest in promoting the hiring and retention of Americans by international organizations.

The rule provides examples of authorized transactions.  These include:  the provision of services involving Iran necessary for the carrying out of official business; purchasing Iranian goods and services for use in carrying out official business; leasing office space and securing related goods and services; funds transfers to or from accounts of the international organizations specified in the license, provided that funds transfers to or from Iran are not routed through an account of Iranian bank on the books of a US financial institution; and operation of accounts for the employees and contractors in Iran, provided that transactions conducted through the accounts are solely for the employee’s or contractor’s personal use and not for any commercial purposes in or involving Iran, and any funds transfers to or from an Iranian bank are routed through a third-country bank that is not a US person.

The rule provides that the general license does not authorize:   (1) the exportation from the United States to Iran or any goods or technology listed on the Commerce Control List (CCL) in the Export Administration Regulations (EAR); (2) the reexportation to Iran of any US-origin goods or technology listed on the CCL; or (3) the exportation or reexportation to Iran of any services not necessary and ordinarily incident to the international organization’s official business in Iran.  Such transactions require separate authorizations from OFAC.  The rule also contains a note to the “not authorized” list, explaining that items such as laptop computers, PDAs, and other wireless handheld devices cannot be exported to Iran, even on a temporary basis, unless specifically authorized by license in a manner consistent with the Iran-Iraq Nonproliferation Act of 1992 and other relevant law.

If you have any questions regarding this rule or the Iranian Transactions Regulations please contact Ed Krauland at 202.429.8083 or Andy Irwin 202.429.8177.