International Law Advisory - OFAC Amends Terrorism-Related Sanctions Regulations to Permit Transactions with the Palestinian Authority

On Wednesday, October 31, 2007, the Department of the Treasury, Office of Foreign Assets Control (OFAC) amended the Global Terrorism Sanctions Regulations (31 C.F.R. Part 594), the Terrorism Sanctions Regulations (31 C.F.R. Part 595), and the Foreign Terrorist Organizations Sanctions Regulations (31 C.F.R. Part 597) to add a new general license authorizing all transactions with the Palestinian Authority. See 72 Fed. Reg. 210 at 61517-61518 (October 31, 2007).

As reported in our May 11, 2006 advisory, OFAC last year placed restrictions on dealings by US persons with the Palestinian Authority. These prohibitions were put into place following Hamas’s effective control of the Palestinian Authority after its electoral victory in the Palestinian legislative elections in January 2006. Hamas has been designated as a terrorist entity under all three of the above-referenced anti-terrorism regulations, resulting in the blocking of its property and interests in property that are in the United States or within the possession or control of a US person.

With the recent appointment of non Hamas-affiliated officials to senior levels of the Palestinian Authority, yesterday’s notice amends the Global Terrorism Sanctions Regulations (31 C.F.R. Part 594), the Terrorism Sanctions Regulations (31 C.F.R. Part 595), and the Foreign Terrorist Organizations Sanctions Regulations to add a new general license authorizing US persons to engage in all transactions with the Palestinian Authority. (Please note that, for these purposes, the Palestinian Authority is defined as the Palestinian Authority government of recently-appointed Prime Minister Salam Fayyad and President Mahmoud Abbas, including all branches, ministries, offices, and agencies thereof.)  These changes were effective as of June 20, 2007.

Please contact Ed Krauland at 202.429.8083 or ekrauland@steptoe.com in our Washington office if you have any questions regarding these changes to the OFAC sanctions regulations.