Overview
The joint US/NATO mission in Afghanistan announced on June 18, 2015 that the deadline for implementation of business license and visa requirements under the US-Afghan Bilateral Security Agreement (BSA) has been delayed until September 1, 2015. The BSA became effective on January 1, 2015, but its implementation was delayed by an Afghan Presidential decree. That extension ended June 1, 2015. However, with the start of Ramadan in Afghanistan and many US government contractors still awaiting their business licenses from the Afghan government, the Afghans delayed the expiration of the transition period for Department of Defense (DoD) contractors in Afghanistan to obtain business licenses and visas for their employees until September 1, 2015. The US/NATO announcement makes clear in bold letters that “there will be no more extensions or grace periods on enforcement.” Importantly, the announcement is couched in “for informational purposes only” terms and is published by the Resolute Support Legal Advisor (RS LEGAD) and US Forces-Afghanistan Staff Judge Advocate (USFOR-A SJA). Thus, DoD contractors should still seek guidance from their own legal advisors in the US and Afghanistan.
In addition to extending the deadline for compliance with the BSA’s business license and visa requirements, which is welcome news to many DoD contractors and subcontractors still awaiting their license certificates from the Afghanistan Investment Support Agency (AISA), the
RS LEGAD/USFOR-A SJA information memo contains some potential new wrinkles in AISA’s process for issuing business licenses. First, the information memo appears to suggest that if the officers or equity partners of a company were officers or equity partners of a previously registered company, which could cause some confusion, current AISA guidance for US/NATO contractors requires them to obtain a tax clearance letter for their previous company before obtaining an AISA license. This appears to be an additional step to obtain an AISA license beyond those required for companies not so situated. Additionally, the new RS LEGAD/USFOR-A SJA information memo suggests that the visa process for DoD contractor employees is changing and that the Afghan consulate in Washington, DC may no longer be the best option for DoD contractors to obtain visas for their employees in some circumstances.
Of course, above and beyond baseline registration, Afghanistan remains a highly challenging environment from a regulatory compliance perspective. Contractors, therefore, need to be mindful of the wide range of potential regulatory compliance considerations applicable to working in Afghanistan, including export control, economic sanctions, and anti-corruption laws. The recent RS LEGAD/USFOR-A SJA guidance speaks to certain export/import issues in Afghanistan, but focuses on Afghanistan’s rules, rather than US laws such as the International Traffic in Arms Regulations (ITAR), which are also applicable to a significant portion of work in Afghanistan. Moreover, any interaction with Afghan (or other) government officials, whether directly or through Afghan or third country parties has the potential to implicate anti-corruption laws. Accordingly, US contractors should continue to carefully monitor their work in Afghanistan from many perspectives.
Steptoe’s attorneys have significant experience dealing with the US-Afghan BSA, its requirements for business licensing, and working with in-country providers to obtain AISA business licenses for Steptoe’s clients.
