OFAC Clarifies Policy for Issuing One-Year Licenses for Agricultural and Medical Exports to Sudan and Iran
The Office of Foreign Assets Control has issued an interim final rule, effective November 23, 2009, which amends certain sections of the Sudanese Sanctions Regulations (SSR) and the Iranian Transactions Regulations (ITR) to clarify its policy for issuing one-year licenses to export agricultural commodities, medicine, and medical devices to Sudan and Iran. C
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Comments on this interim final rule by January 22, 2010.
TSRA Restricts Agricultural and Medical Exports
The Trade Sanctions Reform and Export Enhancement Act of 2000, as amended (TSRA), requires that the export of agricultural commodities, medicine, and medical devices to the government of a country that has been determined to have repeatedly provided support for acts of international terrorism, or to any entity in such a country, shall only be made pursuant to one-year licenses issued by the U.S. government.
While the TSRA specifies that the requirements of the one-year licenses shall be no more restrictive than general licenses administered by the Treasury, it also requires that procedures be in place to deny licenses for exports of agricultural commodities, medicine, and medical devices to any entity within a country promoting international terrorism.
Patriot Act Expanded TSRA Agricultural and Medical Export Prohibitions
In October 2001, the President signed the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (Patriot Act). Section 221 of the Patriot Act amended TSRA by adding a section, which expanded the prohibition of exports of any agricultural commodity, medicine, or medical device to:
(1) any foreign organization, group, or person designated pursuant to Executive Order 12947, as amended (regarding terrorists who threaten to disrupt the Middle East peace process);
(2) any foreign terrorist organization pursuant to the Antiterrorism and Effective Death Penalty Act of 1996;
(3) any foreign organization, group, or person designated pursuant to Executive Order 13224 (regarding persons who commit, threaten to commit, or support terrorism);
(4) any narcotics trafficking entity designated pursuant to Executive Order 12978 or the Foreign Narcotics Kingpin Designation Act; or
(5) any foreign organization, group, or persons subject to any restriction for its involvement in weapons of mass destruction or missile proliferation.
(See ITT's Online Archives or 10/31/01 news, 01103125, for BP summary of the Patriot Act.)
Technical Changes to SSR and ITR Ensure Requirements of TSRA, Patriot Act
Pursuant to the TSRA and the amendments made by the Patriot Act, OFAC's interim final rule makes technical changes to certain sections of the SSR at 31 CFR Part 538, and the ITR at 31 CFR Part 560 to clarify that:
(i) no agricultural commodity, medicine or medical device is exported to any entity, organization or other person designated pursuant to any law or Executive order sanctioning terrorists, weapons of mass destruction or missile proliferators, or narcotics traffickers; and
(ii) licenses under section 906 of TSRA are not granted for the export of any agricultural commodity, medicine, or medical device that is controlled on the U.S. Munitions List or the Commerce Control List in the Export Administration Regulations, or that is used to facilitate the design, development or production of chemical or biological weapons, missiles, or weapons of mass destruction.
(Previously, the SSR and ITR were less specific about these license restrictions.)
License Process for One-Year Licenses May Take Significantly Longer
OFAC will continue to conduct a review of applications for one-year licenses, which may include a referral to other government agencies for guidance, and will respond to such applications upon completion of the review. The specific timing with respect to any application will continue to depend on factors such as the nature of the goods being exported, the complexity of the transactions, and the need for interagency review, and may take significantly longer than the time periods indicated at the inception of the TSRA program.
OFAC will continue to respond to such applications in as timely a manner as is possible under the circumstances of each individual license application.
(See ITT's Online Archives or 09/10/09 news, 09091025, for BP summary of an OFAC final rule issuing a general license for the export and reexport of agricultural commodities, medicine, and medical devices to certain specified areas of Sudan.
See ITT's Online Archives or 11/18/08 news, 08111840, for BP summary of OFAC's request for comments on the effectiveness of its licensing procedures for the exportation of agricultural commodities, medicine, and medical devices to Sudan, etc.)
OFAC contact - Compliance, Outreach & Implementation (202) 622-2490
OFAC interim final rule (FR Pub 11/23/09) available at http://edocket.access.gpo.gov/2009/pdf/E9-27979.pdf