OFAC Finalizes Rule on Ag/Medical Exports to Iran & Sudan, Issues Food General Licenses

Makes Technical Clarifications of 1-Year License Policy for Ag/Medical Exports

The final rule adopts with changes the technical clarifications¹ made by the interim final rule on OFAC’s policy for issuing one-year licenses to export agricultural commodities, medicine, and medical devices to Sudan and Iran and the considerations relevant to such licensing decisions.

New General Licenses Authorize Food Exports to Iran & Sudan If Conditions Met

Since the 2009 interim final rule, OFAC states that it has continued to review its licensing procedures, particularly the procedures for licensing exports of agricultural commodities to Sudan and Iran.

As a result, OFAC has determined to authorize, by general license, the exportation or reexportation of those agricultural commodities that constitute food (including certain bulk agricultural commodities) to: (1) the Government of Iran, to any individual or entity in Iran, or to persons in third countries purchasing specifically for resale to any of the foregoing; and (2) the Government of Sudan, to any individual or entity in an area of Sudan other than the Specified Areas of Sudan², or to persons in third countries purchasing specifically for resale to any of the foregoing, subject to certain conditions and exclusions.

It is also authorizing the conduct of related transactions, including, but not limited to, the making of shipping and cargo inspection arrangements, the obtaining of insurance, the arrangement of financing and payment, shipping of the goods, receipt of payment, and the entry into contracts (including executory contracts).

Conditions and exclusions. The general licenses are subject to the following conditions and exclusions:

• Shipped within 12 months - the food exports and reexports must be shipped within the 12-month period beginning on the date of the signing of the contract for export or reexport.
• Have to meet definition of food -- the export or reexport must meet the definition of food which includes items intended to be consumed by and provide nutrition to humans or animals in Sudan or Iran - including vitamins and minerals, food additives and supplements, bottled drinking water, and seeds that germinate into items that are intended to be consumed by and provide nutrition to humans or animals in Sudan or Iran. The term food does not include alcoholic beverages, cigarettes, gum, or fertilizer.
• Cannot be an excluded food item. The general licenses do not authorize the exportation or reexportation of the following excluded food items: castor beans, castor bean seeds, raw eggs, fertilized eggs (other than fish and shrimp roe), dried egg albumin, live animals, Rosary/Jequirity peas, non food-grade gelatin powder, and peptones and their derivatives.
• Cannot be exported to excluded persons. The general licenses do not authorize the exportation or reexportation of food to military or law enforcement purchasers or importers. (In addition, OFAC may exclude any person, property, or transaction from the operation of these general licenses or restrict the applicability of these general licenses with respect to particular persons, property, transactions, or classes thereof.)

Will remain in effect unless revoked. Each year, by October 12, OFAC will determine whether to revoke these general licenses. Unless revoked, these general licenses will remain in effect.

1-Year Specific Licenses Still Needed for Non-Food Commodities, Medicine, Etc.

One-year specific licenses will still be required for agricultural commodities that do not fall within the definition of food or are otherwise excluded from the general licenses; food intended for military or law enforcement purchasers or importers; and medicine or medical devices to the Governments of Iran or of Sudan or to any individual or entity in Iran or in an area of Sudan other than the Specified Areas of Sudan, or to persons in third countries purchasing specifically for resale to any of the foregoing.

¹For example, the interim final rule added more specificity to the license restriction language, stating that no agricultural commodity, medicine or medical device can be 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, etc. (See ITT’s Online Archives 09112420 for summary of the interim final rule.)

²The term Specified Areas of Sudan means Southern Sudan, Southern Kordofan/Nuba Mountains State, Blue Nile State, Abyei, Darfur, and marginalized areas in and around Khartoum.

(FR Pub 10/12/11)