General Note on OFAC’s Assertion of Worldwide Jurisdiction over non-U.S. Origin Vessels and Aircraft with Certain Relationships to the United States (System Ed. Note)

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TURBOFAC Commentary (2225 words)

General Note on OFAC’s Assertion of Worldwide Jurisdiction over non-U.S. Origin Vessels and Aircraft with Certain Relationships to the United States (System Ed. Note)

The legal basis for OFAC's assertion of jurisdiction over offshore activities on the basis of the U.S.-related status of a particular aircraft and/or vessel is not evident from the text of the regulations itself, but OFAC's bottom-line positions on the matter are relatively clear.

A corporate entity that owns a vessel—and many vessels are owned by corporate entities for which the only asset is a single vessel—can be a U.S. person. For example, if the entity is incorporated in the U.S. that entity’s activities would be subject to OFAC regulations applicable to U.S. persons, on a worldwide basis, independent of the activities of the physical vessel.

However, OFAC appears to not consider vessels and aircraft themselves to be within the...