Notes Common to the 400-Level Interpretive Provisions Authorizing Transactions "Ordinarily Incident" to a Licensed Transaction; Transactions Incident to Others in General (System Ed. Note)

Last substantive commentary amendment:
Sep. 03 2023

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TURBOFAC Commentary (4881 words)

Notes Common to the 400-Level Interpretive Provisions Authorizing Transactions "Ordinarily Incident" to a Licensed Transaction; Transactions Incident to Others in General (System Ed. Note)

1) INTRODUCTION

The question of whether a person subject to sanctions prohibitions may engage in a given transaction ancillary to some other, underlying transaction is of paramount importance in sanctions law generally. This is, in part, because such a large proportion of OFAC’s enforcement actions arise out of such transactions, in particular with respect to payment processing, but also insurance and shipping. The relative importance of the issue is coupled with a substantial lack of clarity provided by the face of the applicable regulations as to when transactions ancillary to others are permissible.

We refer this generally to the "ordinarily incident question," though the precise language used to describe transactions ancillary to certain other, underlying transactions can vary...