832. What are significant goods or services used in connection with a sector of the Iranian economy specified in Executive Order (E.O.) 13902?
Persons who have knowingly engaged in a significant transaction for the sale, supply, or transfer to or from Iran of significant goods or services used in connection with the construction, mining, manufacturing, textiles, and financial sectors of the Iranian economy as described in FAQ 831 risk exposure to blocking sanctions pursuant to E.O. 13902. Further, foreign financial institutions that have knowingly conducted or facilitated any significant financial transaction for the sale, supply, or transfer to or from Iran of significant goods or services used in connection with those sectors of the Iranian economy risk exposure to U.S. correspondent account or payable-through account sanctions.
OFAC expects to promulgate regulations defining goods and services used in connection with the construction, mining, manufacturing, textiles, and financial sectors of the Iranian economy consistent with the following (See FAQ 833 for an interpretation of the term “significant.”):
Goods or services used in connection with the construction sector of the Iranian economy:
The term goods used in connection with the construction sector of the Iranian economy means equipment or materials that enable the services described below or the activities described in FAQ 831 with respect to the construction sector of the Iranian economy, including: building supplies, concrete, scaffolding, lifts, hoists, cranes, conveyors, and mechanized equipment for material handling. Goods that ensure the protection of life and prevention of injuries to persons operating in the construction sector of the Iranian economy are excluded from this definition, including personal protective equipment, safety devices, and alarm systems.
The term services used in connection with the construction sector of the Iranian economy include: blasting, demolition, dredging, electrical work, excavating, masonry, plumbing, rigging, welding, for-sale building, design-build consultations, and construction management. Services that ensure the protection of life and prevention of injuries to persons operating in the construction sector of the Iranian economy are excluded from this definition, including cleaning, safety inspections, and services necessary for use of protective goods described above.
Goods or services used in connection with the mining sector of the Iranian economy:
The term goods used in connection with the mining sector of the Iranian economy means equipment or materials that enable the services described below or the activities described in FAQ 831 with respect to the mining sector of the Iranian economy, including: boring equipment, conveyor belts, directional digging technology, haul trucks, hydraulic excavators, explosives, and power shovels. Goods that ensure the protection of life and prevention of injuries to persons operating in mines in Iran are excluded from this definition, including personal protective equipment, safety devices, ventilation systems, and alarm systems.
The term services used in connection with the mining sector of the Iranian economy includes: auguring, boring, backfilling, combusting, crushing, exploration, grinding, grading, irrigating, impounding, magnetic separation, mineral processing, geophysical surveying, mapping services, operating mines or quarries, site preparation, and related construction activities. Services that ensure the protection of life and prevention of injuries to persons operating in the mining sector of the Iranian economy are excluded from this definition, including rescue and accident response services, cleaning, safety inspections, and services necessary for use of protective goods described above.
Goods or services used in connection with the manufacturing sector of the Iranian economy:
The term goods used in connection with the manufacturing sector of the Iranian economy means equipment or materials, including raw materials, tooling machinery, and components of finished products, that enable the services described below. Goods that ensure the protection of life and prevention of injuries to persons operating in the manufacturing sector of the Iranian economy are excluded from this definition, including personal protective equipment, safety devices, and alarm systems.
The term services used in connection with the manufacturing sector of the Iranian economy includes: new installment, additions, alteration, maintenance, and repair of manufacturing equipment; procurement or supply of raw materials for the manufacturing sector of the Iranian economy; and distribution services to persons operating in the manufacturing sector of the Iranian economy. Services that ensure the protection of life and prevention of injuries to persons operating in the manufacturing sector of the Iranian economy are excluded from this definition, including cleaning services, safety inspections, and services necessary for use of protective goods described above.
Goods or services used in connection with the textiles sector of the Iranian economy:
The term goods used in connection with the textiles sector of the Iranian economy means equipment, machines, materials, and items used in the textiles sector of the Iranian economy or that enable the services described below or the activities described in FAQ 831 with respect to the textiles sector of the Iranian economy, including: looms, industrial sewing machines, industrial washers and dryers, and industrial embroidery machinery. Goods that ensure the protection of life and prevention of injuries to persons operating in the textiles sector of the Iranian economy are excluded from this definition, including personal protective equipment, safety devices, and alarm systems.
The term services used in connection with the textiles sector of the Iranian economy includes: procurement or supply of raw materials for textiles production, and design of textiles products. Services that ensure the protection of life and prevention of injuries to persons operating in the textiles sector of the Iranian economy are excluded from this definition, including cleaning services, safety inspections, and services necessary for use of protective goods described above.
Goods or services used in connection with the financial sector of the Iranian economy:
On or after November 22, 2020, persons who have knowingly engaged in a significant transaction for the sale, supply, or transfer to or from Iran of significant goods or services used in connection with the financial sector of the Iranian economy risk exposure to blocking or other sanctions under E.O. 13902, unless the transaction is for a permitted transaction, such as humanitarian trade or a transaction or activity authorized for U.S. persons or otherwise described in FAQs 844, 847, 855, or 856.
The term goods or services used in connection with the financial sector of the Iranian economy includes new hardware or software, or upgrades to existing hardware or software, and related services, for use by Iranian financial institutions sanctioned pursuant to E.O. 13902 or the Iranian financial sector. It also includes financial services for transactions other than permitted transactions (e.g., humanitarian trade or transactions or activities authorized for U.S. persons or otherwise described in FAQs 844, 847, 855, or 856. The term does not include goods or services ordinarily incident and necessary to:
The wind down of accounts, transactions, operations, contracts, or other agreements involving the Iranian financial sector or an Iranian financial institution sanctioned pursuant to E.O. 13902 that were in effect prior to October 8, 2020.
The maintenance of accounts, transactions, operations, contracts, and other agreements involving the Iranian financial sector or an Iranian financial institution sanctioned pursuant to E.O. 13902 that were in effect prior to October 8, 2020 and: (i) are used in connection with permitted transactions, such as humanitarian trade or transactions or activities authorized for U.S. persons or otherwise described in FAQs 844, 847, 855, or 856 or (ii) are otherwise necessary for the continued processing of such permitted transactions.
The Department of the Treasury continues to analyze goods and services used in connection with the financial sector of the Iranian economy and may issue additional guidance about the types of goods and services that are considered sanctionable for purposes of E.O. 13902. We urge caution in any dealings involving the Iranian financial sector or with an Iranian financial institution sanctioned pursuant to E.O. 13902.
Date Released
December 7, 2020
1) Read in conjunction with Executive Order 13902 - Executive Order on Imposing Sanctions with Respect to Additional Sectors of Iran, and comments thereto.
2) FAQ amended on 12-7-2020 to add the portion of the FAQ under the subheading "Goods or services used in connection with the financial sector of the Iranian economy."
See FAQ # 844, FAQ # 847, FAQ # 855, FAQ # 856. The financial sector guidance provided here adds to the scope of activities otherwise deemed non-sanctionable in the referenced FAQs. Most notably, OFAC considers the “maintenance of accounts,” which presumably includes correspondent accounts, to not be “significant” when those accounts “are used in connection with permitted transactions such as humanitarian trade or transactions or activities authorized for U.S. persons or otherwise described in FAQs 844, 847, 855, or 856 or [] are otherwise necessary for the continued processing of such permitted transactions.”
Note that while processing funds transfers in connection with underlying authorized or exempt transactions is not prohibited by the ITSR (see 560.516), the maintenance of correspondent accounts for financial institutions is not considered “ordinarily incident” to otherwise authorized funds transfers. In this respect, the FAQ articulates a range of conduct that is not sanctionable for non-U.S. persons not subject to the ITSR as a result of 560.215, but is, at the same time, not authorized for U.S. persons or persons subject to the ITSR as a result of 560.215.