General Note on Dealings in or With Non-Sanctioned Third-Country Consortia (System Ed. Note)

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TURBOFAC Commentary (1676 words)

General Note on Dealings in or With Non-Sanctioned Third-Country Consortia (System Ed. Note)

One recurring issue in enforcement actions and guidance documents is the treatment of dealings in or with consortia, which are particularly common in the natural resources sectors. Typically, a consortium of foreign companies will have a contract with a government for resource exploration rights.

OFAC's treatment of dealings with consortia depends heavily on the precise type of transaction at issue. In general, there are three categories of cases, each of which are treated differently.

In the first, a U.S. person is actually part of a consortium that may have dealings with a sanctioned country or person. See e.g. Case No. IA-7041. In such cases, the consortium may deal with the sanctioned person, but the U.S. person must be sure that it does not fund or facilitate the transactions in any way....