823. Do non-U.S. persons risk exposure to U.S. secondary sanctions for engaging in humanitarian-related transactions or activities involving the Central Bank of Iran (CBI) or the National Iranian Oil Company (NIOC) that U.S. persons would be authorized to engage in under General License No. 8A (GL 8A)?
No. Non-U.S. persons generally do not risk exposure under U.S. secondary sanctions relating to Iran for engaging in the sale of agricultural commodities, food, medicine, or medical devices to Iran, as such transactions are generally subject to exceptions in otherwise applicable authorities, provided the transactions do not involve persons designated in connection with Iran’s support for international terrorism or weapons of mass destruction (WMD) proliferation. Non-U.S. persons do not risk exposure under U.S. secondary sanctions for engaging in humanitarian-related transactions or activities involving the CBI, NIOC, or any entity in which NIOC owns a 50 percent or greater interest, that would be authorized under GL 8A if engaged in by a U.S. person, provided such transactions and activities do not involve any person designated in connection with Iran’s support for international terrorism or WMD proliferation, other than the CBI, NIOC, or any entity in which NIOC owns a 50 percent or greater interest.
Date Released
October 26, 2020
1) Compare FAQ # 637 and refer generally to Section 7(c) of General Note on Secondary Sanctions and “Derivative Designation” Criteria; Identification of the Gap Between the Theoretical and Practical Scopes of Authorities Targeting Transactions with no U.S. Nexus; Enforcement Risk Management (The De Facto Recognition of General Licenses for Secondary Sanctions and Derivative Designation Authorities). This FAQ is consistent with OFAC's prior guidance concerning the relationship between general licenses applicable to U.S. persons and OFAC's willingness to make use of secondary sanctions authorities. Technically, because general licenses do not apply to activities outside the scope of "primary sanctions" prohibition, there would be nothing to prevent OFAC from considering a non-U.S. person's dealings involving the CBI to constitute a "significant transaction" with a SDGT for the purposes of the secondary sanctions authorities contained in EO 13886, even if those dealings would be within the scope of GL 8 if engaged in by a U.S. person. As a matter of practice, however, OFAC tends to 'unofficially' honor, for the purposes of secondary sanctions and derivative designations, general licenses that, on their faces, apply only to primary sanctions prohibitions.
Note that, in this case and as a result of the designations at issue being pursuant to EO 13224, transactions involving travel and "informational materials" are potentially sanctionable for non-U.S. persons because such transactions would not be exempt if engaged in by U.S. persons. Apart from the transactions licensed by General License No. 8A, the scope of the general licenses that apply to U.S. person activities involving SDGTs is extremely narrow.
2) The FAQ was initially released on 02-27-2020, when the CBI was first designated pursuant to EO 13224, and was amended on 10-26-2020 to account for the designation of NIOC pursuant to EO 13224. The substance of the FAQ did not change as a result of the 10-26-2020 designation.
3) Refer generally to General Note on "Counterfactual Secondary Sanctions and Derivative Designation Safe Harbors" in Certain OFAC Guidance and FAQs (System Ed. Note)