Last Friday the United States Department of the Treasury Office of Foreign Assets Control (“OFAC”) released its quarterly report on the issuance of licenses under the Trade Sanctions Reform and Export Enhancement Act of 2000 (“TSRA”) which is commonly referred to as the TSRA program. The TSRA program is utilized for license applications for the export of agricultural commodities, medicine, and medical devices to Iran, Sudan, and Cuba.

These quarterly reports provide statistics as to licensing determinations made pursuant to the TSRA program. Among the statistics provided, OFAC indicates the amount of processing time for three categories: 1) License Denials, 2) License Approvals; 3) Returns without Action.

In this latest quarterly report OFAC has indicated that license applications which were denied were taking an average of 117 business days to process. This had prompted several people to call me with concerns that the recent delays they are experiencing in their TSRA license applications meant that their licenses would be denied. They, of course, based their concerns on this latest TSRA quarterly report.

Well the good news is that if your TSRA application is currently being delayed then it is not necessarily going to be denied. First, the TSRA quarterly report issued last Friday provides statistics for April 2010 through June 2010; not 2011. Therefore, the statistics supplied are over a year old.

Second, it is unlikely that those statistics from the April 2010-June 2010 period will remain consistent with those numbers from April 2011-June 2011. The reason for this lies with the imposition of sanctions against both Libya and Syria in the past several months and the incredible backlog that has been created at OFAC as a result.

As most anyone who has had matters pending before OFAC will tell you, things can take time with OFAC. Add that to the increased strain they have been put under due to the imposition of two new sanctions programs and the reason for the delays becomes pretty clear. Thus, while I cannot say that all pending TSRA license applications will be granted, if you are experiencing delays in the processing of those license applications, it may be due more to the workload OFAC is facing, rather than the ineligibility of your proposed transactions for licensing.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.

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