Last Wednesday, I stepped into a courtroom to handle a very short trial. When I came out of the daze of trial, I realized that I had missed an incredibly busy week in the world of U.S. economic sanctions. Here are some of the highlights of what happened and my thoughts on them.

1. Standard Chartered Bank Scandal: Obviously the biggest development was the reports that have come out that Standard Chartered Bank has been involved in assisting Iran in the concealing of transactions that would violate economic sanctions, and possibly a host of anti-money laundering laws. While this is being heavily covered in the news, and I don’t have any personal knowledge of the facts to add anything new to the debate, I would like to point out that the response provided by one Standard Chartered official of ” You f*?king Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians”, is a sentiment that I have heard from other folks in the international community, so I was not surprised to hear that and it is not an uncommon feeling around the world.

2. Congress Passes New Iran Sanctions: Congress continues to be sanctions crazy. Last week they agreed on a new sanctions bill that will supposedly impose even stricter sanctions on Iran, all while complaining that that sanctions aren’t working. Of course, the Administration keeps saying give sanctions time to work and they are absolutely right. Although the sanctions can be imposed by the Executive Branch almost instantaneously, we have to keep in mind that sanctions leverage the private sector. As such, the private sector needs time to update their compliance programs, and to search for and correct any violations occurring which were not violations prior to the new laws. Once that occurs, then it takes time for the squeeze to be felt by the targeted party. For example, I represented a designated party who despite having a designation placed upon them did not have certain accounts held with U.S. institutions shut down until three months after their designation. In short, sanctions take time to work.

3. New Designations: The United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated a bunch of folks over the past week including a group of Italians under the Transnational Criminal Organizations Sanctions Regulations, a number of individuals and entities in Belize under the Foreign Narcotics Trafficking Kingpin Designation Ave (“Kingpin Act”), and one Saudi citizen under the Global Terrorism Sanctions Regulations.

4. New Guidance on Humanitarian Aid to Syria: OFAC issued some new FAQs on providing humanitarian assistance to Syria, which included clarifications that no OFAC license is required to export U.S.-origin food or medicine to Syria, donations to Non-Governmental Organizations helping the Syrian people are allowed, and that money can be sent to friends and family in Syria without an OFAC license so long as no blocked banks are involved.

5. New Report on Trade Sanctions Reform and Export Enhancement Act of 2000 (“TSRA”) Issued: OFAC released its biennial report on licensing of agricultural commodities, medicine, and medical devices to Iran and Sudan. The only problem is that this report only covers October 2006 to September 2008. Obviously a lot has changed since that time, and although OFAC did provide some interesting statistics in that report, they are all over four years old which is an eternity in sanctions time.

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.