One of the most frustrating aspects of dealing with economic sanctions regulations administered by the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) is having to apply the ambiguous language of the regulations to practical real world scenarios. Nowhere is this frustration more pervasive than in seeking to provide humanitarian relief in embargoed countries or in locations where a high number of Specially Designated Nationals (SDNs) are active or in control. Despite the fact that there are exemptions that aid humanitarian relief efforts and OFAC has traditionally issued general licenses to allow for the flow relief articles and funds to embargoed countries, we find that relief organizations are often confused by the regulations and put themselves at risk of violating OFAC sanctions.

The most recent example of this was General License C issued to allow financial donations to NGOs providing earthquake relief in Iran. OFAC also issued a statement offering guidance regarding the export of food and medicine to Iran for humanitarian relief under the International Emergency Economic Powers Act (IEEPA). Despite OFAC offering this guidance and authorization, some relief organizations misconstrued what OFAC was saying and almost exported items to Iran that clearly fell outside of the definitions of food and medicine. In addition, other organizations I spoke with almost transferred funds through methods would have been prohibited.

I guess the good news here is that the NGOs seeking to provide humanitarian relief are aware of OFAC and the requirements to comply with their regulations. One of the difficulties I have noticed, however, is that many of these parties are not so well funded as to have the ability to pay for experienced, knowledgeable counsel to advise them on the impact of the regulations. That means many times the NGOs are stuck having to make sense of a complex web of ambiguous regulations and statutes by themselves; a daunting task even for counsel experienced with OFAC. This inevitably will lead to problems. The golden rule I would offer to these organization is to only follow the strict langauge of OFAC’s general licenses, exemptions and guidance. Anything else may lead to liability down the road.

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.