There have been a number of calls to our office recently about whether Iranian EB-5 and E2 treaty investor applicants need an OFAC license. Apparently there was some confusion about the general license found at 31 C.F.R. 560.505. That general license allows for transactions related to activities carried out pursuant to visa authorizations; for example, E-2 and EB-5 visas.

The confusion arises from transferring investment funds from Iran to the United States. In order for the general license to be applicable, the visa must have have been authorized or issued. In order for the visa to be issued, the visa applicant must show that they have invested some money into a U.S. company. In the case of Iranian EB-5 and E-2 investors, however, the funds cannot be transferred to the United States without a specific license authorization from the United States Department of the Treasury Office of Foreign Assets Control (OFAC). This license would authorize the importation of financial services from Iran.

Thus, the general license referred to above does not apply retroactively and as such cannot cover the initial investment required as part of the visa application process. In other words, the general license will only cover transactions related to activities which take place following the issuance of the visa; not the initial transfer of investment funds. Therefore, those Iranian individuals seeking to come to the United States on a treaty investor visa, will need to obtain an OFAC license, prior to investing money in a U.S. company and prior to filing their visa application.

There are also some additional considerations that these individuals need to account for. For example, these individuals are not permitted to earn income in Iran once they are in the United States, they cannot engage in transactions in Iran during their time in the U.S, and they are prohibited from facilitating transactions between foreign persons during their time in the U.S. Therefore, it is readily apparent that there are a great number of difficulties for Iranians traveling to the U.S. on visas. In some instances, it may not be worth the trouble if those individuals are seeking to maintain their life and responsibilities in Iran while in the U.S. on a visa.

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.

​