Last Friday, the United States Department of the Treasury Office of Foreign Assets Control (“OFAC”) issued a general license which authorized transactions between U.S. persons and Tidewater Middle East Company (“Tidewater”), a newly designated Specially Designated National (SDN) under the Weapons of Mass Destruction Proliferators Sanctions Regulations, for the next two months so long as the transactions relate to exports of agricultural commodities, medicine, and medical devices to Iran or the Government of Iran, authorized pursuant to a valid TSRA license.

In addition, the general license does require that a contract was also entered into prior to June 23, 2011 and that those engaging in transactions pursuant to this general license file reports with OFAC detailing the transactions within 30 days after such transactions take place.

I actually applaud OFAC’s move here as it allows for those transactions already underway to be complete without being stymied by the designation of Tidewater. I recall last summer, when Congress passed the Comprehensive Iran Sanctions Accountability and Divestment Act of 2010 and OFAC was required to revoke the general license for Iranian-origin foodstuffs and carpets, many people lost a lot of money by virtue of the fact that their transactions were already in progress at the time of the revocation. Such a general license as we are seeing issued in regards to TSRA transactions involving Tidewater, could have saved U.S. importers of Iranian-origin food stuffs and carpets a lot of money and headaches last year. Hopefully, this is a sign of things to come and OFAC will consider the impact these designations can have on innocent parties if pending transactions with the designated parties are barred from being consummated.

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.