There is good news for diplomatic missions of the Government of Libya to the United States or the United Nations: The United States Department of the Treasury Office of Foreign Assets Control (OFAC) has issued a general license which will allow such parties to engage in certain transactions for goods and services are now allowed.

The authorization found in this new general license only pertains to those goods or services related to conducting official business of the missions, or for personal use of the employees of the missions. This does not include the purchase of goods or services for resale. Transactions for real property are also not authorized under this general license. Finally, payment for these goods and services must come from a U.S. financial institution which holds an OFAC specific license to process such transactions.

The same requirements do not apply for those parties who are merely employees of the diplomatic mission. Those individuals do not need to make payment for goods and services through a U.S. financial institution license by OFAC.

Here’s the problem: What do these diplomatic missions do during the interim period where U.S. financial institutions are waiting on a response for their license request? There was no mention by OFAC that expedited processing would be implemented for those U.S. financial institutions seeking specific licenses to carry out such transactions. Also, what if no U.S. financial institutions want to bother with it? Perhaps they don’t want to hassle with the expense, time, or stigma that will be associated with facilitating transactions pursuant to this general license. Such an attitude would certainly leave diplomatic missions from the Government of Libya in a tough situation; one in which they have authorization to purchase, but no bank to service the purchases. In sum, until a U.S. financial institution decides to service these transactions and obtains a specific license to conduct these transactions the Government of Libya’s diplomatic missions to the U.S. or the U.N. will be all dressed up with nowhere to go.

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.