As we enter the final days of the existence of the Joint Plan of Action (“JPOA”)–the interim agreement between the P5+1 and Iran over Iran’s disputed nuclear program–I was reminded of a post I’ve been wanting to write for a while. In a recent license we obtained from that the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) to export aircraft parts to a commercial passenger carrier to Iran, I saw the following language in the cover letter attached to the license: “Upon consultation with the State Department….” As someone who frequently looks at OFAC licenses, I can tell you that this language is not typical in OFAC’s licensing cover letters, or in the authorizations themselves. So why would they include this type of language for this type of license?

One relatively educated guess is because the type of authorization being provided in this case is not necessarily of a variety that OFAC would normally want to provide. Rather, the JPOA Statement of Licensing Policy on Activities Related to the Safety of Iran’s Civil Aviation Industry (“JPOA-SLP”) is a creation of the JPOA and the nuclear negotiations themselves, not something that OFAC came up with on their own. In other words, there is a common belief that the State Department is the one pushing this policy and the issuance of these authorizations, though I would point out that OFAC did include 31 C.F.R. 560.528 in the Iranian Transactions and Sanctions Regulations (“ITSR”), and its predecessor the Iranian Transactions Regulations (“ITR”), which offers substantially similar, though more limited, authorization as the JPOA-SLP.

The language cited above, and this perceived belief, point to an often overlooked truth in sanctions world: OFAC is not completely responsible for everything that happens. There are a number of stakeholders in the sanctions interagency process, most notably of which is the State Department. It has been my experience that when another agency wants something bad enough, even if OFAC is opposed, there is a chance that it could happen given priorities placed on certain activities getting authorized by other stakeholders.

This also happens in the Specially Designated Nationals (“SDN”) delisting context. For example, when dealing with the delisting of those parties designated under the Foreign Narcotics Kingpin Designation Act(“Kingpin Act”), OFAC has previously stated that consultation with the Department of Justice or the Drug Enforcement Administration needs to be undertaken. It could be for that reason why some SDNs who may seem to meet OFAC’s delisting criteria are not being delisted, as there are overriding policy imperatives being pushed upon them by others in the interagency process.

Why does this make any difference? Well the point is that it should inform those folks out there writing license applications, or delisting petitions, to OFAC that there are other agencies that will be weighing on OFAC’s decisions and those agencies may have different priorities than OFAC. As such, it behooves sanctions practitioners to know the entirety of their audience when drafting submissions to OFAC, and to consider what other agencies who may be involved in the interagency process, and how they may react to the type of request being made.

In sum, it’s important to note that if OFAC denies or approves your submission, it may not be because they want to. So next time you are getting ready to point the finger at OFAC, or give them a pat on the back, remember that they may not always be the ones to blame or the ones to thank, but they are always the ones you must comply with.