In recent weeks I have been getting calls from numerous Iranian Americans who are inquiring into OFAC licensing for the transfer of personal funds as cash gifts or as inheritances from Iran to the U.S.. As usual I give them the standard line: non-commercial personal remittances from Iran to the United States are authorized to be processed by a U.S. depository institution so long as the funds are transferred from a third country foreign financial institution and the transfer is not related to any type of family-owned business. This is the rule, and has been the rule for sometime, as codified in 31 C.F.R. 560.516(a)(2). This rule is commonly referred to as a general license, which means it is an open authorization that OFAC has provided and does not require any specific application and approval in order to be utilized.

Recently, however, these individuals who are calling me are telling me that there are a number of lawyers and CPAs out there marketing to the Iranian American community stating that an OFAC specific license is needed for every type of transaction in relation to Iran, including these types of personal remittances. If this wasn’t bad enough some of these individuals are indicating that this is due to the recent change in the law due to OFAC’s amending the Iranian Financial Sanctions Regulations (“IFSR”). This is so wrong, that I have a hard time even knowing where to begin.

Let’s start with the fact that the recent IFSR changes related to the mandates of Section 1245 of the National Defense Authorization Act for Fiscal Year 2012 (NDAA) do not impact personal remittances to or from Iran. In short, those sanctions deal with denying foreign financial institutions who engage in significant financial transactions with the Central Bank of Iran and/or the designated Iranian banks access to correspondent or payable through accounts at U.S. depository institutions. It has nothing to do with the ability of U.S. depository institutions to process personal remittances from Iran.

Second, subsection C of Section 1245 of the NDAA, implemented by Executive Order 13599, did block all Iranian financial institutions, however, OFAC issued two General Licenses, following the issuance of Executive Order 13599, to allow for personal remittances to proceed unimpaired. As such, the old rule which was in place is still in place. Don’t believe me? Here is the language that OFAC actually uses in their letters concerning these types of transfers:

“The ITR [Iranian Transactions Regulations] also authorize United States depository institutions to process transfers of funds that arise from a family remittance not related to a family-owned enterprise. ITR, § 560.516(a)(2). Please be advised that transfers authorized by the ITR must be wired from in Iran to a non-U.S., non-Iranian bank outside the United States, although the ultimate destination may be an account held at a United States depository institution. See ITR, § 560.516(a).

On February 5, 2012, the President signed Executive Order 13599, “Blocking Property of the Government of Iran and Iranian Financial Institutions,” which blocks all property and interests in property of the Government of Iran, including the Central Bank of Iran, and any Iranian financial institution, that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, including any foreign branch. However, OFAC also issued two general licenses, which authorize certain transactions that would otherwise be prohibited by Executive Order 13599. Subject to certain exceptions, General License A authorizes under Executive Order 13599 all transactions involving property and interests in property of the Government of Iran or Iranian financial institutions that are authorized under general licenses set forth in the ITR, including§ 560.516.

Additionally, General License B authorizes U.S. depository institutions and U.S. registered brokers or dealers in securities to process transfers of funds to or from Iran or for or on behalf of an individual ordinarily resident in Iran who is not included within the term “Government of Iran” to the extent the transfer is a noncommercial, personal remittance and the transfer is not by, to, or through a person whose property and interests in property are blocked pursuant to the Weapons of Mass Destruction Proliferators Sanctions Regulations, 31 C.F .R. part 544 (“WMDPSR”), or the Global Terrorism Sanctions Regulations, 31 C.F.R part 594 (“GTSR”), or a person whose property and interests in property are blocked pursuant to any other part of 31 C.F.R. chapter V, or any Executive order, except an Iranian financial institution whose property and interests in property are blocked solely pursuant to Executive Order 13599.”

In short, you don’t need an OFAC specific license to send or receive personal remittances or family related remittances to and from Iran since it is already authorized by OFAC administered regulations. That said, the U.S. bank sending or receiving the funds may request a signed affidavit confirming that that the funds are indeed personal or family related in nature. Also, in some cases, people seeking to confirm that this general license applies to their case may file a request for interpretative guidance with OFAC to ensure that the general license applies to their specific facts. OFAC will send back an advisory opinion stating whether or not the general license applies. This is not a license authorization, but merely a confirmation by OFAC of the applicability of the general license to a specific set of facts.

Finally, a word of caution. It seems that everyone in Iran has become very generous as of late and is sending millions of dollars in gifts to family members in the U.S. I would caution that any structuring or characterization of a transaction to avoid or circumvent sanctions is deemed to be evasion and can carry stiff penalties. For example, inheriting real estate in Iran, does not mean that you can sell the property without an OFAC license just because it was inheritance and personal in nature. The above general license only applies to personal and family cash transfers and does not authorize any transactions which may otherwise be prohibited without an OFAC license.

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.