One of the pleasures of my daily existence is hearing from potential clients who are seeking to comply with U.S. economic sanctions administered by the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC). Lately, our phones have been ringing off the hook with persons seeking to export food, medicine, and medical devices to Iran. In particular, we are hearing from a lot of potential clients about the lack of medical devices for dentistry. My thinking here is that the latest round of sanctions imposed against Iran this year may have cut off imports of U.S. origin medicine and medical devices to the point where exporters formerly comfortable about shipping to Iran are no longer so. Unfortunately, it seems that the regular people in Iran are being adversely impacted by the latest sanctions are are unable to get the medicine and medical products that they need to survive.

The good news here is that it is very possible to obtain license authorization to export medicine and medical devices due to the Trade Sanctions and Export Enhancement Act of 2000 (TSRA). TSRA called for OFAC to authorize exports of qualifying agricultural commodities, medicine, and medical devices to a few sanctioned countries including Iran. As such, OFAC has a special program–with a nifty online application process–for applying for such licenses. The problem as of late, however, has been getting paid for the exports since although OFAC continues to issue licenses to engage in transactions with Iran, they are simultaneously going around to banks all over the world and asking them to cease business with Iranian financial institutions. This has created a scenario where the licenses being issued are worthless because of no third country intermediary banks to facilitate the payments…unless of course you know the right banks to use.

There are still banks which are facilitating licensed transactions between Iran and the United States, however, they are few and far between and they are mainly only handling trade finance. Those seeking to export agricultural commodities, medicine, and medical devices should first understand how they payments will be made or retain counsel who knows which banks to use. That should be done before applying for the license, lest you end up with a license that can’t be used properly. All of this aside, if the calls coming into our office the last two weeks are any indication of the demand for TSRA licenses, OFAC’s TSRA Office is in for a long summer.

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.