The President and U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) recently announced new sanctions and guidance for existing sanctions concerning Iran, Cuba, and Venezuela.
Iran
On September 4, 2019, OFAC issued new FAQs relating to the bunkering of vessels carrying goods to or from Iran. OFAC advised that the bunkering of non-Iranian vessels transporting non-sanctioned goods to or from Iran is permissible in a country other than Iran if: (i) the transaction does not involve U.S. persons or U.S. owned or controlled foreign entities, or is otherwise exempt from OFAC regulation; and (ii) the transaction does not involve persons on OFAC’s Specially Designated Nationals and Blocked Persons list (“SDN List”). However, the bunkering of a non-Iranian vessel transporting sanctionable goods to and from Iran carries the risk of being subject to sanctions, unless an applicable waiver or exception applies.
In addition, OFAC advised that the provision of bunkering services to an Iranian-owned, controlled, chartered, operated, or flagged vessel could be sanctionable. In particular, non-U.S. persons that provide bunkering services to Iranian vessels that have been identified as blocked property of an SDN run the risk of being designated as SDNs themselves.
Cuba
On September 6, 2019, OFAC announced updates to its Cuban Assets Control Regulations (CACR), further restricting the sanctions in place against Cuba. The new amendments become effective on October 9, 2019 and provide for several new requirements and limitations. Specifically, OFAC eliminated the authorization for banking institutions subject to U.S. jurisdiction to process “U-turn” transactions, such that banking institutions subject to U.S. jurisdiction are no longer permitted to process U-turn transactions where neither the originator nor beneficiary is a person subject to U.S. jurisdiction – however, such banking institutions are permitted to reject such transactions.
In addition, OFAC amended the general license authorizing family remittances to place a cap of $1,000 as the maximum amount that one remitter can send to one Cuban national as a family remittance per quarter. OFAC also eliminated the general license for donative remittances, among other changes.
Venezuela
On September 9, 2019, OFAC issued General License 34, which authorizes all “transactions and activities” involving individuals who meet the definition of the “Government of Venezuela” under Executive Order 13884, provided that the individuals are: (i) U.S. citizens; (ii) permanent resident aliens of the U.S.; (iii) individuals in the U.S. who have a valid U.S. immigrant or nonimmigrant visa (other than individuals in the U.S. as part of Venezuela’s mission to the United Nations); or (iv) former employees and contractors of the Government of Venezuela.
U.S. persons remain generally prohibited from engaging in transactions with the Government of Venezuela, or entities that the Government owns, indirectly or directly, 50 percent or more. However, U.S. persons are generally not prohibited from transacting with the people or in the country of Venezuela, provided it does not involve blocked persons or any conduct that is otherwise restricted.
Concluding Thoughts
Businesses and individuals should continue to exercise caution in transacting with counterparties in Iran, Cuba, and Venezuela, as OFAC has been aggressive in enforcing its sanctions programs. The political landscape is developing quickly, which could mean additional OFAC sanctions in the future. We will continue to closely follow events in this space and will report on any further developments.
If you have any questions or concerns about U.S. sanctions, please contact Bruce G. Paulsen (212-574-1533), Andrew S. Jacobson (212-574-1477), Noah S. Czarny (212-574-1642), or Paul B. Koepp (212-574-1613) at Seward & Kissel’s Sanctions Practice Group.
