On October 8, 2020, the Secretary of the Treasury, in consultation with the Secretary of State, identified the Iranian financial sector, pursuant to the terms of Executive Order 13902, authorizing the Treasury to sanction any Iranian financial institution. As a result, the Office of Foreign Assets Control designated eighteen Iranian banks, including one Iranian military-affiliated bank that was also designated pursuant to EO 13882, under the Treasury’s counter-proliferation authority.
As a result of these designations, all US property is blocked, and all transactions related to these entities are generally prohibited. In addition, any person or financial institution that engages in certain transactions with these sanctioned entities after a 45-day wind-down period (ending November 22, 2020), may be exposed to secondary sanctions.
OFAC emphasized that these sanctions are intended to target the Iranian regime and are not directed at the people or Iran or commercial humanitarian exports and transactions. Therefore, OFAC concurrently issued General License L and new Frequently Asked Questions to discuss the types of humanitarian aid that are permitted, as well as a 45-day wind-down period to enable non-US persons to conclude non-humanitarian transactions. General License L, “Authorizing Certain Transactions Involving Iranian Financial Institution Blocked Pursuant to EO 13902,” authorizes certain humanitarian activities such as transactions (including the sale) of agricultural commodities, including food and medicine, involving Iranian financial institutions that are not prohibited under the Iranian Transactions and Sanctions Regulations (ITSR), 31 CFR part 560. This includes activities authorized by general and specific licenses issued pursuant to the ITSR.
OFAC issued Frequently Asked Questions 842 – 847, to address the scope of GL L and the authorized wind-down period. FAQ 842 summarizes GL L, and FAQ 843 and 844 clarifies the types of humanitarian aid allowed by US and non-US persons in certain circumstances. FAQ 845 explains the types of transactions authorized during the 45-day wind down period, that ends on November 22, 2020. FAQ 846 provides that waivers issued by the Department of State and exceptions made under the IFCA remain valid during the wind-down period. Finally, FAQ 847 specifies that activities by non-US persons are generally not sanctionable as long as they are consistent with activities permissible by US persons; OFAC also disclosed plans to provide additional guidance to address authorizations after the wind-down period.