On April 27, 2023, the US Department of the Treasury’s Office of Foreign Assets Control announced the designation of four senior officials of Iran’s Islamic Revolutionary Guard Corps Intelligence Organization (“IRGC-IO”) for their involvement in hostage-taking or the wrongful detention of US nationals in Iran. The US Department of State also concurrently designated the IRGC-IO and Russia’s Federal Security Service (“FSB”) for its wrongful detention of at least one US national abroad. OFAC reports that these designations are the first imposed under Executive Order 14078, “Bolstering Efforts to Bring Hostages and Wrongfully Detained US Nationals Home,” enacted in July 2022 to enable the US to target hostage-takers and those who wrongfully detain US nationals with financial sanctions and visa restrictions.
OFAC reports that it designated four officials – Ruhollah Bazghandi (IRGC-IO Counterintelligence official); Mohammad Kazemi (the 2022 commander of the IRGC-IO); Mohamad Mehdi Sayyari (the IRGC-IO Co-Deputy Chief); and Mohammad Hasan Mohagheghi (the IRGC-IO Co-Deputy Chief Brigadier General) – pursuant to EO 14078 for acting or purporting to act on behalf of the IRGC-IO, a person blocked pursuant to EO 14078. Notably, Kazemi was previously designated by the US in 2022 for acting on behalf of the IRGC in support of Iran’s crackdown against protestors in Iran in response to the killing of Mahsa Amini. According to OFAC, Kazemi was redesignated for overseeing operations by the IRGC-IO aimed at suppressing civil society and arresting Iranian dissidents, including dual nationals.
As a result of the OFAC designations, all property and interests in property of the designees within the United States or within the possession or control of a US person are blocked, and US persons are generally prohibited from engaging in transactions involving the designated persons. In addition, entities owned 50 percent or more by a designated person or entity are also blocked, and foreign financial institutions that knowingly conduct significant transactions for the designated entities risk exposure to sanctions.
In light of the State Department’s designation of the FSB, on April 27, 2023, OFAC also issued Cyber-related General License 1C to authorize certain transactions with the FSB that would otherwise be prohibited by the Cyber-Related Sanctions Regulations (31 CFR part 578), Weapons of Mass Destruction Proliferators Sanctions Regulations (31 CFR part 544), and EO 14078. The general license authorizes transactions related to receipt or utilization of licenses, permits, or certifications issued or registered by the FSB for the importation or use of information technology products in Russia. However, the transactions for the provision of goods or technology are only authorized if they are subject to the Export Administration Regulations (15 CFR parts 730-774), or otherwise authorized by the Department of Commerce, and the payment of fees to the FSB does not exceed $5,000 in any calendar year.
OFAC also amended Cyber-related Frequently Asked Questions 501, 502, and 503. FAQ 501 provides a general overview of the provisions in GL 1C, and FAQ 502 makes clear that the general license only authorizes certain transactions performed under FSB’s administrative and law enforcement capacities. In FAQ 503, OFAC emphasizes that GL 1C does not authorize the export of hardware or software directly to the FSB or in situtaions where the FSB is an end user of such hardware or software.