On April 5, 2021, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) published two new Frequently Asked Questions (“FAQs”) related to Syria. Generally, OFAC issues public guidance related to its sanctions programs in the form of FAQs published on its website.
FAQ 884 clarifies that, with respect to non-US persons, OFAC will not consider transactions to be “significant” for the purpose of a sanctions determination under the Caesar Syria Civilian Protection Act of 2019 (“Caesar Act”) if US persons would not require a specific license from OFAC to participate in such a transaction. Accordingly, non-US persons, including nongovernmental organizations (“NGOs”) and foreign financial institutions, would not risk exposure to sanctions under the Caesar Act for engaging in activity, or facilitating transactions and payments for such activity, that is authorized for US persons under a general license (“GL”) issued pursuant to the Syrian Sanctions Regulations (“SySR”).
OFAC provided a list of GLs within the SySR related to humanitarian assistance and trade with Syria in its April 16, 2020 Fact Sheet: Provision of Humanitarian Assistance and Trade to Combat COVID-19. Section 7425 of the Caesar Act codifies, with some exceptions, the GL in § 542.516 of the SySR that authorizes certain services in support of NGOs. In addition, § 7432 of the Caesar Act includes a humanitarian waiver for activities not otherwise covered by § 542.516.
FAQ 884 also cautions that OFAC’s guidance with respect to non-US persons does not apply to transactions and activities that may be subject to sanctions under other sanctions programs, such as transactions with blocked persons designated under Executive Order (“EO”) 13224 (OFAC’s counterterrorism authority) or EO 13894 (OFAC’s Syria-related authority), unless exempt or otherwise permitted by OFAC.
FAQ 885 clarifies that US and non-US persons, including NGOs and foreign financial institutions, can provide or facilitate certain humanitarian assistance to Syria without the risk of sanctions. The export of US-origin food and most medicines to Syria is not prohibited and does not require a Department of Commerce Bureau of Industry and Security (“BIS”) or OFAC license (see 31 CFR § 542.510, 15 CFR § 746.9, and Syria FAQ 229). Therefore, non-US persons would not risk exposure to sanctions under the Caesar Act for engaging in such activity.
In addition, US persons providing services ordinarily incident to the export or reexport of certain non-US-origin food and most medicines to Syria is not prohibited and does not require an OFAC specific license (see 31 CFR § 542.525). Thus, non-US persons would not risk exposure to sanctions under the Caesar Act for engaging in such activity.
Finally, FAQ 885 emphasizes that, “OFAC remains committed to ensuring that humanitarian assistance can flow to the people of Syria and maintains a favorable policy supporting the provision of humanitarian assistance. Treasury continues to support the critical work of governments, certain international organizations, NGOs, and individuals delivering food, medicine, medical supplies, and humanitarian assistance to civilians in Syria.”
We will continue to monitor developments in this area, and encourage you to subscribe to be kept informed of latest developments. Please contact the authors or your usual Herbert Smith Freehills contacts for more information.