The Treasury Department has received limited requests for specifically tailored licenses to send medical equipment to countries that the U.S. has targeted with commercial and financial restrictions, current and former officials said Friday.
In a 10-page advisory Thursday, the department’s Office of Foreign Assets Control summarized the range of exemptions currently in place for firms seeking to export medical supplies to countries under U.S. sanctions and reiterated that several types of equipment do not require special licensing.
In the case of Iran, “most medicine and medical devices, including … face shields, certain respirators and masks such as N95, N99, and N100 masks, and certain ventilators, already qualify for export and re-export to Iran under general licenses, without the need for further authorization from OFAC,” the agency noted.
Nearly 30 other items, including oxygen generators, certain air-filtration systems, decontamination showers and specific kinds of “diagnostic medical imaging equipment” require a case-by-case review, which OFAC is “prioritizing and expediting” amid the global coronavirus pandemic that has hit Iran especially hard.
Any request for authorization relating to COVID-19, the illness caused by the novel coronavirus, will be given “utmost priority and urgency,” OFAC Director Andrea Gacki said Friday during a virtual panel hosted by the Center for a New American Security, a policy center in Washington, D.C.
As for the more sensitive products, “I think the question is: do we know that those would help Iran? We’ve been monitoring our incoming requests very closely—I know of no request to export that type of equipment to Iran,” Gacki said.
Despite OFAC’s assurances, U.S. companies that want to export personal protective equipment, or PPE, to any foreign country, including those not targeted by sanctions, may still see those shipments detained if they do not get approval from FEMA, the Federal Emergency Management Agency.
FEMA’s policy, which the agency finalized April 10, is probably limiting applications for special licenses to OFAC, Gacki said Friday. “We’re also not seeing a ton of requests to export PPE, I think in large part because of the needs of the United States,” she said.
OFAC has issued at least a dozen rounds of sanctions against entities in Iran, Venezuela, Zimbabwe and elsewhere since the beginning of February, when clear signs emerged that the novel coronavirus had spread beyond its initial epicenter in Wuhan, China.
On Feb. 27, five months after a terrorism designation effectively banned payments for humanitarian shipments to Iran despite previous authorizations, OFAC issued a general license to further enable those goods to flow to the Islamic Republic.
But companies remain wary of using U.S. general licenses for humanitarian aid to Iran for fear they may still unwittingly violate sanctions if shipments benefit certain blacklisted parties, John Smith, who directed OFAC from February 2015 until May 2018, said during the panel Friday.
“You have general licenses but you also have the threats of maximum pressure … if you’re one of the NGOs or a bank that’s asked to be involved in these types of transactions, it may be a lose-lose situation,” said Smith, now a Washington, D.C.-based partner with the Morrison & Foerster law firm. “That, I think, is what is chilling a lot of the delivery.”
In February, the agency also announced support for a new payment mechanism that shields Swiss banks from U.S. secondary sanctions when processing payments related to food and medical supplies for Iran as long as those institutions perform enhanced due diligence.
Gacki acknowledged OFAC’s support for the mechanism Friday and drew a contrast between Switzerland and the EU, whose own “special purpose vehicle,” Instex, seeks to enable Iran-related trade more generally and completed its first transaction last month.
“We took note of the initial [Instex] transaction on March 31,” Gacki said. “Unlike the Swiss channel where we have a high degree of comfort on the level of due diligence, we don’t have that same level of insight into the Instex.”
Contact Daniel Bethencourt at email@example.com
|Source:||U.S.: OFAC , U.S.: Department of Treasury|
|Document Date:||April 17, 2020|