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OFAC Guidance on NGO Exports of Aid to Areas Dominated by Blocked Persons

Thursday, October 23, 2014
Sandler, Travis & Rosenberg Trade Report

The Office of Foreign Assets Control issued Oct. 17 the following guidance to clarify the reach of economic sanctions for registered 501(c)(3) non-profit non-governmental organizations involved in the provision of humanitarian assistance.

- OFAC is fully supportive of the broader U.S. government approach to facilitating humanitarian assistance. The imposition of economic sanctions against regimes or groups carrying out violence against innocent civilians is a complement to, and not in opposition to, the objectives of humanitarian assistance.

- OFAC issues general licenses where appropriate and prioritizes license applications, compliance questions and other requests from NGOs seeking to provide humanitarian assistance.

- NGOs may provide humanitarian assistance in countries that are not subject to comprehensive sanctions (such as Yemen, Iraq, Somalia, South Sudan or Côte d’Ivoire) without the need for a license from OFAC so long as they are not dealing with persons blocked by sanctions, such as those listed on OFAC’s Specially Designated Nationals and Blocked Persons List or any entity owned 50 percent or more by blocked persons.

- Some areas may be dominated by armed groups under circumstances where the group’s leaders have been designated by OFAC but the group as a whole has not been designated. An entity that is commanded or controlled by an individual designated by OFAC is not considered blocked by operation of law. As a result, payments (including “taxes” or “access payments”) made to non-designated individuals or entities under the command or control of an SDN do not, in and of themselves, constitute prohibited activity. However, U.S. persons should employ due diligence to ensure that an SDN is not, for example, profiting from such transactions.

- In areas dominated by designated armed entities (e.g., those listed as Specially Designated Global Terrorists), U.S. persons should exercise caution not to provide financial, material, technological or other services to or in support of the designated entity. In circumstances involving a dangerous and highly unstable environment combined with urgent humanitarian need, OFAC recognizes that some humanitarian assistance may unwittingly end up in the hands of members of a designated group. Such incidental benefits are not a focus for OFAC sanctions enforcement.

- If an NGO is confronted with a situation in which, in order to provide urgently needed humanitarian assistance, it learns that it must provide funds or material support directly or indirectly to an SDN group that is necessary and incidental to the provision of such humanitarian assistance, the NGO should reach out to OFAC directly. OFAC and its interagency partners will work with the NGO to address any such issues on a case-by-case basis in an expeditious manner.

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