International Trade Law News /title <!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Strict//EN" ""> <html xmlns="" xml:lang="en" lang="en"> <meta name="verify-v1" content="6kFGcaEvnPNJ6heBYemQKQasNtyHRZrl1qGh38P0b6M=" /> <head> <title>International Trade Law News

« Home | U.S. Senate Passes Bill Extending GSP Program and ... » | Registration for U.S.-China High Technology Workin... » | Guest Post on Census Blog Serves as Important Remi... » | U.S. Lifts Most Financial Sanctions on Libyan Gove... » | State Department Finally Publishes Notice Regardin... » | OFAC Issues Additional Syria and Libya Sanctions G... » | BIS Publishes New Best Practices for Preventing Un... » | Syria Update: President Obama Signs Executive Orde... » | Summary of BIS 2011 Update Conference on Export Co... » | Summary of BIS 2011 Update Conference on Export Co... » 

October 17, 2011 

OFAC Issues General Licenses to Export Food Products to Iran and Northern Sudan

The Treasury Department's Office of Foreign Assets Control (OFAC) recently made changes to the Iran and Sudan sanctions regulations that will have a favorable impact on U.S. exporters of food and nutritional products.

Specifically, OFAC issued a final rule amending the Iranian and Sudanese Transactions Regulations by adding a general license authorizing the exportation or reexportation of “food” products to the Governments of Iran or Northern Sudan, individuals or entities in Iran or Northern Sudan, or persons in third countries purchasing specifically for resale to any of the foregoing parties in Iran and Northern Sudan, and the conduct of related transactions. No military or law enforcement purchasers or importers are authorized.

A general license is preexisting legal authority to conduct a transaction and does not require the submission of any license application to OFAC in order to utilize the authority. As a result, U.S. exporters no longer need to obtain a specific license from OFAC to sell food products to authorized customers in Iran or Northern Sudan.

The term “food” is broadly defined in OFAC's regulations as “items that are intended to be consumed by and provide nutrition to humans or animals in Iran, including vitamins and minerals, food additives and supplements, and bottled drinking water, and seeds that germinate into items that are intended to be consumed by and provide nutrition to humans or animals in Iran.” The term “food” does not include alcoholic beverages, cigarettes, gum, or fertilizer. In addition, there are several types of food products that are specifically excluded from eligibility for this general license.

It is important to note that OFAC only authorizes the following payment options for exports made under these general licenses:

1. Payment of cash in advance (i.e., wire transfer);
2. Sales on open account, provided that the account receivable may not be transferred by the person extending the credit; or
3. Financing by third-country financial institutions that are neither U.S. persons nor Government of Iran entities. Such financing may be confirmed or advised by U.S. financial institutions.

Payments by letter of credit (L/C) issued by a bank in Iran or Northern Sudan still requires a specific license to be issued by OFAC. Therefore, if the only way to obtain payment for the products is a L/C issued by an Iranian bank the exporter/beneficiary will still have to apply to OFAC for a specific license.

As with all licensed transactions involving Iran or Northern Sudan, banks included on OFAC’s Specially Designated Nationals List (SDN List) may not be involved in the payment transaction, even if cash in advance or one of the three payment mechanisms listed above is used.

While these new general license will be a useful tool for U.S exporters, exports to Iran and Northern Sudan present a number of logistical and compliance issues. As a result, exporters must closely coordinate these transactions with their freight forwarders, banks and export compliance counsel in order to prevent delays.

Labels: , ,



Subscribe to our confidential mailing list

Mobile Version

Search Trade Law News

International Trade and Compliance Jobs

Jobs from Indeed




  • This Site is presented for general informational purposes only and does not constitute legal advice. No attorney-client relationship is formed when you use this Site. Do not consider the Site to be a substitute for obtaining legal advice from a qualified attorney. The information on this Site may be changed without notice and is not guaranteed to be complete, correct or up-to-date. While we try to revise this Site on a regular basis, it may not reflect the most current legal developments. The opinions expressed on this Site are the opinions of the individual author.
  • The content on this Site may be reproduced and/or distributed in whole or in part, provided that its source is indicated as "International Trade Law News,".
  • ©2003-2015. All rights reserved.

Translate This Site

Powered by Blogger