Compliance Practices for Exporters

Massachusetts Export Center 2015 Export Expo

December 11, 2015

Frank BoudraOffice of Foreign Assets Control

Agenda

• What is OFAC?• Best practices for compliance• The licensing process• Recent updates: Iran, Cuba, Crimea, and

Ukraine• Enforcement Guidelines• Useful Resources

What is OFAC?

Office of Foreign Assets Control (OFAC)U.S. Department of the Treasury

OFAC administers and enforces economic and trade sanctions against targeted:

• Foreign governments • Individuals • Entities • Practices

Jurisdiction• Individuals, located anywhere in the world, doing business in the United

States or through U.S. persons

• Corporations, located anywhere in the world, doing business in the United States or through U.S. persons

• Transactions:– Transactions by foreign persons to the extent that they involve the

United States;– Transactions in property of a blocked person that comes within the

United States;– In limited circumstances, transactions involving controlled U.S.-origin

goods or technology.

The Specially Designated Nationals (SDN) List

OFAC’s prohibited parties list

Currently, over 5,800 individuals and entities identified by OFAC

Individuals, entities, vessels, banks all over the globe with whom or with which transactions are prohibited

UPDATED FREQUENTLY

Sanctions List Searchwww.treasury.gov/SDN

Agenda

• What is OFAC?• Best practices for compliance• The licensing process

OFAC Compliance Program

OFAC Compliance Program

• Risk Assessment• Internal Controls• Testing/Audit• Responsible Individual(s)• Training

Risk Assessment

Internal Controls – Document Review

Internal Controls – Document Review

Internal Controls/Due Diligence

Sanctions ProgramsComprehensive ProgramsSudan, Cuba, Syria, Iran (ITSR and IFSR), Ukraine/Russia-related (Crimea)

Limited ProgramsBurma (Myanmar), Conflict Diamonds, North Korea, Ukraine/Russia-related (Sectorial Sanctions)

List-Based Programs(Activity): Counter-Terrorism, Non-Proliferation, Counter Narcotics Trafficking, Transnational Criminal Organizations, Somali Piracy, Grave Human Rights Abuses Via Information Technology, Foreign Sanctions Evaders

(Regime): Balkans, Belarus, Burundi, Cote D’Ivoire, Democratic Republic of the Congo, Iraq, Lebanon, Libya, South Sudan-Related Sanctions, Ukraine/Russia-related, Venezuela-Related Sanctions, Yemen-Related Sanctions, Zimbabwe

OFAC Terminology: Licenses

General License• Regulatory provision authorizing otherwise prohibited

transactions • No separate authorization necessary• Issued into the regulations or on OFAC’s website

Specific License• Authorization from OFAC issued to a specific person(s) • Allows a specific activity that would otherwise be prohibited

Agenda

• What is OFAC?• Best practices for compliance• The licensing process• Recent updates: Iran, Cuba, Crimea, and

Ukraine

Iran Highlights

Examples: General Licenses*

• Gifts• Patents, Trademarks

& Copyrights• Household goods• Telecommunications

and Mail

• Legal services• Personal remittances• Official business of

certain International Organizations

• Sale of real property in Iran

*Not a comprehensive list and adhering to certain conditions

Exports of Food, Medicine &Medical Devices

• Regulations allow for the export of food, medicine & medical devices to Iran

• Must fit the regulation’s definition• Must not be destined for certain prohibited

parties • Anything outside these parameters must be

authorized by a specific license.

Applying for a Specific License

• Important information to remember to include

• Applicant information• Banks• Brokers• Purchasing agents• End-users• Shipment terms• Payment mechanism

• http://www.treasury.gov/resource-center/sanctions/Pages/licensing.aspx

Joint Plan of Action (JPOA)• Limited, temporary, and reversible sanctions relief in effect from January

20, 2014, to June 30, 2015• Civil aviation safety statement of licensing policy• None of the U.S. trade sanctions that prohibit U.S. companies, including

their foreign subsidiaries, from engaging in trade with Iran have been altered, other than in the statement of licensing policy relating to civil aviation safety

Cuba Updates

Cuba Changes

• Travel• Travel and Carrier Services• Insurance• Importation of Goods• Telecommunications• Consumer Communications

Devices• Financial services• Remittances• Third-Country Effects

• Small Business Growth• Cash in Advance• Supporting Diplomatic

Relations and Official USG Business

• Support for the Cuban People

• Gift Parcels• Liberalizing License

Application Review Policy

January 15, 2015

Cuba Changes

• Travel• Travel and Carrier Services• Telecommunications• Consumer Communications Devices• Third-Country Effects• Cash in Advance

Crimea

Crimea- E.O. 13685

• Prohibits new investment in Crimea• Prohibits imports or exports to or from the

U.S. to Crimea, directly or indirectly• Prohibited facilitation

Crimea- E.O. 13685• General Licenses

– GL 4: Export or reexport of agricultural commodities, medicine, and medical supplies (including replacement parts)

– GL 6: Noncommercial, Personal Remittances Authorized– GL 7: Operation of Accounts Authorized– GL 8: Transactions Related to Telecommunications and

Mail Authorized – GL 9: Exportation of Certain Services and Software Incident

to Internet-Based Communications Authorized

Ukraine/Russia-related Sanctions(List-based)

Ukraine-related Sanctions(List-based)

E.O. 13622 Directive 1

E.O. 13622Directive 1

E.O. 13622 Directive 2

E.O. 13622 Directive 2

E.O. 13622 Directive 3

E.O. 13622 Directive 4

E.O. 13622 Directive 4

Agenda

• What is OFAC?• Best practices for compliance• The licensing process• Recent updates: Iran, Cuba, Crimea, and

Ukraine• Useful Resources

OFAC’s Website: www.treasury.gov/ofac

Search the List

Read through the FAQ

See recent actions

Contact Information

OFAC Compliance Division1-202-622-2490 1-800-540-6322OFAC_Feedback@treasury.gov

OFAC Licensing Division1-202-622-2480http://www.treasury.gov/resource-center/sanctions/Pages/licensing.aspx