On November 2, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) expanded its list of medical supplies approved for export or re-export to Iran. Under a general license issued in 2012, export of basic medical supplies to Iran has been permitted even while Washington tightened economic and financial sanctions to pressure Iran to halt its nuclear program. The United States wanted to avoid impeding Iran’s imports of humanitarian goods. “[F]oreign financial institutions may process transactions for the purchase of humanitarian goods including, food, agricultural commodities, medicine, and medical devices, using funds in Central Bank of Iran accounts without being subject to U.S. sanctions,” according to OFAC. Hundreds of items were added to the list in mid-2013 as well. The following is an excerpt from a Treasury FAQ on the general license with a link to the updated list of approved medical supplies.
General Licenses (GL) for Agricultural Commodities, Medicine, and Medical Devices in the Iranian Transactions and Sanctions Regulations
318. Does the GL for basic medical supplies authorize the export of all medical devices?
No. The GL for basic medical supplies appearing at section 560.530(a)(3)(i) of the Iranian Transactions and Sanctions Regulations (“ITSR”) authorizes the export or reexport to Iran of items defined in section 560.530(a)(3)(ii) of the ITSR and included on the List of Basic Medical Supplies (the “List”), which is maintained on OFAC’s Web site. Any changes to the List will be published in the Federal Register. Over 200 categories of medical supplies are included on the List. Basic medical supplies, as defined in 31 CFR 560.530(a)(3)(ii), also include EAR99-classified components, accessories and optional equipment that are designed for and are for use with an EAR99-classified medical device included on the list, but does not include replacements parts for such devices. [01-20-14]
319. Does the GL for basic medical supplies authorize the export of these items to all entities in Iran?
No. While the GL under section 560.530(a)(3)(i) of the ITSR authorizes exports or reexports to most entities in Iran, it does not authorize exports or reexports to military or law enforcement entities, nor does it authorize exports or reexports to persons whose property and interests in property are blocked under counter-proliferation, counter-terrorism, counter-narcotics, or other authorities administered by OFAC, including such persons identified on OFAC’s Specially Designated Nationals and Blocked Persons List. When engaging in activities pursuant to this GL, exporters and reexporters are expected to undertake due diligence regarding all parties to the transactions, just as they would when acting pursuant to a specific license issued by OFAC. [01-20-14]
361. What items and persons are excluded from the agricultural commodities general license in the Iranian Transactions and Sanctions Regulations?
The specified items excluded from the scope of the agricultural commodities general license are: castor beans, castor bean seeds, certified pathogen-free eggs (unfertilized or fertilized), dried egg albumin, live animals (excluding live cattle), embryos (excluding cattle embryos), Rosary/Jequirity peas, non-food-grade gelatin powder, peptones and their derivatives, super absorbent polymers, western red cedar, and all fertilizers.
The persons excluded from the scope of the agricultural commodities general license are Iranian military or law enforcement purchasers or importers. In addition, the agricultural commodities general license does not authorize any transaction or dealing with any person whose property and interests in property are blocked, or who is designated or otherwise subject to any sanction, under the terrorism, proliferation of weapons of mass destruction, or narcotics trafficking programs administered by OFAC, among others.
Exports or reexports involving the specified items or excluded persons discussed above continue to require the level of review afforded by specific licensing and therefore are not authorized by the agricultural commodities general license. [4-7-2014]
362. Is the export or reexport of non-U.S.-origin agricultural commodities, medicine, or medical devices to Iran authorized?
Yes. The definitions of the terms “agricultural commodities,” “medicine,” and “medical device” used in the relevant general licenses in the Iranian Transactions and Sanctions Regulations include, in the case of items subject to the Export Administration Regulations (EAR), items that are designated as EAR99 and, in the case of items not subject to the EAR, items that would be designated as EAR99 if they were located in the United States. For example, under the agricultural commodities general license, a company located in the United States would be authorized to arrange for the export from a third country to Iran of agricultural commodities produced in the third country if those commodities would be designated as EAR99 if they were located in the United States, provided that all conditions of the general license are otherwise satisfied. [4-7-2014]
363. Is the export or reexport by non-U.S. persons of agricultural commodities, medicine, or medical devices to Iran authorized?
Yes. A non-U.S. person may export or reexport agricultural commodities, medicine, or medical devices to Iran under the relevant general licenses in the Iranian Transactions and Sanctions Regulations, provided that the items are subject to the EAR and all conditions of the relevant general license are otherwise satisfied. For example, a non-U.S. person would be authorized under the medicine and medical supplies general license to arrange for the export or reexport to Iran of EAR99 medicines located in the United States or a third country.
In addition, an entity owned or controlled by a U.S. person and established or maintained outside the United States (a “U.S.-owned or -controlled foreign entity”) may export or reexport agricultural commodities, medicine, and medical devices to Iran under the relevant general licenses in the Iranian Transactions and Sanctions Regulations (including both items subject to the EAR and items not subject to the EAR), provided that all conditions of the relevant general license are otherwise satisfied. For example, a U.S.-owned or -controlled foreign entity would be authorized under the medicine and medical supplies general license to arrange for the reexport to Iran of EAR99 medicines, as well as the export to Iran of medicines not subject to the EAR (e.g., medicines produced outside the U.S. by a non-U.S. person with no controlled U.S. content) that would be designated as EAR99 if they were located in the United States. [4-7-2014]
364. Who can apply for a specific license if an export or reexport to Iran is not authorized by general license?
If an export or reexport is not authorized by general license, any U.S. person, wherever located, or U.S.-owned or -controlled foreign entity may apply for a specific license. For example, a U.S.-owned or controlled foreign entity may apply for a specific license for the export or reexport to Iran of agricultural commodities excluded from the scope of the agricultural commodities general license, such as live animals. [4-7-2014]
365. What is authorized with respect to brokerage services related to exports or reexports of agricultural commodities, medicine, or medical devices to Iran?
U.S. persons continue to be authorized to provide brokerage services on behalf of U.S. persons for the sale and exportation or reexportation by U.S. persons of agricultural commodities, medicine, and medical devices to Iran, provided that the sale and exportation or reexportation itself is authorized by either general or specific license. [4-7-2014]
Click here for the full FAQ.
Click here for the updated list of medical supplies.