by Jasmin Ramsey
Press reports about medical supply shortages in Iran, some of which have described devastating consequences, have been surfacing in the last two years, while debate rages on about who’s responsible — the Iranian government or the sanctions regime. Siamak Namazi, a Dubai-based business consultant and former Public Policy Fellow at the Woodrow Wilson Center for International Scholars, admits the Iranian government shares responsibility but says sanctions are the main culprit. Humanitarian trade may be exempted from the sanctions, says Namazi, but that isn’t enough when the banking valve required to carry out the transactions is being strangled. “[I]f [sanctions advocates] maintain the sanctions regime is fine as it is, then how come they try to promote substitution from China and India?” asks Namazi. The following Q&A with Namazi was conducted in Washington, DC.
Q: You recently authored a policy paper published by the Woodrow Wilson Center where you essentially blame medical shortages in Iran on Western sanctions. How did you reach this conclusion?
Siamak Namazi: We concluded that the Iranian government deserves firm criticism for mismanagement of the crisis, poor allocation of scarce foreign currency resources and failing to crack down on corrupt practices, but the main culprit are the sanctions that regulate financial transactions with Iran. So, while Tehran can and should take further steps to improve the situation, it cannot solve this problem on its own. As sanctions are tightened more and more, things are likely to get worse unless barriers to humanitarian trade are removed through narrow adjustments to the sanctions regime.
My team and I reached these conclusions after interviewing senior officers among pharmaceutical suppliers, namely European and American companies in Dubai, as well as private importers and distributors of medicine in Tehran. We also spoke to a number of international banks. None of us had any financial stake in the pharmaceutical business, whatsoever, and we all worked pro bono. Lies den Rest dieses Beitrags
Deutsche Banken berufen sich auf das nachfolgende Schriftstück/Verordnung (OFAC) der amerikanischen Behörden. In diesem Dokument sehen sie die Begründung ihrer Kontokündigungswelle gegenüber iranischen Staatsbürgern in der Bundesrepublik Deutschland.
As the Government of Iran continues to ignore its international obligations, the U.N. Security Council and governments around the world, including the United States, have implemented a series of steadily tightening sanctions intended to impose consequences on Iran’s leadership for their failure to adhere to their obligations and alter their dangerous course. These sanctions have had a tangible impact on the Government of Iran’s ability to engage in illicit activities, making concrete the costs and isolation that the Government of Iran will continue to face so long as its leadership chooses to ignore their international obligations.
From the start, the United States and its international partners have worked to ensure that these sanctions do not prohibit the delivery of humanitarian assistance and exports of humanitarian goods to Iran. Accordingly, under U.S. law, the sale and export of nearly all types of food and medicine to Iran are broadly authorized, and require no specific license or special authorization from the Department of the Treasury’s Office of Foreign Assets Control (OFAC) or any other agency of the U.S. government. The sale and export of basic medical supplies are likewise broadly authorized. Other types of humanitarian exports may be authorized pursuant to a specific license from OFAC. In such instances, where U.S. persons are either specifically or generally authorized to engage in humanitarian exports to Iran, financial institutions here and abroad are generally permitted under U.S. law to process all financial transactions necessary to facilitate the trade.
Part I of this document provides an overview of current policies with respect to humanitarian assistance and exports to the Iranian people – first, for U.S. persons and financial institutions, and second, for third-country financial institutions. Part II provides additional guidance for the public as to specific procedures for license applications and other relevant guidance.
I. OVERVIEW OF CURRENT U.S. POLICIES
For U.S. persons, including financial institutions:
U.S. persons, including financial institutions, are subject to a number of specific prohibitions regarding dealings with Iran. Nonetheless, OFAC administers U.S. laws and regulations in a way that allows Americans to continue their humanitarian support of the Iranian people without providing support to the Government of Iran. The U.S. Government’s commitment to facilitating humanitarian engagement with the Iranian people is manifest in its longstanding policy to authorize exports or re-
exports of humanitarian goods, such as agricultural commodities, medicine, and medical devices, to Iran. The following policies also demonstrate this commitment:
- Food items, medicines, and medical supplies. OFAC’s general licenses allow for the export or re-export by U.S. persons of certain food items, medicines, and basic medical supplies for Iran without further specific authorization, subject to certain limitations. Financial transactions in support of trade in certain food, medicine, and medical devices from the U.S. (or from a foreign country), may also be conducted without specific OFAC authorization, subject to certain restrictions. For details on these aforementioned restrictions, please refer to section 561.201 of the Iranian Financial Sanctions Regulations, 31 C.F.R. Part 561 (IFSR), and section 560.532 of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560 (ITSR). Donations to the Iranian people (but not the Government of Iran) of food and medicine intended to relieve suffering are exempt from sanctions.
- Transfers of personal remittances to Iran. U.S. sanctions regulations permit U.S. financial institutions to process noncommercial, personal remittances to Iran. These transactions may include a personal transfer of funds from the United States to Iran to assist a family member or friend, provided that the payment is processed through a third-country financial institution before reaching Iran, i.e., not a direct transfer from a U.S. bank to an Iranian bank, which is a prohibited transactions under current U.S. law.
- Favorable licensing policy for certain projects benefitting the people of Iran. OFAC also administers a favorable licensing policy for projects and activities in or related to Iran that are designed to directly benefit the Iranian people in the areas of democracy and human rights and academic and cultural exchange programs. This means that OFAC will interpret its regulations to allow such projects and activities to the greatest extent permitted by U.S. law.
- Expedited application process for certain activities benefitting the people of Iran. OFAC recently adopted an expedited application process for certain categories of U.S. persons, including entities receiving funds from the Department of State to engage in the proposed activity, the Broadcasting Board of Governors, and other appropriate agencies of the U.S. Government, seeking to engage in certain human rights, humanitarian, and democracy-related activities with respect to Iran.
- Disaster Assistance. At times of crisis and tragedy in Iran, the U.S. Government has implemented policies to facilitate expedited humanitarian assistance to Iran. For example, in December 2003, OFAC issued a temporary authorization that allowed U.S. persons to make donations to nongovernmental organizations to aid those affected by the Bam earthquake in Iran. In response to Iran’s recent earthquakes of August 2012, OFAC issued a similar temporary authorization allowing U.S.-based non-governmental organizations to transfer funds related to earthquake relief efforts to or for the benefit of persons in Iran.
For third-country financial institutions:
U.S. policy does not prohibit the involvement of third-country financial institutions in the processing of funds transfers to or from Iran pertaining to authorized or exempt transactions, subject to certain exceptions. For example, OFAC’s general license for the transfer of personal remittances broadly allows third-country banks to handle the transfer of funds to or from Iran, unless certain prohibited partners are involved, such as a financial institution designated under OFAC’s WMD or counter-terrorism authorities. In addition, U.S. sanctions law contains explicit exceptions that allow foreign financial institutions to conduct or facilitate transactions for the sale of agricultural commodities, food, medicine, or medical devices to Iran without penalty, as long as the transaction does not involve a designated entity or otherwise proscribed conduct. Third country institutions may contact OFAC’s Compliance Office at 1-800-540-6322 to clarify sanctions concerns regarding humanitarian transactions with Iran.
II. PROCEDURES FOR LICENSE APPLICATIONS AND OTHER CLARIFYING GUIDANCE
The guidance provided below is intended to assist U.S. persons seeking an OFAC license for humanitarian assistance and related export activities requiring specific license authorization. In addition, it provides guidance for those seeking to determine their eligibility to engage in activities already authorized by general license or that are exempt from sanctions. Further instructions on applying for a specific license from OFAC may be found on OFAC’s FAQ page. Please note that there are no application fees.
Exportation or re-exportation of agricultural commodities, medicine, and medical devices to Iran: As noted above, the exportation or re-exportation to Iran by U.S. persons of most food items, and certain medicine
- and basic medical supplies, are generally authorized and can occur without further specific authorization from OFAC. For the exportation or re-exportation to Iran of agricultural commodities, medicines, and medical devices that do not fall under the general authorizations, OFAC will consider specific license applications on a case-by-case basis. Anyone considering engaging in a transaction involving food, medicine or medical devices is advised to consult sections 560.530 and 560.532 of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560 (the ITSR). [Guidance on how to apply for a TSRA license can be found here.]
Although OFAC regulates exports of agricultural commodities, medicines, and medical devices to Iran, Americans interested in exporting agricultural commodities, medicines, and medical devices to Iran should consult the Department of Commerce’s Bureau of Industry and Security (BIS) to determine commodity classifications for exports in these categories, as only items classified as EAR99 under the Export Administration Regulations are eligible for such exportation.
- Donations of humanitarian articles: Donations of food and medicine by U.S. persons intended to relieve human suffering are exempt from the sanctions on trade between the United States and Iran, provided such donations are not to the Government of Iran, Iranian financial institutions, or any other person whose property and interests in property are blocked. [Additional information on food and medicine donations to Iran can be found here. Please note that donations of humanitarian articles are separate and distinct from the disaster assistance referenced above in Part I.]
- Personal remittances: For information on the transfer by U.S. persons of personal, noncommercial remittances to Iran, please refer to section 560.550 of the ITSR. Personal remittances to Iran may involve those Iranian financial institutions whose property and interests in property are blocked solely pursuant to the ITSR and are not owned or controlled by the Government of Iran. [Additional clarification is also provided on OFAC’s FAQ page.]
- Democracy and human rights in Iran and academic and cultural exchanges: For U.S. persons, information on the specific licensing of projects and activities related to Iran designed to directly benefit the Iranian people in the areas of democracy and human rights in Iran, and academic and cultural exchanges, can be found at section 560.545 of the ITSR.
- Statement of Licensing Procedure in Support of Human Rights-, Humanitarian-, and Democracy-Related Activities with Respect to Iran: This statement contains procedures established pursuant to the Iran Threat Reduction and Syria Human Rights Act of 2012 (TRA), which was signed into law by the President on August 10, 2012. The guidelines of the procedure can be viewed here. [Additional clarification is provided on OFAC’s FAQ page.]
Guidance for U.S. parent companies regarding foreign subsidiaries: Consistent with Section 218 of the TRA, Section 4 of Executive Order (E.O.) 13628 prohibits foreign entities owned or controlled by a United States person from knowingly engaging in any transaction prohibited by the ITSR, E.O. 13599, Section 5 of E.O. 13622, or Section 12 of E.O. 13628, and provides for civil penalties on the U.S. parent or controlling company for any such violations. However, foreign entities owned or controlled by U.S. companies may be eligible to engage in humanitarian assistance and exports to Iran. For further information, please refer to OFAC’s FAQ page.
For further detailed information or guidance, please contact OFAC’s hotline at 800-540-6322 or 202-622-2490.