OFAC issues new general licenses allowing limited work with the Taliban
On September 24, 2021, the Treasury Department’s Office of Foreign Assets Control (OFAC) issued General Licenses 14 and 15 and related FAQs, which authorize the provision of humanitarian aid and the export of agricultural products, drugs and medical supplies to Afghanistan. These new blanket licenses specifically authorize transactions involving the Taliban and the Haqqani Network, and entities more than 50% owned by these parties, on condition that transactions with these parties are “generally incidental and necessary” to the provision of the goods and assistance specifically listed in the licenses. For practical purposes, this means that financial transfers can be made to the Taliban and Haqqani network, or their owned entities, alone to pay taxes, fees and import duties, or for permits, licenses and utilities, in connection with the activities described in general licenses. All other transactions remain prohibited.
Those seeking to provide humanitarian goods and services to Afghanistan must exercise due diligence to ensure that (i) all parties involved in the transaction – from start to finish – are identified, including their ownership, (ii) the proposed transaction falls within the limited scope of activities authorized by the General Licenses, and (iii) any payment to the Taliban and the Haqqani Network, and their owned entities, is incidental and necessary to the authorized activity. .
New general licenses
General license n ° 14 authorizes transactions involving the Taliban and the Haqqani Network, and their 50% or more owned entities, when transactions [i] are “ordinarily incidental and necessary to”, [ii] the provision of “humanitarian assistance to Afghanistan or other activities which meet basic human needs in Afghanistan”, [iii] for some specified entities.
As noted above, payments to the Taliban and the Haqqani Network, and their detained entities, will be considered “ordinarily incidental and necessary” to the humanitarian assistance described, only if payments are for taxes, fees, import duties, permits, licenses or utilities.
“[H]humanitarian assistance to Afghanistan or other activities that support basic human needs in Afghanistan ”is defined by FAQ 929 to include:
[T]The provision of emergency services related to natural and man-made disasters, the provision of health care and health-related services, protection and assistance to vulnerable or displaced populations, etc., the operation of orphanages, the distribution of items (such as food, clothing and medicine) intended to alleviate human suffering in Afghanistan, and training or other services related to any of the above activities. Other activities that support basic human needs include activities to support non-commercial development projects in Afghanistan that primarily benefit poor or at-risk populations or otherwise alleviate human suffering, including activities related to humanitarian aid. housing and settlement, food security, livelihood support, water, sanitation, health, hygiene and assistance related to COVID-19, among others, and training or d ‘other services related to any of the above activities.
General License 14 only authorizes such humanitarian assistance when provided by the following entities and “their employees, beneficiaries, contractors or other persons acting on their behalf”:
The government of the United States;
The United Nations, including its programs, funds and other entities and organs, as well as its specialized agencies and related organizations;
The International Center for Settlement of Investment Disputes (ICSID) and the Multilateral Investment Guarantee Agency (MIGA);
The African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development and the Inter-American Development Bank Group (IDB Group), including any fund entity administered or established by one of the aforementioned entities;
The International Committee of the Red Cross and the International Federation of Red Cross and Red Crescent Societies; and
The Islamic Development Bank.
Thus, assistance cannot be provided by any other entity, even if it is otherwise qualified as “humanitarian assistance” under the General License 14.
General license n ° 15 authorizes transactions involving the Taliban and the Haqqani Network, and their 50% or more owned entities, when transactions [i] are “ordinarily incidental and necessary to”, [ii] the export or re-export of ‘agricultural products, medicines, medical devices, spare parts and components for medical devices or updates of software for medical devices to Afghanistan, or to persons in third countries purchasing specifically for the resale in Afghanistan ”.
Again, payments that are “generally incidental and necessary to” such a transaction are limited to payments of taxes, royalties, import duties, permits, licenses or utilities.
The other key terms of General License 15 have the following definitions:
“Agricultural products” include products that fall under the term “agricultural product” as defined in Article 102 of the Agricultural Trade Law of 1978, and which are intended for end use in Afghanistan as: (A) food for humans (including raw, processed and packaged foods; live animals; vitamins and minerals; food additives or supplements; and bottled potable water) or animals (including food animals); (B) seeds for food crops; (C) fertilizers or organic fertilizers; or (D) reproductive material (such as live animals, fertilized eggs, embryos and semen) for the production of food animals.
“Medication” [f]or the subject matter of this general license… is anything that falls within the definition of “drug” in section 201 of the Federal Food, Drug, and Cosmetic Act (21 USC 321).
“Medical equipement” [f]or the subject matter of this general license… is an item that falls within the definition of “device” in Section 201 of the Federal Food, Drug, and Cosmetic Act (21 USC 321).
General License 15, unlike General License 14, is not limited to transactions involving specific identified parties.
FAQ. In addition to FAQ 929 mentioned above, OFAC has published three other FAQs to clarify general licenses: FAQ 928, FAQ 930 and FAQ 931. Note that FAQ 931 clarifies that Non-American Parties may facilitate or engage in transactions that would be permitted to US persons under these general licenses without risking secondary penalties. Likewise, foreign financial institutions do not face penalties on correspondent and transit accounts if they engage in or facilitate transactions that would be permitted for a US person under general licenses. However, non-U.S. Parties should be careful to verify that they are not prohibited from carrying out such transactions by non-U.S. Export controls and sanctions.
Take away food
Parties subject to OFAC sanctions providing or seeking to provide humanitarian assistance or to export or re-export agricultural products, drugs or medical devices to organizations and individuals in Afghanistan should carefully review and review general licenses 14 and 15 and the four FAQs. In particular, the parties should verify that any provision of humanitarian aid, export or re-export falls within the scope of the general licenses and also verify that any humanitarian aid, export or re-export does not result in financial transfers to the Taliban. , to the Haqqani network, or one of their majority-owned entities, unless they are ancillary and necessary for the authorized activity. Without local knowledge, it can be difficult to identify the affiliation or ownership of individuals or entities in Afghanistan.
Parties should also consider the overall risk of providing assistance to organizations and individuals in Afghanistan and take appropriate measures to mitigate such risk.