General Licenses for Syria, Iran, and Venezuela Offer a Pathway through Sanctions to Address COVID-19 Relief

July 14, 2021
US Department of Treasury Building

On June 10, 2022 the US Office of Foreign Assets Control (OFAC) issued Syria General License 21A, Venezuela General License 39A, and Iran General License N-1. These General Licenses (GLs) replace and supersede former General Licenses’ released for COVID-19 related transactions in Syria (GL 21), Venezuela (GL 39), and Iran (GL N) due to their expiration date of June 17th, 2022. These new General Licenses are authorized through June 17th, 2023 and mirror the transactions permitted in the former GLs, described in the news alert below.

In Brief

The Office of Foreign Assets Control (OFAC) has issued General Licenses (GLs) to permit charities to carry out certain relief activities related to COVID-19 in Syria, Iran, and Venezuela effective June 17, 2021. Specifically, the licenses allow for cross-border transactions involving the distribution and production of vaccines, face masks, ventilators and oxygen tanks, COVID-19 tests, among other related purposes.

Known as COVID-19 GLs, the licenses exemplify US efforts to review current economic sanctions and mitigate their obstruction of global COVID-19 relief efforts. The impetus arises from a pledge by the current administration to evaluate the unintended consequences of economic sanctions. Sanctions can often harm the general population to a greater extent than the political systems they intend to influence, as is the case amid the COVID-19 pandemic in these three countries. With the COVID-19 GLs in place, the social sector, the private sector, and local governments will be better positioned to effectively combat the pandemic and provide much needed aid.

Syria

The most recent surge in COVID-19 cases in Syria has crippled local hospitals and overwhelmed a healthcare infrastructure already severely weakened by a protracted civil war. As of early April, 19,000 COVID-19 cases and over 1,200 deaths within the two-thirds of Syria under government control have been recorded, likely an underestimate given a deficiency in testing capacity for asymptomatic cases. While Syria has accepted implementation of the COVAX initiative, which would deliver enough vaccines to inoculate 20 percent of its population, Damascus has already seen delays with vaccines promised to arrive in early April 2021, arriving a month late.

For US relief efforts in the country, Syria General License 21 would authorize the export of all services directly related to COVID-19 relief that would have otherwise been prohibited under Syrian Sanctions. The GL would also enable COVID-19 related transactions involving blocked entities pursuant to the US Department of Commerce’s authorization. However, this GL does not permit the exportation or re-exportation (exporting goods which were previously imported, without alteration) of any goods or services to military, technology, intelligence, or law enforcement purchases or imports. GL 21 also prohibits activities listed in the Syrian Sanctions Regulations (SySR), or by any other part of 31 CFR chapter V, statute, or Executive order, or involving any blocked persons not authorized under this GL.

Note: On November 24, 2021, OFAC amended the Syrian Sanctions Regulations (SySR), expanding the authorizations for NGOs to engage in certain transactions and activities: new investment in Syria; the purchase of refined petroleum products of Syrian origin for use in Syria; and certain transactions with elements of the Government of Syria. This includes the exportation or re-exportation of any goods or services to military, technology, intelligence, or law enforcement purchases or imports that were previously prohibited. The NGO general license also authorizes U.S. financial institutions to process transfers of funds in support of the authorized transactions and activities included above.

 

Iran

Now reporting its highest-ever COVID-19 case numbers at 25,000 per day, Iran has become the hardest hit country in the Middle East. Yet, Iranians refer to social distancing as an “unaffordable luxury” due to the need to work under the current economic conditions. The daily death toll has reached 400 while record hospitalizations have climbed to 40,000 and keep rising. Among a population of 85 million citizens, only 500,000 vaccines have been distributed and supplies continue to be limited.

Pursuant to Iran General License N, certain COVID-19 related activities that would have otherwise been prohibited by the Iranian Transactions and Sanctions Regulations (ITSR) are now authorized. These activities include the exportation of goods or technology related to the prevention, diagnosis, and treatment of COVID-19 to Iran, to its government, or to third party countries that are working in Iran or with its government. The exportation and importation of services to Iran or the Government of Iran, and the importation into the United States are also permitted when in direct relation to COVID-19 activities, including research. In addition, certain transactions involving the Central Bank of Iran (CBI) and the National Iranian Oil Company (NIOC) are now authorized, along with specific financial transactions that were prohibited under the ITSR.

However, this GL does not allow for the exportation or re-exportation of goods or technology to CBI, NIOC, or any entity in which NIOC owns, directly or indirectly, a 50 percent or greater interest. This GL also prohibits the exportation or re-exportation of any goods, technology, or services to military, intelligence, or law enforcement purchasers or importers.

 

Venezuela

Deeply immersed within the crisis, South America has recorded some of the highest COVID-19 mortality rates of any continent. In the case of Venezuela, its healthcare system was already struggling prior to the pandemic and the Venzuelan National Academy of Medicine estimates that at current vaccination rates, it will take a full decade to inoculate the population.

Venezuelan General License 39 has authorized all transactions and activities related to the prevention, diagnosis, and treatment of COVID-19 through June 17, 2022. The GL also permits COVID-19 related transactions involving certain banks (see “Venezuela Sanctions Regulations 31 CFR part 591 GENERAL LICENSE NO. 39” on OFAC’s website for a list of authorized banks). Similar to Iran and Syria, the GL does not authorize the exportation or reexportation of any goods, technology, or services to military, intelligence, or law enforcement purchasers or importers, nor does it allow any transactions involving Banco de Desarrollo Economico y Social de Venezuela (BANDES), Banco Bandes Uruguay S.A. (Bandes Uruguay), or Petróleos de Venezuela, S.A. (PdVSA), or an entity in which any of the aforementioned three owns a 50 percent or greater interest.

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