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More Syria Sanctions Clarifications

October 5, 2011 It's no wonder everything is so delayed over at the Treasury Annex building these days, it seems that the The United States Department of the Treasury Office of Foreign Assets Control (OFAC) is exerting most of their energy dealing with the latest rounds of Syria sanctions. In recent months, OFAC has issued fourteen (14) general licenses to address authorizations of otherwise prohibited activity under the new Syria sanctions regime. To provide even further clarification on what is and what is not allowed, OFAC issued a series of frequently asked questions and answers (FAQ) yesterday. In their FAQ, OFAC addressed issues related to travel related transactions, the definitions of the terms "items" and "de minimis", exports of food and medicine, and personal remittances. In regards to travel related remittances OFAC confirmed that U.S. persons are not prohibited from engaging in transactions ordinarily incident to travel to or from any country. This means that there are also no prohibitions on the importation of accompanied baggage for personal use, maintenance within any country including payment of living expenses and acquisition of goods or services for personal use, or arrangement or facilitation of travel. This is no surprise and is in line with the travel exemption found in the International Emergency Economic Powers Act. As for the definitions of "items" and "de minimis", OFAC stated that "items" means commodities, software, and technology and that "de minimis" has the same definition as that found in the Export Administration Regulations (EAR), 15 C.F.R. 734.4. For those of you familiar with the EAR you will know that this definition is incredibly unwieldy. Here is the general idea in relation to Syria, if a foreign commodity is composed of 10% of less U.S. origin controlled articles, then its U.S. content is considered "de minimis". This is a major generalization of the definition, however, and those require a clear understanding should seek experienced counsel to derive a better understanding of how that definition could impact your exports. Furthermore, OFAC clarified that the export or reexport of food or medicine subject to the EAR to the Government of Syria, other than medicine on the Commerce Control List (CCL) that has not been licensed by The United States Department of Commerce Bureau of Industry and Security (BIS) for export or reexport to Syria, does not require a specific license from OFAC. IF BIS has licensed CCL medicine to Syria then no further OFAC license is required. Finally, OFAC clarified that Syria General License No. 6 allows the transfer of noncommercial, personal remittances to or from Syria for or on behalf of an individual ordinarily resident in Syria. This authorization applies, so long as the funds transfer does not involve any

blocked parties, for example, the Commercial Bank of Syria or the Syrian-Lebanese Commercial Bank. These new sanctions on Syria seem to be OFAC's core focus these days. It will remain to be seen if we see any more changes or clarifications to the Syrian sanctions program, however, I believe these FAQs might be indicate that OFAC is winding its shaping of the sanctions program and is now just clarifying certain aspects of it. Regardless, the flurry of activity around this particular sanctions program may indicate that OFAC believes it is here to say for some time. The author of this article is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.