News 06 March 2020

OFAC licence authorises some humanitarian transactions with Iran’s Central Bank

The US Treasury’s Office of Foreign Assets Control (‘OFAC’) has issued a licence authorising certain transactions for humanitarian goods or services with the Central Bank of Iran (‘CBI’).

General License No. 8, together with a humanitarian channel to Iran that the United States has set up in cooperation with the Swiss government, is intended to facilitate transfers, transactions and some activities connected to the export and re-export of medicines, agricultural commodities and related equipment, including software.

The licence authorises certain payments, financing and brokering for exports and re-exports of medicines, agricultural commodities and related equipment and devices.

The authorisations coincided with a 27 February announcement that the US and Switzerland had finalised the terms of the Swiss Humanitarian Trade Arrangement (‘SHTA’), which, the Treasury Department said, ‘is now fully operational.’

‘While the United States maintains broad exceptions and authorizations for the conduct of humanitarian trade with Iran, the SHTA presents a voluntary option for facilitating payment for exports of agricultural commodities, food, medicine, and medical devices to Iran in a manner that ensures the upmost transparency,’ the Treasury Department said.

‘Under the SHTA, participating financial institutions commit to conducting enhanced due diligence to ensure that humanitarian goods reach the people of Iran and are not misused by the Iranian regime,’ it added. ‘Parties may continue to avail themselves of existing exceptions and authorizations to conduct humanitarian trade with Iran outside of the humanitarian channel.’

The US and Swiss moves come amid the global Coronavirus outbreak which has hit Iran hard, but the Treasury Department statements made no mention of the disease.

Iran, which is suffering from severe shortages of medicines, food and other commodities under US sanctions that were tightened to their toughest in January, has, along with Italy, the largest outbreak of the Covid-19 virus outside of China, with the death toll on Wednesday reported at about 100 and nearly 3,000 people infected, including several senior government officials.