New OFAC Syrian Executive Order – What it really means to business (Part II)

On August 18th 2011 OFAC simultaneously issued Executive Order 13582 Blocking Property of the Government of Syria and Prohibiting Certain Transactions with Respect to Syria and six General Licenses allowing specific Syrian transactions.   Over the last 40 days, eight more General Licenses were issued amounting to fourteen General Licenses in total.  Today’s post concerns Licenses one through six.

They are:

1.      Syrian Diplomatic Missions in the United States

As long as the transaction is not otherwise prohibited, in the U.S. goods or services may be provided to the diplomatic missions of the Government of Syria to the U.S. and to the United Nations as well as to their employees.  However, the provision must be for the conduct of official business or for personal use of the employees of the missions and cannot be for resale.  Provisions to the missions may not involve the purchase, sale, financing, or refinancing of real property.

2.      Authorizing lawyers to provide legal services but a specific license is requires to receive payment of fees and reimbursement of expenses. Services that are allowed include:

  • legal advice and counsel on the requirements of and compliance with U.S. law
  • representation of the Government of Syria in U.S. proceedings
  • initiation and performance of proceedings before a U.S. court or agency,
  • representation of the Government of Syria or other persons before a U.S. court or agency with respect to Syrian sanctions

3.      Entries in Certain Accounts for Normal Service Charges Authorized with Respect to Syria

U.S. financial institutions are authorized to debit accounts that they hold that have been blocked pursuant to certain Executive Orders for payment or reimbursement of “normal service charges” owed by the account owner.  For an explanation of what constitutes “normal service charges” please see part “b” of this License.

4.     Exportation or Reexportation to Syria of Items Subject to the Export Administration Regulations and Related Services:

Department of Commerce licensed or otherwise authorized exportations or reexportations of commodities, software, and technology (items) to the Government of Syria or other blocked parties are authorized. This includes transactions and services ordinarily incident to such actions and services to install, replace, and repair such items.  This license does not include a debit to a blocked   account.

5.      Exportation of Certain Services Incident to Internet-Based Communications Authorized

The exportation of services incident to the exchange of personal communications over the internet available at no cost to the user from the U.S. or by U.S. persons to persons in Syria is authorized.  This includes:

  • instant messaging,
  • chat and email,
  • social networking,
  • sharing of photos and movies,
  • web browsing, and
  • blogging

This does not authorize the direct or indirect exportation of:

  • services with knowledge or reason to know to the Government of Syria or a blocked party,
  • internet connectivity services or telecommunication transmission facilities,
  • webhosting services not used for personal communications,
  • domain name registration services, and
  • items to Syria

OFAC may issue Specific Licenses for other services on a case-by-case basis.

6.      Noncommercial, Personal Remittances Authorized

The transfer of funds to or from Syria or on behalf of an individual ordinarily resident in Syria is authorized if the transfer involves a noncommercial, personal remittance.  Such transfers do not include charitable donations or funds benefiting an entity or funds used to support or operate a business.  The transfer may not be by, to, or through the Government of Syria or a blocked party.

Syrian EB5 Visa Issues

According to OFAC, Syrian EB-5 visa transactions including the transfer of money to the U.S. for investment purposes do not fall under General License No. 2 authorizing certain legal services or General License No. 6 allowing for non-commercial personal remittances.  Under the new regulations, OFAC views such Syrian EB-5 transactions as prohibited services.  Therefore, a regional center will need a Specific License to provide services. Additionally, an immigration lawyer can provide services under the General Exception; however, he/she will need a Specific License to accept funds/payment for such services from Syria. In considering whether a transaction is permissible and eligible for a Specific License OFAC reviews transactional details including who the funds are coming from, where the funds are coming from, and where the funds are going.

In addition to the acquisition of a Specific License, all parties involved in an EB-5 visa transfer including banks, private entities, and businesses through which the money was earned must be screened to ensure no blocked parties are investing.