Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

Agenda What is OFAC? Best practices for compliance The licensing process Recent updates: Iran, Cuba, Crimea, and Ukraine Enforcement Guidelines Useful Resources

What is OFAC? Office of Foreign Assets Control (OFAC) U.S. Department of the Treasury OFAC administers and enforces economic and trade sanctions against targeted: Foreign governments Individuals Entities Practices

Jurisdiction Individuals, located anywhere in the world, doing business in the United States or through U.S. persons Corporations, located anywhere in the world, doing business in the United States or through U.S. persons Transactions: Transactions by foreign persons to the extent that they involve the United States; Transactions in property of a blocked person that comes within the United States; In limited circumstances, transactions involving controlled U.S.-origin goods or technology.

The Specially Designated Nationals (SDN) List OFAC’s prohibited parties list Currently, over 5,800 individuals and entities identified by OFAC Individuals, entities, vessels, banks all over the globe with whom or with which transactions are prohibited UPDATED FREQUENTLY

Sanctions List Search www.treasury.gov/SDN

Agenda What is OFAC? Best practices for compliance The licensing process

OFAC Compliance Program

OFAC Compliance Program Risk Assessment Internal Controls Testing/Audit Responsible Individual(s) Training

Risk Assessment

Internal Controls – Document Review

Internal Controls – Document Review

Internal Controls/Due Diligence

Sanctions Programs Comprehensive Programs Sudan, Cuba, Syria, Iran (ITSR and IFSR), Ukraine/Russia-related (Crimea) Limited Programs Burma (Myanmar), Conflict Diamonds, North Korea, Ukraine/Russia-related (Sectorial Sanctions) List-Based Programs (Activity): Counter-Terrorism, Non-Proliferation, Counter Narcotics Trafficking, Transnational Criminal Organizations, Somali Piracy, Grave Human Rights Abuses Via Information Technology, Foreign Sanctions Evaders (Regime): Balkans, Belarus, Burundi, Cote D’Ivoire, Democratic Republic of the Congo, Iraq, Lebanon, Libya, South Sudan-Related Sanctions, Ukraine/Russia-related, Venezuela-Related Sanctions, Yemen-Related Sanctions, Zimbabwe

OFAC Terminology: Licenses General License Regulatory provision authorizing otherwise prohibited transactions No separate authorization necessary Issued into the regulations or on OFAC’s website Specific License Authorization from OFAC issued to a specific person(s) Allows a specific activity that would otherwise be prohibited

Agenda What is OFAC? Best practices for compliance The licensing process Recent updates: Iran, Cuba, Crimea, and Ukraine

Iran Highlights

Examples: General Licenses* Gifts Patents, Trademarks & Copyrights Household goods Telecommunications and Mail Legal services Personal remittances Official business of certain International Organizations Sale of real property in Iran *Not a comprehensive list and adhering to certain conditions

Exports of Food, Medicine & Medical Devices Regulations allow for the export of food, medicine & medical devices to Iran Must fit the regulation’s definition Must not be destined for certain prohibited parties Anything outside these parameters must be authorized by a specific license.

Applying for a Specific License Important information to remember to include Applicant information Banks Brokers Purchasing agents End-users Shipment terms Payment mechanism http://www.treasury.gov/resource-center/sanctions/Pages/licensing.aspx

Joint Plan of Action (JPOA) Limited, temporary, and reversible sanctions relief in effect from January 20, 2014, to June 30, 2015 Civil aviation safety statement of licensing policy None of the U.S. trade sanctions that prohibit U.S. companies, including their foreign subsidiaries, from engaging in trade with Iran have been altered, other than in the statement of licensing policy relating to civil aviation safety

Cuba Updates

Cuba Changes Travel Travel and Carrier Services Insurance Importation of Goods Telecommunications Consumer Communications Devices Financial services Remittances Third-Country Effects Small Business Growth Cash in Advance Supporting Diplomatic Relations and Official USG Business Support for the Cuban People Gift Parcels Liberalizing License Application Review Policy January 15, 2015

Cuba Changes Travel Travel and Carrier Services Telecommunications Consumer Communications Devices Third-Country Effects Cash in Advance

Crimea

Crimea- E.O. 13685 Prohibits new investment in Crimea Prohibits imports or exports to or from the U.S. to Crimea, directly or indirectly Prohibited facilitation

Crimea- E.O. 13685 General Licenses GL 4: Export or reexport of agricultural commodities, medicine, and medical supplies (including replacement parts) GL 6: Noncommercial, Personal Remittances Authorized GL 7: Operation of Accounts Authorized GL 8: Transactions Related to Telecommunications and Mail Authorized​ GL 9: Exportation of Certain Services and Software Incident to Internet-Based Communications Authorized

Ukraine/Russia-related Sanctions (List-based)

Ukraine-related Sanctions (List-based)

E.O. 13622 Directive 1

E.O. 13622Directive 1

E.O. 13622 Directive 2

E.O. 13622 Directive 2

E.O. 13622 Directive 3

E.O. 13622 Directive 4

E.O. 13622 Directive 4

Agenda What is OFAC? Best practices for compliance The licensing process Recent updates: Iran, Cuba, Crimea, and Ukraine Useful Resources

OFAC’s Website: www.treasury.gov/ofac Search the List Read through the FAQ See recent actions

Contact Information OFAC Compliance Division 1-202-622-2490 1-800-540-6322 OFAC_Feedback@treasury.gov OFAC Licensing Division 1-202-622-2480 http://www.treasury.gov/resource-center/sanctions/Pages/licensing.aspx