Sanctions Compliance Guidance for the Provision of Humanitarian Assistance to Syria

The Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury (USDT) has published a new guidance as regards the provision of humanitarian aid in view of existing sanction regulations and executive orders. The guidance, which primarily consists of frequently asked questions (FAQs), is aimed at supporting firms, organizations, and individuals alike in their assessment as to which specific activities may be undertaken to provide humanitarian aid without violating U.S. law. It follows the recent issuance of the Guidance on Authorized Transactions Related to Earthquake Relief Efforts in Syria and the amendments of various sanction regulations to permit exemptions from sanction provisions to allow the provision of humanitarian aid pursuant to the United Nations Security Council Resolution 2664 (please see EventID 19032, Event ID19033, and EventID 19702 in this context).
Although most FAQs are rather non-relevant for financial market participants, we would like to point out two questions which read as follows:
Question: Can U.S. financial institutions process transactions related to authorized humanitarian assistance by NGOs in Syria?
Answer: Yes. As explained in FAQ 937, U.S. depository institutions, U.S. registered brokers or dealers in securities, and U.S. registered money transmitters can process such transactions and may rely on the statements of their customers that such transactions are authorized unless they know or have reason to know a transaction is not authorized.
Question: Can U.S. banks and money services business (MSBs) process remittances to Syria?
Answer: Yes. U.S. depository institutions, U.S. registered brokers or dealers in securities, and U.S. registered money transmitters are authorized to process noncommercial, personal remittances to Syria, subject to certain conditions. These entities may rely on the statements of their customers that such transactions are authorized unless they know or have reason to know a transaction is not authorized.
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Furthermore, OFAC has updated one related Syrian sanction-related FAQ, namely FAQ 937, which now reads as follows, as quoted:
Question: 937. What does the general license (GL) at § 542.516 of the Syrian Sanctions Regulations (SySR), as amended on November 26, 2021, authorize with respect to nongovernmental organizations (NGOs)?
Answer: The GL at § 542.516 of the SySR continues to authorize, subject to certain limitations, NGOs to engage in certain transactions and activities that would otherwise be prohibited in support of the following not-for-profit activities in Syria:
– Humanitarian projects that meet basic human needs;
– Democracy-building;
– Education;
– Non-commercial development projects directly benefitting the Syrian people; and
– The preservation and protection of cultural heritage sites.
The transactions and activities that NGOs are authorized to engage in include:
– Transactions with persons who meet the definition of the term Government of Syria, as defined in § 542.305(a) (i.e., the state and the Government of the Syrian Arab Republic, as well as any political subdivision, agency, or instrumentality thereof, including the Central Bank of Syria), that would otherwise be prohibited by § 542.201(a)(1);
New investment (i.e., a transaction that constitutes a commitment or contribution of funds or other assets, or a loan or other extension of credit) in Syria that would otherwise be prohibited by § 542.206;
– Exportation or reexportation of services that would otherwise be prohibited by § 542.207; and
– Purchase of refined petroleum products of Syrian origin for use in Syria that would otherwise be prohibited by § 542.209.
– Early-recovery-related transactions and activities that fall within the categories of transactions and activities listed above are authorized. For transactions and activities not otherwise authorized or exempt from sanctions, OFAC considers license requests on a case-by-case basis.
Additionally, this GL authorizes U.S. financial institutions to process transfers of funds in support of the authorized transactions and activities outlined above. U.S. depository institutions, U.S. registered brokers or dealers in securities, and U.S. registered money transmitters may rely on the statements of their customers that such transactions are authorized unless they know or have reason to know a transaction is not authorized. U.S. depository institutions, U.S. registered brokers or dealers in securities, and U.S. registered money transmitters are expected to conduct a level of due diligence commensurate with its overall risk profile and internal compliance policies and procedures with respect to a transaction involving Syria.
Separately, non-U.S. persons, including NGOs and foreign financial institutions, do not risk exposure to U.S. secondary sanctions pursuant to the Caesar Syria Civilian Protection Act of 2019 for engaging in or facilitating transactions and activities that are otherwise authorized or exempt for U.S. persons under the SySR. Please see FAQ 884 for additional information.
Please note that this guidance does not apply to transactions and activities that may be subject to sanctions under other sanctions programs administered by OFAC (e.g., transactions with persons blocked under OFAC’s counterterrorism authority (E.O. 13224, as amended) or OFAC’s Syria-related authority (E.O. 13894)), unless exempt or otherwise authorized by OFAC.