Financial Crime World

Title: OFAC Expands Financial Compliance Opportunities for Humanitarian NGOs in Syria

US Treasury Department’s OFAC Announces New Rule for Humanitarian Activities in Syria

On November 26, 2021, the US Treasury Department’s Office of Foreign Assets Control (OFAC) finalized a new rule expanding the existing general license for humanitarian activities in Syria. This expansion, referred to as the “Amended General License,” now empowers Nongovernmental Organizations (NGOs) to engage in investment activities that support approved not-for-profit initiatives in the Syrian Arab Republic (SAR) [1].

Key Developments for NGOs under the Amended General License

  1. Previously restricted transactions with the Government of Syria:

    • NGOs can now deal with entities defined as the Government of Syria (including political subdivisions, agencies, or instrumentalities) to support approved humanitarian initiatives in the Syrian Arab Republic.

  2. New investment opportunities:

    • NGOs can make new investments in Syria, such as commitments or contributions of funds or assets, or extend credits for the same purpose.

  3. Purchasing refined petroleum products:

    • NGOs may purchase refined petroleum products of Syrian origin for use within the SAR.

Impact on US Financial Institutions and Other Entities

With this expansion, US financial institutions can process transactions related to the above activities without the fear of US secondary sanctions or violation of Syrian Sanctions Regulations [2]. This change also permits foreign financial institutions and qualified NGOs to engage in activities authorized under the Syrian Sanctions Regulations without exposure to US sanctions.

For a more comprehensive understanding of the Amended General License, OFAC has published new Syria-related Frequently Asked Questions (FAQs) numbers 937 and 938 [3].

Expert Advice on Financial Compliance and Sanctions

Baker McKenzie, a global law firm, has partners with expertise in financial compliance. Terrence (Terry) Gilroy, a partner at Baker McKenzie, advises businesses and individuals on issues surrounding white collar crimes, anticorruption statutes, and economic sanctions. Prior to joining the firm in 2018, he led the Financial Crime Legal function for Barclays in the Americas [4].

Authors’ Background and Expertise

The authors of this article, Lise S. Test and Andrea Tovar, have extensive experience in licensing, regulatory interpretations, enforcement actions, internal investigations, and compliance program design. They also specialize in the extra-territorial application of trade compliance-related regulations in cross-border transactions [5].