Financial Sanctions Compliance in Palestinian Territory, Occupied: What You Need to Know
Introduction
As a result of recent elections, representatives of Hamas have taken control of the Palestinian Authority (PA), leading to important changes in financial sanctions compliance. It is crucial for US persons and organizations to understand their obligations and take necessary steps to ensure compliance.
Blocking Property and Interests of Hamas
The Office of Foreign Assets Control (OFAC) has determined that as a result of these elections, Hamas has a property interest in the transactions of the Palestinian Authority. This means it is illegal for US persons to engage in transactions with the PA without authorization.
Exceptions to the Rule
However, there are exceptions to this rule:
- OFAC has issued general licenses authorizing certain transactions with the Palestinian Authority, including General License No. 4, which allows for transactions involving the Palestine Investment Fund (PIF).
- Private companies and individuals can continue to deal with each other as long as the PA does not have a majority interest in the company or business.
- Local governments and municipalities are not part of the Palestinian Authority, but some may be subject to sanctions.
Requirements for Financial Institutions
Financial institutions must know that any transactions involving parts of the Palestinian Authority not listed on the “White List” require a specific license from OFAC. Absent such a license, these transactions must be blocked.
Specific Licenses for US Firms
US firms selling goods and services to Palestinian universities may need specific licenses. While many universities are private and not subject to sanctions, some may be. These licenses can be obtained on a case-by-case basis under certain limited situations and conditions.
How to Apply for a License
To apply for a license, you must include all necessary information as required in the application guidelines or regulations pertaining to the particular embargo program. The mailing address for license applications is:
Office of Foreign Assets Control, U.S. Department of the Treasury 1500 Pennsylvania Avenue, NW, Washington, DC 20220
You can also check the status of your pending license application by contacting the Licensing Division at (202) 622-2480 or the Compliance Division at (202) 622-2490.
Other Agencies Involved
Other agencies review OFAC license applications, including:
- U.S. Department of State
- U.S. Department of Commerce
- Other government agencies
These agencies may have different requirements and regulations that must be complied with.
Conclusion
Financial sanctions compliance in Palestinian Territory, occupied is a complex issue that requires careful consideration and adherence to specific regulations. Failure to comply can result in serious legal consequences. It is essential for all parties involved to understand their obligations and take the necessary steps to ensure compliance.