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

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Page 1: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

Compliance Practices for Exporters

Massachusetts Export Center 2015 Export Expo

December 11, 2015

Frank BoudraOffice of Foreign Assets Control

Page 2: 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

Page 3: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

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

Page 4: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

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.

Page 5: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

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

Page 6: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

Sanctions List Searchwww.treasury.gov/SDN

Page 7: 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

Page 8: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

OFAC Compliance Program

Page 9: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

OFAC Compliance Program

• Risk Assessment• Internal Controls• Testing/Audit• Responsible Individual(s)• Training

Page 10: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

Risk Assessment

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

Internal Controls – Document Review

Page 12: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

Internal Controls – Document Review

Page 13: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

Internal Controls/Due Diligence

Page 14: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

Sanctions ProgramsComprehensive ProgramsSudan, Cuba, Syria, Iran (ITSR and IFSR), Ukraine/Russia-related (Crimea)

Limited ProgramsBurma (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

Page 15: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

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

Page 16: 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

Page 17: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

Iran Highlights

Page 18: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

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

Page 19: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

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.

Page 20: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

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

Page 21: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

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

Page 22: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

Cuba Updates

Page 23: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

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

Page 24: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

Cuba Changes

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

Page 25: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

Crimea

Page 26: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

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

Page 27: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

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

Page 28: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

Ukraine/Russia-related Sanctions(List-based)

Page 29: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

Ukraine-related Sanctions(List-based)

Page 30: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

E.O. 13622 Directive 1

Page 31: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

E.O. 13622Directive 1

Page 32: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

E.O. 13622 Directive 2

Page 33: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

E.O. 13622 Directive 2

Page 34: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

E.O. 13622 Directive 3

Page 35: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

E.O. 13622 Directive 4

Page 36: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

E.O. 13622 Directive 4

Page 37: 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• Useful Resources

Page 38: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

OFAC’s Website: www.treasury.gov/ofac

Search the List

Read through the FAQ

See recent actions

Page 39: Compliance Practices for Exporters Massachusetts Export Center 2015 Export Expo December 11, 2015 Frank Boudra Office of Foreign Assets Control

Contact Information

OFAC Compliance Division1-202-622-2490 [email protected]

OFAC Licensing Division1-202-622-2480http://www.treasury.gov/resource-center/sanctions/Pages/licensing.aspx