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Law360 (April 16, 2020, 9:52 PM EDT) -- The U.S. Treasury Department on Thursday vowed to expedite and prioritize the exportation of medical and safety equipment to Iran, after a bipartisan group of U.S. and European national security leaders called on the Trump administration to ensure sanctions don't interfere with humanitarian aid amid the spread of COVID-19.
In a 10-page fact sheet published by the Treasury Department's Office of Foreign Assets Control, the government offered guidance for humanitarian assistance allowed under sanctions programs in Iran, Venezuela, North Korea, Syria, Cuba and the Crimea region of Ukraine.
The Treasury Department stressed that Americans are allowed to provide sanctioned countries like Iran with medicine, medical devices and other humanitarian goods, including certain respirators, N95 masks, soap, hand sanitizer and certain kinds of ventilators, without OFAC approval.
The fact sheet says OFAC is also prioritizing and expediting its review of COVID-19-related license requests pertaining to restricted equipment like oxygen generators, full face mask respirators and certain decontamination equipment that require additional OFAC approval.
The agency also confirmed that businesses in Iran making medical products for use in Iran will not be considered to be operating in the manufacturing sector of the Iranian economy for purposes of secondary sanctions.
The fact sheet notes, however, that the Federal Emergency Management Agency has barred individuals from exporting certain types of personal protective equipment without explicit FEMA approval through Aug. 10. It also says certain export requests might need additional approval from other U.S. federal agencies.
Doug Jacobson of Jacobson Burton Kelley PLLC told Law360 Thursday that the guidance issued in the fact sheet is mostly not new and the sanction rules aren't what's blocking aid from getting to Iran.
"It was basically just a way to memorialize this and to make clear that there isn't actually anything on the licensing side that's causing the shortfall," he said.
Jacobson, an international trade law attorney, explained that there are medical companies that want to sell devices in Iran, but many large commercial banks in Europe have will not to allow payments to go through in Iran, because the risk of getting hit with fines isn't worth the business.
"That's been a problem," he said. "It's been a problem through the past decade, but that's just an ancillary effect of sanctions."
The guidance comes after two dozen American and European national security leaders, including former U.S. Secretary of State Madeleine Albright, issued a statement through the European Leadership Network and The Iran Project on April 6, urging the U.S. government to ease humanitarian trade restrictions with Iran in light of the pandemic.
Sen. Elizabeth Warren, D-Mass., also sent the U.S. State Department and the Treasury Department a letter on Feb. 28 expressing concerns that risk-averse banks and businesses won't participate in getting Iran the humanitarian relief it needs.
Days later, OFAC issued guidance saying that transactions involving Iran's foreign exchange assets held abroad would not be subject to U.S. sanctions when used to buy humanitarian items.
However, the Trump administration has continued to hit Iran with rounds of sanctions, including one round in late March that blocked five new Iran- and Iraq-based companies and more than a dozen officials and business associates. The U.S. government accused them all of supporting or acting on behalf of terrorist groups.
The recent rounds of sanctions began in January, when the U.S. government imposed a "maximum pressure" campaign against the country and imposed fresh sanctions on its biggest metal producers, as well as on its construction, manufacturing and textile industries, in retaliation for a recent attack on U.S. military sites in the Middle East, which was itself a response to the U.S. killing of Iranian Gen. Qasem Soleimani.
An executive order from President Donald Trump also directed Treasury Secretary Steven Mnuchin to penalize foreign financial institutions that do business with these Iranian industries. The order is intended to curb Iran's nuclear and missile development programs, the Treasury Department said at the time.
--Additional reporting by Amanda James and Hailey Konnath. Editing by Adam LoBelia.
For a reprint of this article, please contact reprints@law360.com.
