Fulbright Briefing - OFAC Issues New General Licenses Authorizing Additional Transactions Under the Libyan and Syrian Sanctions Orders

By: Stephen M. McNabb, Marsha Z. Gerber, Stefan Reisinger and Mary Beth Balhoff

On September 9, 2011, the U.S. Department of Treasury's Office of Foreign Assets Control ("OFAC") issued new general licenses authorizing additional transactions under both the Libyan and Syrian sanctions orders which are discussed in turn below.

General Licenses Authorizing Certain Transactions in Libya

Continuing OFAC's policy of reducing the sanctions imposed on Libya under Executive Order 13566 as the Transitional National Council ("TNC") forces consolidate control over Libya, OFAC issued General License No. 7 on September 9, 2011. General License No. 7 authorizes U.S. persons to engage in transactions involving entities owned or controlled by the Libyan National Oil Corporation ("NOC") that had previously been prohibited without a specific license under Executive Order 13566.

Specifically, General License No. 7 authorizes "[a]ll transactions involving entities owned or controlled by the [NOC] with the exception of Zueitina Oil Company (the "authorized NOC subsidiaries")." Significantly, General License No. 7 does not authorize transactions that involve the "Libyan National Oil Company itself or any persons whose property and interests in property are blocked other than the authorized NOC subsidiaries." The authorization includes, but is not limited to, the following NOC subsidiaries:

  • Arabian Gulf Oil Company
  • Azzawiya Oil Refining Company
  • Brega Petroleum Marketing Company
  • Harouge Oil Operations
  • Jamahiriya Oil Well Fluids and Equipment
  • Libya Oil
  • Mediterranean Oil Services Company
  • Mediterranean Oil Services GmbH
  • National Oil Fields and Terminals Catering Company
  • North African Geophysical Exploration Company
  • National Oil Wells Drilling and Workover Company
  • Oilinvest Netherlands B.V.
  • Ras Lanuf Oil and Gas Processing Company
  • Sirte Oil Company for Production Manufacturing of Oil and Gas
  • Tamoil Group
  • Waha Oil Company

This approval supplements General License No. 6, issued on August 19, 2011, which authorized transactions with the Transitional National Council of Libya.

U.S. companies seeking to conduct business with NOC subsidiaries should now be able to do so, provided their transactions fall within the confines of General License No. 7 or prior authorization is first obtained from OFAC.

General Licenses Authorizing Certain Transactions in Syria

On September 9, 2011, OFAC also issued general licenses 7-10 authorizing additional transactions in Syria that were previously prohibited when Executive Order 13582 was issued on August 17, 2011.

General License No. 7 authorizes transactions through November 25, 2011, that are "ordinarily incident and necessary" to the winding down of contracts or other agreements that were in effect prior to August 18, 2011, and that involved the exportation of services to the Government of Syria.

General License No. 7 also authorizes transactions through November 25, 2011, that are "ordinarily incident and necessary" to the winding down or divestiture or transfer to a foreign person of a U.S. person's share of ownership, including an equity interest, in investments in Syria that were made prior to August 18, 2011.

However, General License No. 7 does not authorize any transactions with a person, other than the Government of Syria, whose property and interests are blocked or any debit to a blocked account.

General License No. 8 authorizes, subject to other U.S. export requirements such as those imposed under the Export Administration Regulations, all transactions and activities in Syria related to the conduct of the official business of the United Nations, its Specialized Agencies, Programmes, and Funds (including UNESCO, WHO, IMF, UNHCR, UNICEF and WFP) provided they do not involve a debit to any blocked account and certain limited procedural requirements are met.

General License No. 9 authorizes U.S. persons residing in Syria to pay their personal living expenses in Syria and to engage in other transactions, including with the Government of Syria, otherwise prohibited by Executive Order 13582, that are "ordinarily incident and necessary to their personal maintenance within Syria" provided they do not involve a debit to a blocked account or involve any blocked entities. General License No. 9 does not authorize transactions or services ordinarily incident to operating or supporting a business in Syria, employment in Syria or any new investment in Syria.

General License No. 10 authorizes the operation of an account in a U.S. financial institution for non-blocked individuals in Syria but only so long as transactions processed through the account are of a personal nature and not for use in supporting or operating a business and do not involve transfers directly or indirectly to Syria or for the benefit of individuals in Syria (unless otherwise authorized under General License No. 6).

Fulbright's International Trade Practice attorneys will continue to monitor developments in Libya and Syria closely and will issue additional updates as appropriate.

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