US: OFAC issues new Syria General License and new and amended FAQs
On May 12, 2022, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC“) issued Syria General License No. 22 (“GL 22“), authorizing certain activities in particular sectors of the Syrian economy that are otherwise prohibited under the Syrian Sanctions Regulations (31 CFR Part 542, “RSS“) in specific areas of Syria not controlled by the Assad regime. According to the U.S. Department of Disclosures Press release, GL 22 was released in support of the Biden administration’s strategy to defeat ISIS by promoting economic stabilization in areas previously controlled by ISIS. OFAC has also released new and amended frequently asked questions (“FAQs“) regarding the purpose and scope of GL 22. Please find below a summary of these developments.
GL 22 authorizes transactions that are “usually incidental and necessary” to activities in the following economic sectors in the northeast and northwest regions of Syria identified in the annex to GL 22:
- information and telecommunications;
- power grid infrastructure;
- clean energy;
- transport and storage;
- water and waste management;
- health services;
- manufacturing; and
- commerce (collectively, the “Authorized Sectors”).
In addition, GL 22 also includes authorization to purchase refined petroleum products of Syrian origin for use in Syria, as long as such transactions are usually incidental and necessary to give effect to activities in authorized sectors.
FAQ 1043 provides an illustrative list of activities authorized by GL 22.
- GL 22 made not remove or modify any sanctions imposed on the Assad regime or remove prohibitions on dealing with the Syrian government (see FAQ 1042).
- The areas in northeast and northwest Syria in which activities are permitted are defined in the annex to GL 22 (see also FAQ 1045).
- Financial institutions and funds transfer companies registered in the United States may process funds transfers on behalf of third country entities in support of activities in the sectors permitted under GL 22 based on compliance of the initiator of the transfer and on information obtained in the course of their ordinary activity, unless there is reason to suspect that the transfer is not authorized by GL 22 (see FAQ 1044).
- Non-U.S. Persons will not be subject to secondary sanctions risk for engaging in or facilitating activities permitted under GL 22 or transactions that are ordinarily incidental and necessary to give effect to activities permitted by GL 22. ( See FAQ 1043 and the change FAQ 884.)