|Tuesday, 18 October 2011 00:00|
by Jason Poblete
The Department of the Treasury, Office of Foreign Assets Control (OFAC), has amended the Iran and Sudan sanctions regulations to allow food to be exported and re-exported to these countries under a general license.
According to the final rule published by OFAC on October 12, 2011, "food" is defined as "items that are intended to be consumed by and provide nutrition to humans or animals in Sudan or Iran — including vitamins and minerals, food additives and supplements, and bottled drinking water — and seeds that germinate into items that are intended to be consumed by and provide nutrition to humans or animals in Sudan or Iran. The definitions also specify that food does not include alcoholic beverages, cigarettes, gum, or fertilizer."
Prior to this change, under the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), these types of food exports required exporters subject to U.S. laws and regulations to apply for a specific OFAC license that was valid for one year.
In a summer edition of the Stars and Stripes newspaper, there is an article detailing recently published guidelines for U.S. troops stationed the Middle East during the Muslim holy month of Ramadan. "Troops in Mideast given guidance on Ramadan," discuses how troops were instructed to respect local customs by, among other things, no drinking alcholic beverages as well as no chewing gum or smoking in public. When we read the new regulations, we found curious the exclusion of alcoholic beverages, cigarettes, and gum.
The new regulation definitions specify that food does not include alcoholic beverages, cigarettes, gum, or fertilizer." Fertilizer seem logical because, in nefarious hands, many types of fertilizers can used to do bad things. But we could not find a legal or policy reason for excluding alcohol, gum, and cigarettes. We know what you are likely thinking, is this an effort by OFAC at Sharia-proofing our sanctions programs? We do not think so, but it is a curious grouping of items that we see every now and then in the trade arena.
For example, the U.S.-Singapore Free Trade Agreement that went into effect in 1992, and revised several times thereafter, at one point banned the import of chewing gum to Singapore because the country was having problems with gum chewers sticking used gum in places other than waste receptacles. This resulted in a lobbying effort by U.S. confectioners that, ultimately, allowed for the export of gum to Singapre having "therapuetic value."
We asked around about the Iran alcohol, cigarette, and gum exclusion in the new regulations and, you guessed it, no one has any idea why it was included. We've just chalked it up to one of those many unknown unkowns that make up U.S. export controls and sanctions programs (and give lawyers who advise clients in this arena something more to speculate about).
You can dowload the Federal Register notice here.