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856. How will transactions related to Iran’s participation in legal proceedings, including administrative, judicial, arbitral proceedings, and proceedings before international courts and tribunals, be treated for purposes of secondary sanctions to the extent that Iranian financial institutions or the Iranian financial sector sanctioned under Executive Order (E.O.) 13902 are involved?

Answer

Transactions and activities involving Iranian financial institutions blocked under E.O. 13902 remain authorized under General License (GL) L to the extent they are authorized, exempt, or otherwise not prohibited by the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR). This authorization includes certain transactions and activities relating to the initiation and conduct of legal proceedings authorized or otherwise permitted pursuant to section 560.510 or 560.525 of the ITSR, such as transactions or activities related to the defense of individuals in legal proceedings in Iran brought by the Government of Iran, including any arrest, investigation, prosecution, or detention. Such permissible transactions and activities may include reasonable and customary payments for the provision of legal services, bail and/or bond payments, judicial costs and fees, costs for the production of documents and appearances of witnesses, and payment of experts.  

In addition, for purposes of secondary sanctions, as described in FAQ 844, non-U.S. persons are not exposed to sanctions for engaging in transactions and activities involving the Iranian financial sector or an Iranian FI blocked pursuant to E.O. 13902 that would be authorized for U.S. persons under GL L.  

Please note that, unless permitted by GL L and FAQ 844, payments made to Iran involving blocked Iranian persons — including the Government of Iran, including any political subdivision, agency, or instrumentality thereof — in connection with awards, orders, decisions, or settlement of claims may be subject to sanctions. OFAC will assess such transactions on a case-by-case basis.

Please also note that guidance above applies only with respect to transactions or activities involving Iranian FIs sanctioned solely pursuant to E.O. 13599 and E.O. 13902 or the Iranian financial sector.  These transactions and activities should not involve persons designated on OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List) in connection with Iran’s support for international terrorism or proliferation of weapons of mass destruction (WMD) unless exempt or otherwise permitted. 

Date Released
December 7, 2020