Frequently Asked Questions

263. Who can receive payments from funds credited to a RECIPIENT ACCOUNT or SPECIAL PURPOSE ACCOUNT?

263 … In order for the National Defense Authorization Act's ( NDAA ) significant reduction exception to apply on or after February 6, 2013, the person receiving payment (e.g., the manufacturer or service provider) for goods or services being exported to Iran must be – (i) a citizen, national, or… Read more

264. Can funds be remitted to Iran or the Government of Iran (GOI) without exposure to sanctions?

264 … No. If funds from the RECIPIENT ACCOUNT or the SPECIAL PURPOSE ACCOUNT are remitted, directly or indirectly, to Iran, or paid to any person that is the GOI , the FFI would be exposed to sanctions. … Can funds be remitted to Iran or the Government of Iran (GOI) without exposure to …

265. Can the funds be used for sales made under the Humanitarian Exception?

265 … The National Defense Authorization Act of Fiscal Year 2012 (NDAA) generally exempts from sanctions sales made under the Humanitarian Exception (i.e., the sale of agricultural commodities, food, medicine, or medical devices from third countries to Iran). Funds deposited in the RECIPIENT… Read more

314. Can an exporter of agricultural commodities, food, medicine, or medical devices get paid out of a Central Bank of Iran (CBI) account at a foreign financial institution (FFI) in a country with a significant reduction exception, even though the exporter is located in a third-country? Can the third-country exporter’s bank handle this transaction?

314 … Yes. So long as the transaction does not involve a designated individual or entity, banks on the Part 561 List located on OFAC’s website, or otherwise proscribed conduct, such transactions are not sanctionable under U.S. law. Furthermore, there is no requirement under U.S. law that… Read more

177. If the Central Bank of Iran (CBI) is involved in providing settlement services for a transaction, or is otherwise acting solely as an intermediary in a transaction between a non-designated Iranian bank and a foreign financial institution, is the foreign financial institution deemed to be engaging in a transaction with the CBI?

177 … Section 1245 targets any significant transactions “with” the CBI; a transaction involving the CBI in an intermediary role would likely be viewed as a transaction “with” the CBI. … If the Central Bank of Iran (CBI) is involved in providing settlement services for a transaction, or is otherwise… Read more

178. Are barter trades involving the Central Bank of Iran (CBI) considered “financial transactions” under Section 1245?

178 … If a transfer involves a financial institution it would likely be considered a financial transaction . … Are barter trades involving the Central Bank of Iran (CBI) considered “financial transactions” under Section …

338. With respect to the authorizations in 31 CFR § 560.540(a)(1) and (a)(2) of the Iranian Transactions and Sanctions Regulations (ITSR), what services and software are covered?

338 … Qualifying services under 31 CFR § 560.540(a)(1) are those that are “incident to the exchange of communications over the internet,” as well as cloud-based services in support of such services or of any other transaction authorized or exempt under the ITSR. Qualifying software under 31 CFR §… Read more

179. Does the definition of “significant financial transaction” exclude the passive holding of Central Bank of Iran (CBI) reserves? Is the U.S. willing to give assurances that this will not be a basis for sanctions?

179 … This will be a case-by-case determination and will require specifics on what “passive holding” entails. As a general matter, we would likely not view the holding of reserves as sanctionable in the following circumstances: the accounts are frozen or restricted, under which the CBI would be… Read more

180. Are payments made under contracts existing prior to the date of enactment of the National Defense Authorization Act (NDAA) statute (December 31, 2011) exempted from the definition of “significant transactions”?

180 … No general exception will be provided for payments arising out of pre-existing contracts. The assessment of whether such payments are “significant” will be done on a case-by-case basis in line with the criteria discussed in FAQ #174 . … Are payments made under contracts existing prior to the… Read more

181. Will the U.S. refrain from sanctioning foreign financial institutions that receive funds from the Central Bank of Iran (CBI) to repay loans? What if these loans were granted for projects that might be subject to the food, medicine, and medical device exemptions under the National Defense Authorization Act (NDAA)?

181 … As noted , no general exception will be provided for payments arising out of pre-existing contracts. The assessment of whether such payments are “significant” will be done on a case-by-case basis in line with the criteria discussed in FAQ #174 . Regarding payments for food, medicine, and… Read more

Frequently Asked Questions

Office of Terrorism and Financial Intelligence