Frequently Asked Questions

38. Are U-Turn payments for Iran still permitted?

38 … No, as of November 10, 2008 U-Turn payments are no longer allowed. … Are U-Turn payments for Iran still permitted? …

371. What does OFAC interpret to be debt and equity? Are there other prohibited activities under Directives 1, 2, and 3 under Executive Order (E.O.) 13662? Can U.S. financial institutions continue to maintain correspondent accounts and process U.S. dollar-clearing transactions for the entities subject to the prohibitions of these directives?

371 … The term debt includes bonds, loans, extensions of credit, loan guarantees, letters of credit, drafts, bankers acceptances, discount notes or bills, or commercial paper. The term equity includes stocks, share issuances, depositary receipts, or any other evidence of title or ownership. The… Read more

372. Do Directives 1, 2, and 3 prohibit U.S. persons from entering into derivatives contracts linked to new debt or new equity issued by the entities subject to the Directives?

372 … On November 28, 2017, OFAC issued General License 1B , which continues to authorize certain transactions involving derivative products that would otherwise be prohibited pursuant to Directives 1, 2, or 3. General License 1B replaced and superseded General License No. 1A, dated September 12,… Read more

373. Do the prohibitions imposed pursuant to the Directives also extend to entities owned 50 percent or more by one or more entities identified by these Directives, as per revised guidance OFAC issued on August 13, 2014?

373 … Yes, these prohibitions apply to the named persons, their property, and their interests in property, which includes entities owned 50 percent or more by one or more persons identified as subject to the Directives. On October 31, 2017, OFAC amended and reissued Directive 4 in accordance with… Read more

550. When OFAC references a prohibition involving an “SSI entity” in these FAQs or in other guidance, what does that term mean?

550 … When OFAC uses the term "SSI entity" in these FAQs or in other guidance, it is referring to an entity subject to the Directive(s) at issue in a particular FAQ or piece of guidance. … When OFAC references a prohibition involving an “SSI entity” in these FAQs or in other guidance, what does… Read more

374. If I own a Kalashnikov product, is that product blocked by sanctions? Am I able to resell a Kalashnikov product at a gun show or other secondary market?

374 … If a U.S. person is in possession of a Kalashnikov Concern product that was bought and fully paid for prior to the date of designation (i.e., no payment remains due to Kalashnikov Concern), then that product is not blocked and OFAC sanctions would not prohibit the U.S. person from keeping or… Read more

375. If I have Kalashnikov products in my inventory, can I sell them?

375 … If a U.S. person has an inventory of Kalashnikov Concern products in which Kalashnikov Concern has an interest (for example, the products are not fully paid for or are being sold on consignment), we advise that U.S. person to contact OFAC for further guidance on handling of the inventory. …… Read more

391. Can U.S. persons issue and deal in new depositary receipts that are based on the equity of an entity subject to sanctions under one of the Directives?

391 … In certain circumstances, yes. U.S. persons, including U.S. financial institutions, may issue and deal in depositary receipts that are based on equity issued by a person subject to Directive 1 prior to the date the person became subject to Directive 1. U.S. persons may not, however, deal in… Read more

392. How are banks expected to distinguish between transactions involving new versus old equity under Directive 1 if entities subject to Directive 1 issue new equity that utilizes the same International Securities Identification Number (ISIN) or other identifier as equity issued prior to the sanctions effective date?

392 … Directive 1 prohibits U.S. persons from transacting in, providing financing for, or otherwise dealing in new equity for named persons, their property, or their interests in property. Directive 1 also prohibits such transactions from occurring in the United States. If a U.S. person decides to… Read more

393. Does OFAC consider counterparty credit risk associated with derivatives transactions that are authorized pursuant to General License 1B to Executive Order 13662 to constitute new debt?

393 … OFAC does not consider normal counterparty credit exposure encountered by a U.S. person to be an extension of credit when the U.S. person enters into an otherwise permissible derivatives transaction. U.S. persons engaging in such transactions should ensure that they do not hold, purchase, or… Read more

Frequently Asked Questions

Office of Terrorism and Financial Intelligence