On April 28, 2021, the US Treasury Department’s Office of Foreign Assets Control (OFAC) issued a final rule amending and reissuing the Somalia Sanctions Regulations, 31 C.F.R. Part 551 (“Regulations”) to further implement two existing Executive Orders, Executive Order 13536 of April 2010 and Executive Order 13620 of July 2012, and to replace the prior Somalia Sanctions Regulations that were published in May 2010 in abbreviated form. The Regulations also add a number of definitions and provisions to bring the Regulations in line with other more recent OFAC sanctions regimes, and add several new general licenses.
Executive Order 13536 (as amended by Executive Order 13620) was issued to block property of those who threatened the peace, security, or stability of Somalia, after the US government found increased acts of violence in the country, piracy off the Somali coast, and violations of a United Nations arms embargo. Executive Order 13536 covers, among others, entities and individuals who threatened peacekeeping operations, obstructed the delivery of humanitarian assistance, or directly or indirectly supplied or received arms or assistance related to military activities in Somalia. The names of individuals and entities designated pursuant to Executive Order 13536, as amended, whose property and interests in property are therefore blocked, are included in OFAC’s Specially Designated Nationals and Blocked Persons List (“SDN List”) with the identifier “[SOMALIA].”
Executive Order 13620 added a prohibition on the importation into the United States of charcoal from Somalia after Somalia’s charcoal exports had been found to generate revenue for the militant group Harakat al-Shabaab al-Mujahideen. As part of the implementation of Executive Order 13620, the Regulations now prohibit the importation, directly or indirectly, of charcoal from Somalia.
Further, the Regulations add provisions and definitions similar to other, more recently issued OFAC sanctions regimes, such as the requirement to hold blocked funds in an interest-bearing blocked account, the prohibition on evading or causing a violation of the relevant restrictions, and the application of the “50% rule” under which an entity owned 50% or more by one or more blocked persons is also blocked, even if not identified on the SDN List. OFAC also added a few new definitions, including “charcoal,” which for purposes of the sanctions regulations means “any product classifiable in heading 3802 or 4402 of the Harmonized Tariff Schedule of the United States.” Lastly, the Regulations include new general licenses authorizing US financial institutions to invest and reinvest blocked assets credited to a blocked account, payments for certain legal services from funds originating outside the United States, and official activities of the United States Government and United Nations agencies and organizations. OFAC also removed the requirement that payment for emergency medical services be specifically licensed, which had previously been a condition of the general license authorizing provision and receipt of nonscheduled emergency medical services.
Authors: Terence Gilroy, Eunkyung Kim Shin and Callie Lefevre
