Business

March 20, 2014 by Rebecca Esmi

Happy Nowruz OFAC policy warms with new General License G

On March 19, 2014 in a gesture of rapprochement that may be timed to coincide with Persian New Year “Nowruz,” Deputy Director Barbara Hammerle introduced the debut of General License G (GLG). The new GLG reflects a warming of educational policy and high-lights are summarized below, but perhaps the most notable change is that it authorizes banks and private lenders to transact funds transfers and process student loan payments from persons in Iran. Notes 2 and 3.

Summary high-lights:

a. Accredited post-secondary institutions can enter into academic exchange programs with those in Iran;

b. Educational services.

1. U.S. academic institutions and their contractors are authorized to export their services:

(i) As to filing and processing applications and accepting payment for same, as well as for tuition, from persons in Iran (or residents of Iran);

(ii) To recruit, hire, or employ Iranian nationals as teachers so long as the proper visa is obtained;

(iii) Providing selected undergraduate coursework through online learning to Iranian nationals;

2. U.S. students may participate in coursework in Iran in selected fields or participate in noncommercial research.

3. In support of several charitable educational activities such as educational reform, access to education, and the cultivation of literacy.

4. U.S. persons are authorized to administer to Iranian nationals professional certificate exams as well as university entrance exams, to include standardized multiple-choice, and provide all ancillary services needed to matriculate a student at a U.S. institution.

The GLG likewise allows the exportation of software and hardware that supports personal communication (Note 5), which is already in place, but also authorizes U.S. persons to participate in publishing-related activities. Note 4. As always when it comes to OFAC matters, great care must be taken to comply with all rules; e.g., here it should be noted that exportation of technology in contravention with EAR99 are expressly prohibited.

August 16, 2013 by Rebecca Esmi

OFAC General License D: EARs, ECCNs, and other data-designations.

To be exportable under OFAC General License D, software, hardware, and services must bear a specific categorization based upon the type of device, technology, and purpose. Specifically, the designation must be either: (1) EAR99 pursuant to Export Administration Regulation or export control classification number (“ECCN”) 5D992.c by the U.S. Department of Commerce pursuant to its Commerce Control List detailed on supplement No. 1. Additionally, the Annex to General License D details EAR and ECCN designations by eleven categories.

For the uninitiated, EAR and ECCN nomenclature may be quite perplexing, but they are simply ways to categorize exportable items according to degree of risk. For example, items related to ballistics would be high-risk, so must be exported with great care to ensure the items do not fall into the hands of the wrong parties. Alternately, items may be so ubiquitous and “mass market” that it makes little sense to regulate their export since they are found all over the world readily. EAR99, for example, indicates that the items are “NLR” – or no license required. But be forewarned: this doesn’t mean the exporter needs no license! It simply means there is one final check required. This last remaining check is to verify the receiving country is not on the “bad boy” list of countries that give rise to an export or other license requirement.

Iran previously was on this “bad boy” list. But recently, effective with General License D, exports to Iran of software, hardware, and services related to “personal communications” for personal use is NLR — so long as each item is designated EAR99 or ECCN 5D922.c or as designated on the Annex to the General License D. To illustrate, information on Apple’s public website provides ECCNs for its iPhone 5 as 5A992.c. Since Mobile Phones are authorized for export on the Annex to General License D and specifically those categorized as 5A992.c, then an iPhone 5 may be exported to Iran for persona use under General License D.

August 16, 2013 by Rebecca Esmi

OFAC follows the yellow brick road with General License D.

Adam Szubin, Director of the Office of Foreign Assets Control (OFAC) within the U.S. Department of the Treasury recently debuted General License D (“GLD”) which effectuates U.S. exports to Iran of services, hardware, and software incident to “personal communications.” Specific items are detailed on the Annex to the announcement, to include smart phones, tablets, etc. The first glance revealed by pulling aside the curtain might suggest GLD reflects a policy sea-change, as reflecting a departure from prior laws that hardened sanctions on most transactions.

But as was the case with the Metro-Goldwyn-Mayer film version of L. Frank Baum’s novel, the film classic Wizard of Oz, it is much more complex than that. This complexity requires that U.S. entities proceed with caution, as the following two issues show.

First, does General License D really reflect a sea-change? In reality, a review of ITSR shows that GLD is an extension of earlier policies regarding communications and the people of Iran. It should be noted, for example, that the previous iteration of ITSR allowed U.S. entities to export free, publicly-available software. See 31 C.F.R. § 540. Now, permission is being extended to the same items to include those that carry a price tag.

Second, as a practical matter, how can a U.S. company go about exporting services, software, and/or hardware while staying in compliance with the greater regulatory scheme? Remember, there are other laws and regulations in abundance with which U.S. entities and their partners must comply. One set of key laws governs banking transactions . So now GLD permits U.S. entities to export the above to Iran – but pragmatically, how will the U.S. entities manage the physical financial transaction, in light of the OFAC sanctions in place and the many Iranian banks on the SDN black-list.

GLD is certain to further the area’s reliance on the informal hawala money-transfer networks, a consequence that OFAC will presumably not find very desirable. But perhaps OFAC has liberalization of the SDN list in its sights: we will see.

For now, of course, U.S. entities and their partners must be careful to steer clear of the regulatory minefield as they follow the yellow brick road set forth in GLD.

October 16, 2012 by Rebecca Esmi

Hot off the presses: EB-5 Regional Center Program is extended

Recently President Obama signed into law S. 3245 which extends till September 30, 2015 the EB-5 Regional Center Program. The extension is celebrated by many as evidence of the value U.S. leaders place in the Regional Center program, entrepreneurship, and generally investor visas. These U.S. leaders are passionate about the importance of attracting investors and entrepreneurs to the U.S., arguing that they bring a much-needed economic spark — including capital influx and jobs — to fuel the U.S. economy.

If you are a U.S. business owner or a foreign national investor who seeks to learn more about U.S. investor visa programs, contact us today.

For details on the law, click here: http://www.whitehouse.gov/the-press-office/2012/09/28/statement-press-secretary-hj-res-117-s-3245-and-s-3552

July 23, 2012 by Rebecca Esmi

E-2 U.S. Treaty Investor visa program – a program full of promise

Friendship, Commerce, Navigation, and Bilateral Investment treaties between sovereignties have delivered mutual commercial benefit for centuries. These days, a foreign national investor (FNI) can also use such a treaty to obtain a visa in the U.S. There are two separate visa programs provided by international treaties with the U.S.: The E-1 Treaty Trader and E-2 Treaty Investor visas.

A proper exploration of these visa options begins with a survey of whether the FNI’s country and the U.S. have a qualifying treaty or treaties in place. Bahrain and the U.S., for example, have only an E-2 Treaty Investor-enabling Treaty. In contrast, Canada and the U.S. have treaties that support both E-1 Treaty Trader as well as E-2 Treaty Investor programs.

This post focuses on the E-2 Treaty Investor visa program. FNIs should not be daunted by the challenging application packet. Remember: the would-be investor is in the enviable position of strength, having amassed a sizable investment. And, the investor has done his/her due diligence and located a for-profit enterprise seeking and warranting the investment.

Nevertheless, the final lap of the race requires some stamina as numerous application requirements must be met. These include:

1. Capital investment must be under the investor’s control, it must be put at risk, and it must be a done deal — or imminently so.

2. Capital investment must be substantial – but no bright-line rule.

3. The for-profit U.S. enterprise must be real and active – bona fide.

4. The would-be investor, if an employee, must be an executive, manager, or supervisor.

This list is not exhaustive but illustrates the complexity of the application process. Also noteworthy is that fact that U.S. embassies often have specific requirements on supporting evidence and its format. Thus, for all the reasons cited above, it is wise to consult an immigration attorney prior to proceeding. See 22 CFR 41.51(c)(2); 9 FAM 41.51.