On October 12, 2011, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) issued two important General Licenses (GLs) authorizing the export and reexport of “food” to Iran and Sudan, respectively. The new GLs effectively eliminate for certain items the one-year OFAC license requirement administered under the Trade Sanctions Reform and Export Enhancement Act of 2000, as amended (TSRA) (22 USC 7201 et seq.). The GLs are effective immediately.

The new GLs are limited in scope, and are available only for items that meet the definition of “food,” which is defined as “items that are intended to be consumed by and provide nutrition to humans or animals in Sudan or Iran — including vitamins and minerals, food additives and supplements, and bottled drinking water — and seeds that germinate into items that are intended to be consumed by and provide nutrition to humans or animals in Sudan or Iran.”

The GLs authorize the export and reexport of food to Iran and Sudan, receipt of payment for the exports and certain extremely limited related activities, such as making shipping arrangements and obtaining insurance.

The new GLs do not authorize the following:

• Export of alcoholic beverages, cigarettes, gum, live animals, fertilizer or certain other items specifically excluded from authorization;
• Export or reexport to Iranian or Sudanese military or law enforcement purchasers or importers;
• Transactions with Specially Designated Nationals (SDN);
• Other business activities such as marketing, training of distributors, new investment or other conduct involving food sales in Iran and Sudan.
• Export and reexport of medicine, medical devices, and agricultural commodities that do not meet the definition of “food.”

These GLs are of particular importance to companies currently seeking and maintaining OFAC licenses to export and reexport food to Iran and Sudan, and to companies that may be interested in exporting food items to Iran or Sudan. Careful review of proposed transactions remains essential. Violations of the GLs could constitute U.S. sanctions and export control violations that are subject to civil, criminal and administrative penalties (including denial of export privileges).

Even with the available GLs, exporters are reminded to carefully review all proposed activities involving Iran and Sudan given the limited scope of the GLs, narrow definition of “food,” remaining sanctions on related activities, and prohibitions against dealing with prohibited parties in a transaction.