Frequently Asked Individual Client Questions
What is OFAC?
The Office of Foreign Assets Control is an agency of the U.S. Department of Treasury which administers and enforces economic and trade sanctions against foreign countries and targeted individuals, designated by the U.S. government. OFAC derives its authority from U.S. Federal Law as well as through Executive Orders administered by different U.S. presidents. OFAC has operated for decades to enforce U.S. sanctions and has the power to impose punishments, such as fines and freezing assets, on individuals and entities that defy its directives. OFAC also has the power to grant exemptions on certain “prohibited” transactions through general and specific licenses.
Who Does OFAC Regulate?
Foreign countries, individual actors and entities are targeted for a variety of reasons. OFAC publishes a list of designated individuals or companies which are controlled by, or acting on behalf of, targeted countries, as wells as groups participating in illicit activities that are non-country specific. These designations often reflect U.S. national security interests, foreign policy, human rights abuses, and potential threats such as terrorism, narcotics traffickers, and the proliferation of weapons of mass destruction. The stated objective of sanctions is to impede the unwanted behavior of targeted countries and actors that undermine U.S. national security and foreign policy goals, while punishing those states, groups, and individuals who participate in these actions.
U.S. persons may not engage in “prohibited transactions” unless there is an explicitly stated exemption by OFAC or they obtain an OFAC license granting them permission. All U.S. persons, including citizens and permanent residents, and U.S. incorporated entities must comply with OFAC regulations, regardless of their location. The U.S. has various embargoes and sanctions programs that must be complied with, including on countries such as Iran, Cuba, Russia, North Korea, Venezuela, Syria, and others.
Do you need to obtain permission/OFAC license from the U.S. government to sell real property in Iran?
In October of 2012, OFAC issued a general license permitting all U.S. persons to sell inherited property or property that had been acquired prior to that person becoming a US person. Therefore, for you no longer need to apply for a specific license from OFAC for the sale of property acquired PRIOR to becoming a U.S. person or for the sale of inherited property. However, due to the fact that there is no direct banking relationship between Iran and the United States and due to the fact that you have to receive funds only through a currency exchange broker, you must submit certain compliance documents to your bank prior to each incoming wire transfer. You must also ensure that the wire transfers enter the United States through third country banks and through legal channels and that the transfer does not involve any designated entities or individuals.
How much money can you physically bring to the US or take with you abroad when traveling? Is the limit $10,000.00?
Any individual can physically bring into the U.S. or take out of the U.S. any amount of money in the form of cash when traveling to or from the United States. However, per U.S. Customs and Border Protection regulations, if you are carrying more than $10,000.00 when traveling into or out of the U.S., you must report this to Customs and Border Protection. For a sample declaration form please visit www.CBP.gov or contact our firm. Other than this reporting requirement, there is no other legal issue with bringing or taking any amount of money with you into or out of the United States.
Can your law firm assist clients with the actual transmittal of funds from Iran to the US (i.e. Can you do what a currency exchange broker does)?
No, our firm cannot assist in the actual transmittal of funds from Iran to the United States. In order to engage with any money transmittal service (i.e. a currency broker or saraf) an individual or entity must first apply for a specific license from the U.S. government as well as from the state in which they operate.
Furthermore, when dealing with money transmittal to/from Iran, the exchange company must also have a license issued by OFAC that permits that individual or entity to export services to Iran. If any entity in the United States tells you that they can send or receive money for you to/from Iran, please make sure that you ask to see a copy of their money transmittal license as well as their OFAC authorization before engaging in any services
How can my family send money from Iran to the US? Can they send it directly through a bank?
There is still no direct banking relationship between Iran and the United States. This means that you cannot directly transfer money through banks from Iran to the United States. You must still use the services of a currency exchange broker from Iran. That means your family will give rials in Iran to the currency exchange broker and the broker will in turn arrange for the sending of funds from a third country into the United States.
