OFAC Amends and Reissues Somalia Sanctions Regulations

On April 27, 2021, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) amended and reissued its Somalia sanctions regulations, which include additional interpretive and definitional guidance, general licenses, statements of licensing policy, and other regulatory provisions that will provide further guidance to the public. Due to the number of regulatory sections that were updated or added, OFAC reissued the regulations in their entirety. This final rule replaces the regulations that were previously published in abbreviated form.

On May 5, 2010, OFAC issued the Somalia Sanctions Regulations, 31 CFR part 551 (the “Regulations”), to implement Executive Order (“EO”) 13536 of April 12, 2010, “Blocking Property of Certain Persons Contributing to the Conflict in Somalia.” The Regulations were initially issued in abbreviated form for the purpose of providing immediate guidance to the public. OFAC revised the Regulations to further implement EO 13536 and to implement EO 13620 of July 20, 2012, “Taking Additional Steps to Address the National Emergency With Respect to Somalia.” Generally, the Regulations implement targeted sanctions that are directed at persons determined to meet the criteria set forth in § 551.201 of the Regulations, as well as sanctions that may be set forth in any further Executive Orders issued pursuant to the national emergency declared in EO 13536.

In furtherance of the purposes of EO 13536 and EO 13620, OFAC amended and reissued the Regulations. The Regulations generally include standard provisions applicable to a number of US sanctions programs relating to the treatment of blocked property, entities majority-owned by blocked persons, and other matters. In addition,

• Section 551.207 of subpart B prohibits the importation into the United States, directly or indirectly, of charcoal from Somalia; and
• OFAC incorporated several new general licenses into the Regulations, including §§ 551.506, 551.508, 551.510, and 551.511. These provisions authorize certain transactions relating to the investment of certain funds, payments for legal services from funds originating outside the United States, official business of the United States Government, and official activities of international organizations. In addition, with respect to § 551.509, OFAC removed the requirement that payment for emergency medical services be specifically licensed.

In sum, the Regulations do not generally prohibit trade or the provision of banking or other financial services to the country of Somalia. Rather, the Regulations prohibit the direct or indirect importation of charcoal from Somalia into the United States, as well as transactions or services that involve property or interests in property that are blocked pursuant to these sanctions.

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