Addressing OFAC Licensing for Exports to Iran
Case Overview
A U.S.-based manufacturer of cosmetic laser systems contacted our legal team regarding compliance with OFAC regulations. Over the past six years, the company exported these medical devices to Iran without confirming whether the necessary OFAC licenses were obtained. The client sought assistance to address multiple concerns:
- Confirming if an OFAC license was secured for previous exports.
- Identifying the specific OFAC license required for legal exports of their products to Iran.
- Determining the possibility of obtaining a retroactive OFAC license for past shipments.
- Understanding the consequences of non-compliance with OFAC licensing requirements.
- Evaluating the costs and timeline for securing an OFAC license for future exports.
This situation required a thorough understanding of U.S. sanctions on Iran and how they applied to the client’s operations.
Overcoming Regulatory Challenges
The complexities of U.S. sanctions on Iran posed significant challenges for the client. Our team conducted an exhaustive review of their export records to determine if there were any prior OFAC licenses on file. This process involved cross-checking the client’s documentation with the regulations governing dual-use goods such as cosmetic laser systems.
To address the lack of clarity regarding previous compliance, we clarified the specific type of license needed for such exports under OFAC’s Iran Sanctions Program. This included identifying the exact legal framework governing the export of medical devices and determining whether a retroactive license could be obtained. Our legal team prepared a detailed application supported by evidence to demonstrate that the client’s prior shipments were unintentional violations.
We also provided the client with a comprehensive analysis of the potential penalties for non-compliance, including fines and reputational risks. Additionally, we recommended steps for self-disclosure to OFAC to mitigate these risks and began the process of securing the necessary licenses for future operations.
Result
Thanks to the expertise of our legal team, the client achieved compliance with OFAC regulations and mitigated the risks associated with their previous exports. We:
- Verified the absence of prior licenses and prepared a retroactive license application accompanied by a voluntary self-disclosure to OFAC.
- Secured the appropriate license for future exports, ensuring compliance with U.S. sanctions laws.
- Provided the client with a robust compliance program, including internal audits and regular training, to prevent similar issues in the future.
This case underscores the importance of proactive legal guidance in navigating complex regulatory frameworks like the OFAC Iran Sanctions Program, ensuring both legal compliance and business continuity.
