On March 24, OFAC issued General License I authorizing U.S. persons to engage in certain transactions ordinarily incident to the negotiation of, and entry into, contingent contracts for licensable activities under the Statement of Licensing Policy for Activities Related to the Export or Re export to Iran of Commercial Passenger Aircraft and Related Parts and Services (SLP). This new general license addresses lingering uncertainties surrounding the SLP, which established a policy of favorable treatment for license applications connected to commercial aircraft transactions in January 2016. Although the SLP generated significant industry interest, it left unclear whether U.S. persons were authorized under the ITSR to engage in transactions related to negotiating, and entering into, contracts authorized under the licensing policy.
Under General License I, U.S. persons may engage in all transactions "ordinarily incident" to the negotiation of, and entry into, "contingent contracts" for activities eligible for authorization under the SLP. The license specifies that contingent contracts include executory contracts, executory pro forma invoices, agreements in principle, executory offers capable of acceptance" (i.e., bids or proposals responding to public tenders), binding memorandums of understanding and "any other similar agreement" in which performance is made expressly contingent upon the issuance of a specific OFAC license authorizing the activities to be performed. Notwithstanding, General License I does not authorize dealings with persons whose property and interests are blocked by OFAC on the Specially Designated Nationals (SDN) List or the export or re export of any aircraft or related parts or services to Iran.
For additional information, see the OFAC Notice, as well as discussion in the AG Trade Law Blog.
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