Earlier this week the Department of the Treasury published data covering licensing activities undertaken pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (“TSRA”) and covers activities undertaken by the Treasury Department’s Office of Foreign Assets Control (“OFAC”) under Section 906(a)(1) of the TSRA ‘from October through December 2006.
The Department says that “there was a 20.3 percent decrease in the number of license applications received during this reporting quarter from the prior quarter (185 for Oct.-Dec. 2006, 232 for Jul.-Sep. 2006). OFAC was able to issue licensing determinations1 on 30.3 percent of all the license applications received during the October – December 2006 period (compared to 22.0 percent for the Jul.Sep. 2006 period), and issued additional determinations after the quarter ended. The average processing time for issuing licensing increased by 56.4 percent to 69.9 business days in thisquarter of operation, and the average time for issuing licensing determinations increased by55.3 percent to 64.0 business days versus 41.2 business days in the preceding quarter.
“The increased complexity and length of license applications (the majority of applications pertain to the export of medical devices to Iran) coupled with the more protracted scrutiny on the part of other reviewing agencies continued to affect processing time of license applications in this quarter. These cases are evaluated by other agencies both in terms of whether the foreign entities involved in the transaction “promote international terrorism,” as required in section 906 of the TSRA, and in terms of whether the commodities at issue implicate independent export control regimes involving chemical or biological weapons or weapons of mass destruction as provided in section 904(2)(C) of the TSRA.”
So what does this all mean really? On the surface it just may take a little longer than expected to process a license if a company seeks to do business with a country deemed a state sponsor of terror. It may not be what some trade proponents in town want to hear but that is simply a cost, a reasonable one, of doing business with countries such as these. Companies and individuals must plan accordingly if they wish to venture into those markets. Fortunately, there are not a lot of these countries. The three page summary of 2006 transactions is available at the Department of the Treasury website.