Effective December 23, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the Iranian Transactions and Sanctions Regulations (ITSR) to expand the scope of medical devices that can be exported to Iran.
Now, unless specifically excluded by ITSR section 530(a)(3)(ii)-(iv), an item that qualifies as a “device” under section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 321) and is designated EAR99 (or would be if it were located in the United States) can be exported or re-exported to Iran without specific authorization from OFAC. (Previous restrictions on payment terms and shipping dates remain in effect.)
In addition, the amended General License allows U.S. persons to:
- Provide training for the safe and effective use of certain medicine and medical devices;
- Export certain medical replacement parts for storage for future use; and
- Export certain software and services for installation, operation, maintenance, and repair of authorized medical devices.
Such repair services include inspection, testing, calibration and diagnostic services intended to ensure patient safety and effective operation of exported devices.
The new rule also allows certain imports back into the United States of authorized items shipped to Iran in the event of product recalls, adverse events and other safety concerns. It also changes the definition of “Iranian-origin goods” and “goods of Iranian origin.” As a result, goods exported or re-exported to Iran with OFAC authorization that are subsequently re-exported out of Iran, and goods transported through Iranian territorial waters or stopped at an Iranian port without other contact with Iran, do not constitute “Iranian-origin goods,” or “goods of Iranian origin.” (For example, a medical device manufactured outside of Iran, unloaded at an Iranian port and subsequently re-exported from the same location would not – after the re-export – be considered an Iranian good or be subject to U.S. restrictions on dealing in Iranian property.)
In sum, the amendments support medical assistance, patient safety and opportunities for U.S. business by increasing the scope of medical devices and related support services that may be exported to Iran. In light of the continued challenges of doing business in and with Iran, and additional restrictions that may be imposed under the administration of new President Donald Trump, it remains to be seen how useful these new measures are.
We would like to thank Lidiya Kurin, a Bass, Berry & Sims law clerk based in our Washington, D.C. office, for her assistance in drafting this alert.