On December 22, 2016, the U.S. Department of the Treasury Office of Foreign Assets Control (OFAC) amended the rules surrounding the General License for the exportation of medical devices to Iran. See 31 C.F.R. Section 560.530. Prior to the recent change, OFAC had published a list of medical supplies and devices that were eligible for exportation to Iran. The exportation of all medical devices not included on the list would require a Specific License from OFAC.
OFAC’s recent action changed this inclusionary list to an exclusionary one. Put differently, OFAC has now authorized the exportation of all medical devices to Iran except for products contained on a new shorter List of Medical Devices Requiring Specific Authorization (PDF).
The items on the List of Medical Devices Requiring Specific Authorization include advanced diagnostic imaging equipment, oxygen generators, high-volume pumps, and a long list of laboratory equipment.
This change should help lighten the load for the OFAC Licensing Division. Hopefully, this can lead to a reduction in the long wait-times being experienced by parties who have filed specific license applications. The long turn-around time, which can sometimes take a year or more, can have a chilling effect on business.
In addition, the new changes have allowed for exportation of services, products, and software related to training with medical devices, in order to help improve patient safety. This also includes expanded general authorization for replacement parts. Furthermore, the expanded general licenses also include software used for maintenance and repair of medical devices.
With that said, the process for engaging in exportations authorized by General License still requires a close analysis of the underlying transaction and its contractual terms, such as terms for payment. It is also important that affected companies add extra steps to their compliance process in order to fully document that their products fall under the definition of medical device contained in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321).
This blog is for informational purposes only and is not legal advice.