Mar

9

Good News and Bad News

Posted by at 9:27 pm on March 9, 2011
Category: Libya Sanctions

LibyaFor all you lawyers chomping at the bit to provide legal representation to Col. Gaddafi and the government of Libya, I have, as they say, good news and bad news.

Following tradition, let’s have the good news first. The Office of Foreign Assets Control (“OFAC”) today issued General License No. 3 under Executive Order 13566. The general license permits the provision of certain legal services to Colonel Gaddafi, family members, the Government of Libya or other persons or entities blocked by Executive Order 13566. The permitted legal services include representation as to compliance with U.S. law, representation before courts and agencies, and representation with respect to imposition of sanctions. A significant proviso to the general license is that “all receipts of payment of professional fees and reimbursement of incurred expenses must be specifically licensed.” There is nothing particularly unusual about General License No. 3 as it parallels similar provisions relating to payment of legal fees in the regulations promulgated to implement other sanctions programs, such as section 560.525 of the Iranian Transaction Regulations.

Now for the bad news. Executive Order 13566 blocks all the assets of all persons and entities covered by the order, and OFAC severely limits the extent to which blocked funds can be used to pay legal fees. Most significantly the policy only permits the use of blocked funds to pay the legal fees of a U.S. person. Needless to say, no one covered by Executive Order 13566 is a U.S. person. In other words, U.S. lawyers are now authorized to represent Libya as long as they agree to do it pro bono.

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Copyright © 2011 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

One Comment:

Clif — The worse news is how little guidance is out there on any aspect of the 2/25/11 Executive Order. If I were the General License issuer, I’d want to get one out that authorized U.S. persons to put blocked assets in blocked accounts, which right now is a violation of the Executive Order’s prohibition on dealings and transfers of blocked property, although everyone’s doing it. I’d want to do a General License that made the section 501.603 reporting requirements on blocked property applicable to Libyan Government assets — which are nor blocked “pursuant to this chapter” (Chapter V of 31 C.F.R.). OFAC will continue to be utterly beseiged until we get regulations that actually speak to the specific types of issues that Libyan investment, Libyan oil transactions and their financing raise — and we haven’t seen many of those in any program for some time.

Comment by Ex-OFAC on March 10th, 2011 @ 9:03 pm