In January 2020, the US issued executive order (E.O.) 13902, imposing sanctions with respect to any person determined by the Secretary of the Treasury to operate in the construction, mining, manufacturing, and textiles sectors of the Iranian economy. It also includes persons who knowingly engage in a significant transaction for the sale, supply, or transfer to or from Iran of significant goods or services for use in connection with one of these sectors. The E.O. could subject both Iranian and non-Iranian persons to US sanctions.
OFAC issued FAQs 830 to clarify that first, the E.O. is not intended to apply to the manufacture of medicines and products for medical and personal care if manufactured for use in Iran (and not export from Iran). Persons operating under the general license for exporting agricultural commodities, food, medicine, or medical devices to Iran will also not be subject to EU 13902. However, OFAC general licenses still do not permit dealing with specially designated nationals (SDNs).
FAQ 831 provides guidance on what will be considered construction, mining, manufacturing, and textiles sectors of the Iranian economy. Regulations are anticipated to define these terms.
FAQs 831 and 832 provides guidance on when goods will be considered to have been provided "in connection with" with one of the above sectors, and on the what will be deemed "knowing", by reference to the term used in the Iranian Financial Sanctions Regulations ("The term knowingly, with respect to conduct, a circumstance, or a result, means that a person has actual knowledge, or should have known, of the conduct, the circumstance, or the result.").
For the purposes of evaluating sanctions pursuant to E.O. 13902, persons in Iran manufacturing medicines, medical devices, or products used for sanitation, hygiene, medical care, medical safety, and manufacturing safety, including soap, hand sanitizer, ventilators, respirators, personal hygiene products, diapers, infant and childcare items, personal protective equipment, and manufacturing safety systems, solely for use in Iran and not for export from Iran, will not be considered to be operating in the manufacturing sector of the Iranian economy.