Image: View of Albert Gallatin Statue US Flag US Treasury Department Washington DC. Statue by James Fraser, 1947.
On November 14th, the Office of Foreign Assets Control (OFAC) at the US Department of Treasury released a new Compliance Communique titled “Guidance for the Provision of Humanitarian Assistance to the Palestinian People.” It did not include any new sanctions or licenses, but offered updated guidance on options for humanitarian assistance in Gaza.
The US Department of the Treasury remains steadfast in its commitment to block Hamas from accessing funds following its terrorist attacks against Israel, while also ensuring that legitimate humanitarian aid reaches the Palestinian people in Gaza. Organizations like Hamas often exploit seemingly legitimate charities to gather funds illicitly, deceiving donors who have goodwill intentions.
Donors who wish to support the Palestinian people are advised to contribute to reputable and trusted organizations.
OFAC does not operate any comprehensive sanctions in Gaza or the Palestinian Territories. Therefore, transactions—including grantmaking—are allowed in the region as long as they do not involve any blocked entities. However, the presence of sanctioned persons in positions of power, for example Hamas in Gaza, creates significant difficulties. On this front, the recent OFAC guidance offers some clarity: there are certain exceptions for humanitarian aid, though transactions intended to benefit sanctioned persons are not authorized. But sanctions do not block incidental benefits, which OFAC defines as transactions “for the purpose of effecting the payment of taxes, fees, or import duties, or the purchase or receipt of permits, licenses, or public utility services,” if they are necessary for humanitarian aid.
This permission stems from two particular General Licenses, the texts of which are identical but which apply to different anti-terrorism regulations under the Department of Treasury’s Title 31. Sections 594.520 and 597.516 permit transactions that address basic humanitarian needs among civilians, including medicine, food and water. The statutes also permit practices like disaster and conflict relief and environmental protection. Funding these practices is permitted as long as they do not provide more than incidental benefits to blocked persons. As an example, OFAC noted that providing necessary medical aid to civilians is permitted in a “hospital staffed or occupied by Hamas.”
However, this guidance only applies to OFAC sanctions. There are other laws in place, such as material support statutes that prohibit support for terrorism. Transactions that reach Hamas—a designated terrorist actor—could potentially violate these statutes. Indeed, OFAC notes that its licenses do not absolve grantmakers of their responsibilities under other laws and regulations. While sanctions licenses provide more pathways and clarity for humanitarian assistance in Gaza, due diligence ahead of grantmaking is of high importance to ensure compliance.
Further guidance on navigating OFAC sanctions can be found in the resources below.