A new Executive Order (EO) issued on Sept. 17, 2021 authorizes the Department of Treasury to impose sanctions on persons and entities responsible for the current wave of violence in Ethiopia. Although the Executive Order cancels the humanitarian exemption in the International Emergency Economic Powers Act, it effectively restored it by simultaneously issuing a General License designed to protect a broad array of civil society activities by non-governmental organizations (NGOs). Two additional General Licenses cover programs by the UN and other key international organizations as well as permitting export and reexport of agricultural and medical commodities. The General Licenses also protect non-U.S. persons and entities. 

The Executive Order sets out criteria that can result in sanctions, ranging from acts of violence and human rights abuses to obstructing delivery of humanitarian aid. It also lists a menu of sanctions that can be imposed, including freezing assets. The EO has two other notable provisions:

  • It says that “No entity shall be blocked pursuant to this order solely because it is owned in whole or in part directly or indirectly, by one or more sanctioned persons…” (Sec. 2(b)) This avoids the Office of Foreign Assets Control’s (OFAC) “50% rule,” which also treats entities where a listed group has a 50 percent or greater interest as equally sanctioned. (See also FAQ 923)
  • It explicitly states that the order “shall not prohibit transactions for the conduct of the official business of the Federal Government by employees, grantees, and contractors thereof.” (Sec. 10) This avoids the bizarre past practice of forcing agencies like USAID to get licenses from OFAC to carry out their programs.

The three General Licenses that came out with the EO were accompanied by OFAC Frequently Asked Questions 922-927. General License 1 applies to the UN and other specific international organizations and allows for all transactions and actions for the conduct of their official business. 

General License 2 applies to NGOs. The types of transactions authorized include “processing and transfer of funds, payment of taxes, fees and import duties; and purchase or receipt of permits, licenses, or public utility services.” It permits transactions and activities that would otherwise be prohibited by the EO in both Ethiopia and Eritrea if they “are ordinarily incident and necessary” for activities in the five categories:

  1. Humanitarian project to meet basic human needs
  2. Democracy building
  3. Education
  4. Non-commercial development projects
  5. Environmental and natural resource protection

General License 2 provides examples of protected programming in each category. However, one important additional example is provided in FAQ 926, where it states that democracy building includes “activities to support conflict mitigation.” This differentiates the Ethiopia sanctions from other recent OFAC actions, such as the Sept. 24, 2012 General Licenses on Afghanistan, which do not mention either democracy building or conflict mitigation.

General License 3  exempts agricultural commodities, medicine and medical supplies and software updates from OFAC licensing, but notes that it is still necessary to get authorization from the Department of Commerce’s Bureau of Industry and Security.