OFAC Announces Presumption of Denial for Iran-Related Specific License Applications

Zaher Fallahi, Attorney at Law, CPA
Zaher Fallahi, Attorney at Law, CPA | Tax Controversy, International Tax, Crypto Tax, IRS Audits, OFAC Compliance
September 10, 2026

On September 10, 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued a significant new Statement of Licensing Policy on Iran-Related Requests, establishing a presumption of denial for requests for specific licenses involving activities prohibited under the Iranian Transactions and Sanctions Regulations (“ITSR”), 31 C.F.R. Part 560, and other Iran-related sanctions authorities.

This represents a substantial tightening of OFAC’s licensing posture toward Iran and may have important consequences for U.S. persons seeking authorization for transactions involving Iranian property, funds, gifts, family transfers, and other Iran-related activities.

New Presumption of Denial

According to OFAC, under the new policy, Iran-related specific licenses may be issued only when required by law or in exceptional and urgent circumstances, such as circumstances involving risk to life, limb, or environmental safety.

Applicants seeking a specific license through OFAC’s Licensing Portal are instructed to provide a written attestation demonstrating the existence of such circumstances. OFAC will evaluate applications on a case-by-case basis and, where appropriate, in consultation with the U.S. Department of State.

OFAC also announced that it is suspending the application of previously issued Statements of Licensing Policy that had provided a more favorable licensing posture for certain Iran-related activities.

What the New Policy Does—and Does Not—Do

An important distinction should not be overlooked.

The September 10, 2026 Statement addresses OFAC’s policy for granting specific licenses. It does not state that the existing general licenses, regulatory authorizations, or exemptions contained in the ITSR have been repealed or suspended.

Accordingly, a transaction independently authorized under an existing general license does not necessarily require a specific-license application merely because OFAC has adopted a presumption of denial for specific licenses.

A particularly important example is 31 C.F.R. § 560.543, “Sale of certain real and personal property in Iran and transfer of related funds to the United States.”

Section 560.543(a) authorizes an individual who is a U.S. person to engage in transactions necessary and ordinarily incident to the sale of real and personal property in Iran and to transfer the proceeds to the United States, provided that the property was either acquired before the individual became a U.S. person or inherited from persons in Iran. The authorization also extends to engaging persons in Iran whose services are necessary for the sale, such as an attorney, funds agent, or broker.

This is particularly significant for Iranian-Americans who owned property in Iran before becoming U.S. persons or subsequently inherited property from persons in Iran. Where the requirements of § 560.543 are satisfied, the regulation itself provides the authorization; the transaction is not dependent upon OFAC exercising its discretion to issue a new specific license.

Section 560.543 nevertheless has important limitations. Among other things, it does not authorize the wind-down of commercial enterprises in Iran, reinvestment in Iran of the proceeds of an authorized property sale, or exportation or reexportation of goods, software, or technology to Iran. Other OFAC sanctions restrictions may also independently apply.

Inheritances and Pre-U.S.-Person Property Remain Important Exceptions

The September 10 policy therefore should not be interpreted as a blanket prohibition on every inheritance, property sale, or transfer of proceeds involving Iran.

For example, § 560.543 expressly addresses two important categories of property:

1. Property acquired before becoming a U.S. person; and 2. Property inherited from persons in Iran.

For qualifying property, the regulation authorizes transactions necessary and ordinarily incident to its sale and the transfer of the proceeds to the United States, subject to the conditions and limitations of the regulation.

The distinction is critical. A transaction already authorized by a general license is fundamentally different from a transaction for which a U.S. person must ask OFAC to exercise its discretion and issue a specific license.

Practical Impact of the September 10 Policy

For individuals whose proposed transactions actually require a specific license, the September 10 announcement is significant. Applications that previously might have been considered under a more favorable licensing policy may now face a presumption of denial unless the applicant can establish that authorization is required by law or that exceptional and urgent circumstances exist.

Before concluding that a transaction requires a specific license, however, U.S. persons should carefully determine whether an existing general license, exemption, or regulatory authorization—including 31 C.F.R. § 560.543—already applies.

In some cases, therefore, the threshold legal question may no longer be simply, “Can we obtain an OFAC specific license?” Instead, the first question should be: “Does the ITSR already authorize this transaction?”

Conclusion

OFAC’s September 10, 2026 Statement represents an important change in U.S. sanctions policy toward Iran. For transactions requiring discretionary OFAC approval, the new presumption of denial may substantially limit the availability of specific licenses.

At the same time, the announcement should be read carefully. It concerns OFAC’s specific-licensing policy and does not, on its face, eliminate existing general licenses and other regulatory authorizations under the ITSR.

Of particular importance, 31 C.F.R. § 560.543 continues to authorize, subject to its terms and limitations, the sale of certain real and personal property in Iran and transfer of the proceeds to the United States when the property was acquired before the individual became a U.S. person or was inherited from persons in Iran.

Accordingly, the September 10 announcement should not be viewed as closing every lawful avenue for U.S. persons dealing with Iranian property or inheritances. Each transaction requires careful analysis of the particular facts, the applicable general licenses and exemptions, the parties involved, and the proposed movement of funds.

Zaher Fallahi, Attorney At Law, CPA (CA & DC) International Tax & OFAC Sanctions Attorney

This article is provided for general informational and educational purposes only and does not constitute legal or tax advice. OFAC regulations and licensing policies are fact-specific and subject to change.