52.225-13 Restrictions on Certain Foreign Purchases
Source: FAR 52.225-13 on acquisition.gov
Contractors must not acquire supplies or services from sanctioned countries or entities unless authorized by OFAC, and must flow down this restriction to all subcontractors.
Overview
FAR 52.225-13, "Restrictions on Certain Foreign Purchases," prohibits contractors from acquiring supplies or services from certain foreign sources for use in contract performance unless specifically authorized by the Office of Foreign Assets Control (OFAC). The clause implements U.S. government sanctions and embargoes, restricting most transactions involving countries such as Cuba, Iran, Sudan, Burma, and North Korea, as well as entities and individuals listed by OFAC. Contractors must ensure compliance with OFAC regulations and flow down this clause to all subcontractors.
Key Rules
- Prohibition on Certain Foreign Purchases
- Contractors cannot acquire supplies or services from countries or entities subject to OFAC sanctions unless authorized by OFAC.
- Specific Country and Entity Restrictions
- Most transactions involving Cuba, Iran, Sudan, Burma, and North Korea are prohibited, as are dealings with individuals/entities on OFAC’s Specially Designated Nationals (SDN) list.
- Mandatory Flowdown
- Contractors must include this clause in all subcontracts, ensuring subcontractors are also bound by these restrictions.
Responsibilities
- Contracting Officers: Ensure the clause is included in applicable contracts and monitor compliance.
- Contractors: Avoid prohibited transactions, check OFAC lists, obtain necessary authorizations, and flow down the clause to all subcontractors.
- Agencies: Oversee contractor compliance and address violations.
Practical Implications
- This clause exists to enforce U.S. economic sanctions and embargoes in federal contracting.
- Contractors must actively screen suppliers and subcontractors for OFAC restrictions, risking contract breach or legal penalties for non-compliance.
- Common pitfalls include failing to check the SDN list or neglecting to flow down the clause to subcontractors.
As prescribed in 25.1103(a), insert the following clause:
Restrictions on certain foreign purchases (Feb 2021)
(a) Except as authorized by the Office of Foreign Assets Control (OFAC) in the Department of the Treasury, the Contractor shall not acquire, for use in the performance of this contract, any supplies or services if any proclamation, Executive order, or statute administered by OFAC, or if OFAC’s implementing regulations at 31 CFR ChapterV, would prohibit such a transaction by a person subject to the jurisdiction of the United States.
(b) Except as authorized by OFAC, most transactions involving Cuba, Iran, and Sudan are prohibited, as are most imports from Burma or North Korea, into the United States or its outlying areas. Lists of entities and individuals subject to economic sanctions are included in OFAC’s List of Specially Designated Nationals and Blocked Persons at https://home.treasury.gov/policy-issues/financial-sanctions/specially-designated-nationals-and-blocked-persons-list-sdn-human-readable-lists" target="_blank">https://home.treasury.gov/policy-issues/financial-sanctions/specially-designated-nationals-and-blocked-persons-list-sdn-human-readable-lists. More information about these restrictions, as well as updates, is available in the OFAC’s regulations at 31 CFR ChapterV and/or on OFAC’s website at https://home.treasury.gov/policy-issues/office-of-foreign-assets-control-sanctions-programs-and-information" target="_blank">https://home.treasury.gov/policy-issues/office-of-foreign-assets-control-sanctions-programs-and-information.
(c) The Contractor shall insert this clause, including this paragraph (c), in all subcontracts.
(End of clause)