OFAC publishes Western Balkans Stabilization Regulations general licenses 2 and 3 (wind-down and agricultural/humanitarian carve-outs)

Mechanism

OFAC administers the Western Balkans Stabilization Regulations under authorities deriving from Executive Order 14033 (2021), codified at 31 CFR Part 588. On 16 November 2023, OFAC designated a tranche of Republika Srpska entities and individuals in the network supporting Republika Srpska President Milorad Dodik, marking the first significant expansion of the WBSR SDN perimeter since the program's codification.

Two general licenses were issued simultaneously to mitigate operational disruption to US persons holding pre-existing commercial or humanitarian relationships with newly blocked parties:

• GL 2 (Wind-Down). Authorised US persons to engage in transactions

ordinarily incident and necessary to the wind-down of contracts and dealings with entities blocked under the WBSR on 16 November 2023. Carried a hard expiration date of 15 March 2024 — a standard 120-day wind-down window matching OFAC's post-2022 modal template for new SDN tranches. By the Federal Register publication date (7 March 2024) GL 2 was within days of expiration; formalisation in the regulatory record therefore had little operational effect for newly affected counterparties but preserved the administrative record for compliance purposes.

• GL 3 (Agricultural Commodities, Medicine, Medical Devices). Authorised

the export and re-export of agricultural commodities, medicine, medical devices, replacement parts and components, software updates, and activities ordinarily incident to medical prevention, diagnosis, treatment, or clinical trials to WBSR-blocked persons. GL 3 is the standard humanitarian-trade carve-out OFAC applies across new blocking perimeters to preserve essential humanitarian flows. GL 3 was subsequently superseded by GL 3A on 18 June 2024, when OFAC issued a further tranche of Dodik-network designations and updated the agricultural/humanitarian GL to cover the expanded entity list.

The 7 March 2024 Federal Register publication formalises both GLs per the Administrative Procedure Act. OFAC's practice is to make GLs operationally available on its website at the time of issuance and then publish them in the Federal Register within weeks or months; the publication date does not alter the effective date of either license.

Downstream implications

• Compliance-program update burden (2023 vintage). US financial

institutions, exporters, and service providers with Western Balkans exposure were required to incorporate GL 2 and GL 3 into screening workflows from 16 November 2023. The Federal Register publication clarifies the formal regulatory text for audit and examination purposes.

• GL 2 expiry pattern. The 120-day wind-down window is consistent with

OFAC's standard practice since 2022. Counterparties that did not complete wind-down transactions by 15 March 2024 required a specific licence.

• GL 3 → GL 3A supersession. The subsequent June 2024 expansion of the

WBSR perimeter necessitated updating GL 3 to cover newly designated entities; GL 3A (filed separately as 2024-10-23-us-ofac-wbsr-general-licenses-3a-4-5-publication) preserves the humanitarian-trade carve-out architecture across the enlarged sanctions perimeter.

Open questions

• Whether any US persons sought specific licences after GL 2 expired on

15 March 2024, and whether OFAC published any relevant guidance on post-expiry obligations.

• Whether the Dodik-network perimeter will continue to expand with

additional SDN tranches, requiring further GL revisions or new functional carve-outs (analogous to the GL 5 / GL 5A drinking-water pattern in the June 2024 tranche).