Latest Iran Sanctions: Need-to-Know from JD Supra

The net of international sanctions on Iran and entities that do business with the Iranian regime continues to tighten.

For your reference, here’s a roundup of latest commentary and analysis on sanctions imposed by the United States and Europe:

U.S. Activity

New Iran Sanctions Enacted (BakerHostetler):

“The [latest] law, which comes just shy of five months after the enactment of the Iran Threat Reduction and Syria Human Rights Act of 2012, among other things, imposes significant new sanctions against Iran, most notably against Iran’s energy, shipping and shipbuilding sectors, and persons providing Iran with certain products for those sectors or Iran’s nuclear program. It also provides for sanctions against (re)insurers covering sanctionable activities/risks.” Read on>>

New Sanctions Imposed Against Iran (Dechert LLP):

“The Iran-related provisions of the [National Defense Authorization Act for Fiscal Year] 2013 will take effect as of the start of July 2013, and they will enlarge significantly the extra-territorial application of the U.S. sanctions program directed against Iran. As described below, the NDAA 2013 expands the President’s authority to punish, and thus presumably to affect the behavior of, non-U.S. persons and entities (including, but not limited to, banks and insurance companies) engaging in business activities with Iran that do not involve U.S. persons, entities or items and that otherwise would not be subject to U.S. jurisdiction.” Read on>>

Iran Sanctions Update (Holland & Knight LLP):

“Under the [Iran Threat Reduction and Syria Human Rights Act of 2012], U.S. publicly traded companies will be subject to enhanced disclosure requirements related to Iran in their annual and quarterly reports filed with the SEC. The new disclosure requirements will apply to reports filed after Feb. 6, 2013, and will cover specified Iran-related activities that occurred during the periods covered by such reports.” Read on>>

New Reporting Requirements Under the Iran Threat Reduction and Syria Human Rights Act of 2012 (Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P.):

“U.S. companies have long been forbidden from engaging in most transactions with the Persian nation under sanctions administered by the Office of Foreign Assets Control. The purpose of the [Iran Threat Reduction and Syria Human Rights Act of 2012], however, is to apply restrictions against non-U.S. entities that conduct business with Iran, particularly in the petroleum (including petrochemical) and uranium sectors or areas potentially related to the proliferation of weapons of mass destruction or terrorism-related activities.” Read on>>

Compliance Issues with the New SEC Reporting and Disclosure Requirements Under the Iran Threat Reduction and Syria Human Rights Act of 2012 (Sheppard Mullin Richter & Hampton LLP):

“The new disclosure requirement extends not only to wholly or majority owned subsidiaries of issuers, but also other entities that meet the rather amorphous Securities and Exchange Commission concept of ‘affiliates.’ It also extends beyond transactions relating to the petroleum industry, conventional or nuclear weapons or human rights abuses. The significant scope of the disclosure requirement can be expected to raise difficult compliance questions for foreign entities in a variety of commercial sectors and in joint venture and investment scenarios that do not involve a majority U.S. interest.” Read on>>

Disclosures Under the Iran Threat Reduction and Syria Human Rights Act of 2012 (Snell & Wilmer L.L.P.):

“Issuers engaging in any reportable activity must disclose (i) the nature and extent of the activity, (ii) the gross revenues and net profits, if any, attributable to such activity, and (iii) whether the issuer or any affiliate of the issuer intends to continue the activity. If an issuer reports any of these activities in its periodic reports, it must also file a separate notice with the SEC advising the SEC that it has reported Iran-related activities in its periodic reports.” Read on>>

New OFAC Regulations Implement Iranian Sanctions (Morgan Lewis):

“On December 26, 2012, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the Iranian Transactions and Sanctions Regulations (ISTR) to implement section 218 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (the Act). Section 218 of the Act caused OFAC to add a new section to the ITSR to prohibit certain transactions by non-U.S. entities owned or controlled by a U.S. person and established or maintained outside the United States. OFAC also added a second new ITSR section to provide a grace period for the winding down of these prohibited transactions.” Read on>>

Final Rule on New Iranian Sanctions Published (Proskauer Rose LLP)

“Civil penalties may be imposed on a United States person if its foreign subsidiary violates the new prohibition, unless the United States person divests or terminates its business with the subsidiary by February 6, 2013, such that the U.S. person no longer owns or controls the subsidiary, as defined in the regulations.” Read on>>

European Activity

EU Implements Additional Sanctions on Iran (Baker & McKenzie Australia):

“On 22 December 2012, the EU implemented additional sanctions measures on Iran, notably introducing additional product and sector specific controls on the movement of certain goods to and from Iran, and tightening existing funds transfer controls that apply to transactions with Iranian persons. These new measures present further compliance hurdles for those who continue to do business with Iran.” Read on>>

EU defines scope of expanded Iran sanctions, including new natural gas, metals and vessels/ tankers bans (White & Case LLP):

“Consistent with established EU sanctions principles, the new sanctions measures apply to the EU territory (including its airspace), to nationals of EU Member States (including those located outside the EU), and on board any vessel or aircraft under Member State jurisdiction. They also apply to companies incorporated or doing business in whole or in part in a Member State.” Read on>>

Iran – Sanctions Update: Council Regulation 1263/2012 (Reed Smith):

“The sanctions legislation is now very detailed and wide ranging, and these latest measures yet again increase the difficulties in dealing and trading with Iran. Extreme caution must be used in entering into any transaction which involves an Iranian party, either directly or indirectly, or Iranian goods.” Read on>>

Visit the Corporate Compliance Report for related law news and updates>>