Last week, the Treasury Department’s Office of Foreign Assets Control (OFAC) announced a $5,228,298 settlement agreement with Sojitz (Hong Kong) Limited (Sojitz HK) for causing U.S. financial institutions to process U.S. dollar payments related to the purchase and resale of Iranian-origin goods in Asia. This case demonstrates how U.S. dollar payments often trigger OFAC jurisdiction
U.S. Expands Sanctions on the Iranian Financial Sector
Last week, the United States expanded sanctions on Iran’s financial sector by designating 18 major Iranian banks as Specially Designated Nationals (SDNs) and authorizing additional future sanctions on the Iranian financial sector. Non-U.S. companies and banks could be subject to serious U.S. secondary sanctions penalties for significant continued dealings with the designated Iranian financial institutions,
U.S. Sanctions on Iran Have Been Fully Re-imposed
Today the U.S. Office of Foreign Assets Control (OFAC) amended the Iranian Transactions and Sanctions Regulations (ITSR, 31 C.F.R. Part 560) to fully re-impose U.S. sanctions on Iran following a wind down period that expired yesterday, November 4, 2018. OFAC also issued new FAQs for foreign affiliates of U.S. companies and non-U.S. companies.
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OFAC Formally Rescinds General License H – Foreign Subsidiaries of U.S. Companies Must Withdraw from Iran
Yesterday the Office of Foreign Assets Control (OFAC) formally rescinded General License H, requiring foreign subsidiaries of U.S. companies to wind down remaining business related to Iran by 11:59 pm EST on November 4, 2018. After that date, foreign subsidiaries of U.S. companies and other owned or controlled entities will generally be prohibited from conducting any business related to Iran, including wind down activity. This action was required following the President’s announcement on May 8 that the United States would withdraw from the multilateral Iran nuclear deal (the Joint Comprehensive Plan of Action or JCPOA).
OFAC issued amended FAQs and replaced General License H with a new Section 560.537 to the Iranian Transactions and Sanctions Regulations (ITSR, 31 C.F.R. Part 560) authorizing the following wind down activities related to foreign subsidiaries’ business with Iran:
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Trump Waives Secondary Sanctions on Iran, But Vows Not to do so Again Without Changes to the JCPOA
Last week the President begrudgingly extended waivers continuing to lift U.S. “secondary sanctions” on Iran. But the President also insisted that he will not issue further extensions without a renegotiation of certain aspects of the joint nuclear deal with Iran (the Joint Comprehensive Plan of Action or JCPOA), throwing the future of the deal and U.S. Iran policy further into doubt.
Before the JCPOA, the United States maintained a variety of so-called “secondary” sanctions on Iran, allowing the United States to penalize non-U.S. financial institutions and non-U.S. companies that engaged in certain transactions related to Iran, including those linked to the Iranian energy and petrochemical industry, the banking and finance sector, shipping, the automotive sector, and precious metals, among others. The secondary sanctions were purely extraterritorial in nature – they sought to dissuade non-U.S. companies
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