On February 3, 2017, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) imposed new Iran sanctions by listing 13 individuals and 12 entities on its list of Specially Designated Nationals and Blocked Persons. What does this mean for Canadian companies? Canadian companies need to determine if they are doing business with the newly listed persons.
Canadians must not only review contracts that they know are with Iran or Iranian entities. Some of the listed individuals and entities are not Iranian. For example, 3 individuals are Chinese (Xianhua, Qin (Jack), Yue, Richard, and Zhou, Carol), 1 individual is from the U.A.E. (Rostamian, Kambiz) and 3 of the entities are Chinese (Cosailing Business Trading Company Limited, East Star Company (a.k.a Satereh Shargh Mobin; a.k.a. Satereh Shargh Samin Co., Ltd.) and Ningbo New Century Import and Export Company Ltd. (a.k.a. New Century Import and Export Co., Ltd.) and 4 Lebanese entities (Maher Trading and Construction Company (a.k.a Maher Trading and Engineering; a.k.a. Maher Company), Mirage for Engineering and Trading (a.k.a. Mirage for Engineering), Mirage for Waste Management an Environmental Services SARL) and 1 U.A.E entity (Royal Pearl General T.R.D. (a.k.a. Royal Pearls; a.k.a. Royal Pearls General Trading). This means that Canadians need to be thinking about the new U.S. sanctions when they do business with (or are doing business with) Chinese persons, Lebanese persons and with the U.A.E.
Based on the fact that some of the listed persons are not Iranians and Iranian entities, this means that future sanctions may also be against persons who are not Iranian. Sanctions that are targeted against Iran may be more global in nature.
Further, speaking about the future, future sanctions may be imposed or re-imposed against Iranian financial institutions. What this means is that Canadian companies doing business with Iranians must be concerned about getting paid. If, in the future, there is a snap-back of U.S. sanctions against Iranian financial institutions or new sanctions are imposed against Iranian financial institutions, getting paid may become harder. Canadian companies should consider getting paid up front or quickly.
Speaking about getting paid, one way to avoid a nexus to U.S. law is to not get paid in United States dollars. Often U.S. dollar transactions are processed through U.S. banks and clearing houses.
Canadian companies need to watch announcements of new sanctions that may come into effect soon or that are announced without prior notice. The Trump Administration and Congress may take steps to expand U.S. sanctions against Iran further in new ways that have extra-territorial effect. What that means is that new U.S. sanctions may catch Canadian companies too.
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