The U.S. government re-imposed sanctions on Iran that had been waived or lifted by the Joint Comprehensive Plan of Action ("JCPOA"). The announcement of hundreds of designations and prohibitions on dealings with Iran's financial, energy, shipping and other sectors completes a process which began with President Trump's May 8, 2018 decision to withdraw from the JCPOA. According to the U.S. Treasury Department ("Treasury") of Foreign Asset Control ("OFAC"), these actions are intended to prevent Iran from financing "malign activities," and place "unprecedented financial pressure" on the Iranian government.

On November 5, 2018, the OFAC undertook a number of actions.

  • OFAC designated more than 700 individuals, financial institutions, companies, aircraft and vessels. (Non-U.S. individuals and entities that engage in "significant transactions" with many of these designated persons could themselves be targeted by sanctions. U.S. persons have been, and remain, generally prohibited from most dealings involving Iran.)
  • OFAC authorized sanctions on certain transactions by foreign financial institutions ("FFIs") in countries that continue to import Iranian oil without an exemption from the U.S. government. (Reportedly, at least eight exemptions to date have been issued.)
  • OFAC authorized sanctions in connection with the provision of specialized financial messaging services to the Central Bank of Iran and any Iranian financial institution designated in connection with Iran's alleged weapons of mass destruction, proliferation, support for terrorism and/or human rights abuses.

Also as of November 5, 2018, and coinciding with the end of the second JCPOA "wind-down" period, foreign entities that are owned or controlled by a U.S. person now are generally prohibited from engaging in transactions with the Iranian government and persons subject to Iranian jurisdiction. ( The first wind-down period ended on August 6, 2018.)

In connection with the re-imposition of U.S. sanctions, OFAC issued new and revised FAQs and published a final rule amending the Iranian Transactions and Sanctions Regulations.

Commentary / James Treanor

Foreign companies - and, in particular, FFIs - are most directly impacted by the full re-imposition of U.S. sanctions against Iran, and most firms will have used the 90- and 180-day wind-down periods to prepare themselves for the consequences of the Trump administration hardline approach. However, even U.S. firms that have maintained longstanding, comprehensive prohibitions on Iran-related dealings must not be complacent. Instead, they would be well advised to take a fresh look at their own sanctions risk, especially as it relates to possible dealings with foreign companies that are majority-owned by any of the hundreds of individuals and entities added to OFAC's Specially Designated Nationals and Blocked Persons List. Such ownership may not be transparent, and OFAC has already warned of Iran's efforts to evade U.S. sanctions through deceptive practices.

Given the administration's intent to impose significant costs on the leadership in Tehran, OFAC is likely to be aggressive in policing Iran-related sanctions. For the private sector, eternal vigilance is the price of compliance.

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