The Securities and Exchange Commission (“SEC”) has issued guidance on the new requirement that all companies with stock traded on U.S. exchanges, whether U.S. or foreign, publicly disclose certain of their affiliates’ activities involving Iran. The requirement is one of the numerous measures implemented under the Iran Threat Reduction and Syrian Human Rights Act of 2012 (the “ITRSHRA”), signed into law on August 10, 2012.
Iran Threat Reduction and Syrian Human Rights Act of 2012 -
The ITRSHRA significantly expanded the U.S. sanctions program against Iran to provide for, among other things, liability of U.S. parent companies for the activities of their foreign subsidiaries involving Iran. After February 6, 2013, U.S. parent companies will be subject to civil penalties for a foreign subsidiary’s “knowing” involvement in transactions that would be prohibited if undertaken by a U.S. person. See Executive Order 13628, Oct. 9, 2012. Among other notable provisions, the ITRSHRA also increased the list of prohibited activities under the Iran Sanctions Act of 1996 (“ISA”) (as amended by the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (“CISADA”)), and enhanced the variety and number of sanctions that must be imposed against individuals or companies, both U.S. and non-U.S. alike, found to have engaged in the prohibited activities involving Iran.
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