[author: Thad McBride]
While the United States has long maintained sanctions on Iran and has expanded those sanctions several times recently, none of those recent actions has had such a direct impact on U.S. companies as the Iran Threat Reduction and Syria Human Rights Act that President Obama signed into on August 10, 2012 (the “Act”). The Act creates new Iran sanctions, and provides for new sanctions on persons deemed to be involved in committing or supporting human rights abuses in Syria, including, in certain cases, non-Syrian parties.
Iran. Until imposition of the Act, non-U.S. subsidiaries of U.S. companies had been permitted to conduct business in Iran subject to certain limitations. While U.S. export controls under the Export Administration Regulations reached those non-U.S. subsidiaries’ actions with respect to transactions involving U.S.-origin goods, and while there were often many practical challenges for a non-U.S. subsidiary of a U.S. company to operate in Iran without the support of U.S. persons (or the U.S. parent), such operations were typically not directly prohibited under U.S. law.
No longer. Under the Act, even those entities established or maintained outside the United States, if owned or controlled by a U.S. person, are prohibited from knowingly engaging in a transaction with Iran, including any person subject to the jurisdiction of the Government of Iran, if the transaction would be prohibited under the Iranian Transactions Regulations (the “ITR”). This broad prohibition mirrors the prohibition currently in place under U.S. sanctions on Cuba, see 31 C.F.R. Part 515.
It is difficult to estimate how many U.S. companies have non-U.S. subsidiaries that are currently conducting business in Iran. In recent years, many large U.S. companies have prominently withdrawn from conducting business in the country; in addition, in response to the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, a number of non-U.S. companies have also withdrawn or significantly limited their business with Iran.
The Act includes a safe harbor provision: sanctions will not be imposed against U.S. persons that divest or terminate their business in Iran (unless otherwise permitted, e.g., under a license from the U.S. Treasury Department, Office of Foreign Assets Control) within 180 days of enactment of the Act. After that time, however, an option that was at least open to U.S. companies, i.e., conducting business with Iran through non-U.S. subsidiaries, has – presuming the implementing regulations track the text of the Act – been eliminated.
While this jurisdictional expansion is of particular note, other provisions of the Act will also impose new obligations on parties subject to U.S. jurisdiction. One such provision introduces new reporting obligations for public companies (issuers under the Securities Exchange Act of 1934) that engage in specified transactions with Iran. Under this provision, issuers are required to submit information about such transactions to the Securities and Exchange Commission in annual and quarterly reports; the SEC will, in turn, post information about those transactions on its website. The President is also required to investigate, other than in limited situations, whether to impose sanctions on an issuer involved in such transactions. These provisions of the Act are targeted almost entirely at non-U.S. companies that are publicly-traded in the United States. 
The Act also establishes restrictions on the issuance of U.S. immigration visas to certain Iranian nationals, including government officials deemed to be involved in weapons proliferation activities, supporting terrorism, or human rights abuses. Family members of designated officials are also subject to visa limitations. The Act also requires the Secretary of State to deny visa applications to Iranians seeking visas to attend U.S. institutions of higher learning when the Secretary of State determines the Iranian applicant seeks to prepare “for a career in the energy sector of Iran or in nuclear science or nuclear engineering or a related field in Iran.”
Syria. The Act also contains measures designed to protect human rights in Syria. There are three primary categories of persons who are subject to sanctions with respect to conduct in Syria. The first category is Syrian government officials, and those acting on their behalf, who are responsible for human rights abuses against Syrian citizens and their families, even if abuses occur outside Syria. The second category is persons who engage in censorship or other forms of repression in Syria. The third category, and perhaps most interesting because of its possible effect outside Syria, is persons who facilitate the transfer of goods or technologies to Syria that are likely to be used to commit human rights abuses in Syria. Examples of such goods and technologies, e.g., firearms and ammunition, police batons, as well as “sensitive technology,” are included in the text of the Act. While it seems unlikely that any of the U.S. government’s closest allies are providing such products to Syria, it seems equally probable that companies from other U.S. trading partners are equipping the Assad government with such items; under the Act, such companies could be the target of sanctions.
The U.S. government continues to seek ways to isolate Syria and, especially, Iran. With the Act and the prohibitions it includes on U.S. companies’ non-U.S. subsidiaries conducting business in or with the country, there are few other (administrative) measures the U.S. government can take to cut Iran off from U.S. commerce.
 The ITR are the primary regulations by which U.S. sanctions on Iran have been implemented. See 31 CFR Part 560.
 Like under the Foreign Corrupt Practices Act, the Act extends U.S. jurisdiction to conduct that may have little or no connection to the United States other than the fact the party engaged in the conduct is an issuer of securities in this country.