As 2013 begins, the United States has reiterated its commitment to countering the threat posed by Iran by passing new legislation, issuing new regulations and guidance, and bringing into effect new requirements to increase economic pressure. These new restrictive measures are likely to have a measureable impact on companies in all sectors of the economy.
Iranian Transactions and Sanctions Regulations -
On December 26, 2012, the Office of Foreign Assets Control (OFAC) amended the Iranian Transactions and Sanctions Regulations (ITSR) to implement Section 218 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (TRA). Section 218 of the TRA states that no entity that is owned or controlled by a U.S. person and established or maintained outside the United States may “knowingly engage in any transaction, directly or indirectly, with the Government of Iran or any person subject to the jurisdiction of the Government of Iran” if the transaction would be prohibited if performed by a U.S. person or a person in the United States. The amendments to the ITSR track the language of Section 218 and Executive Order 13628, detailed in our Client Alert of October 12, 2012. Most notably, Section 560.555 of the ITSR extends the safe harbor provision of Section 218 and authorizes all transactions ordinarily incident and necessary to the winding-down of transactions with Iran until March 8, 2013 (extended from February 6, 2013), so long as the transactions do not involve a U.S. person or occur in the United States.
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