US Issues New Executive Order Authorizing Additional Iran Sanctions and Sanctions New Entities Pursuant to CISADA; Congress Approves New Iran Sanctions Legislation

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On July 31, 2012, President Obama issued Executive Order 13622 (the “Order”)1 to strengthen the Iran sanctions framework by further targeting Iran’s oil and petrochemical sectors as well as its shipping trade. The Order, entitled “Authorizing Additional Sanctions with Respect to Iran,” authorizes the Secretary of the Treasury, in consultation with the Secretary of State, to impose new sanctions on foreign financial institutions (“FFIs”) determined to have knowingly conducted or facilitated specified significant financial transactions with the National Iranian Oil Company (“NIOC”) or Naftiran Intertrade Company (“NICO”), or any entities owned, controlled by, or acting on behalf of NIOC or NICO.

The Order also authorizes sanctions against FFIs found to have knowingly conducted or facilitated significant transactions for the purchase or acquisition of petroleum, petroleum products, or petrochemical products from Iran, and provides that these FFIs may be prohibited from opening or maintaining correspondent or payable-through accounts in the United States. Further, the Order authorizes the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) to block the property and interests in property of any person determined to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, NIOC, NICO, or the Central Bank of Iran (“CBI”), or the purchase or acquisition of US bank notes or precious metals by the Government of Iran. The Order also heightens the US State Department’s authority to impose sanctions under the Iran Sanctions Act (“ISA”), as amended by the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (“CISADA”), on non-US entities engaged in significant transactions for the purchase of petroleum and petroleum products from Iran.

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Published In: General Business Updates, Elections & Politics Updates, Energy & Utilities Updates, Finance & Banking Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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