Expansion of US Sanctions Against Iran
In response to recent determinations regarding the expansion of Iranian nuclear capability, the United States has announced enhanced US economic sanctions targeting Iran. The new measures, summarized below, include expansion of extraterritorial sanctions (i.e., applicability to non-US entities) on transactions with Iran’s petrochemical and energy sector, identification of Iran as a jurisdiction of primary money laundering concern and additional designations of Iranian entities on the Specially Designated Nationals and Blocked Persons List ("SDN List").
Sanctionable Transactions with Iran's Energy and Petrochemical Sector
Under new Executive Order 13590, which is effective as of 12:01 a.m. Eastern Standard Time on November 21, 2011, any person, regardless of nationality or location, engages in sanctionable activity if it is determined that such person knowingly engages in:
The sale, lease, or provision to Iran of goods, services, technology or support that has a fair market value of US$1 million or more or that, during a 12-month period, has an aggregate fair market value of US$5 million or more, and that could directly and significantly contribute to the maintenance or enhancement of Iran's ability to develop petroleum resources located in Iran
The sale, lease or provision to Iran of goods, services, technology or support that has a fair market value of US$250,000 or more or that, during a 12-month period, has an aggregate fair market value of US$1 million or more, and that could directly and significantly contribute to the maintenance or expansion of Iran's domestic production of petrochemical products
"Petroleum Resources" are defined to include "petroleum, oil, natural gas, liquefied natural gas and refined petroleum products." "Petrochemical Products" are defined to include "any aromatic, olefin and synthesis gas, and any of their derivatives, including ethylene, propylene, butadiene, benzene, toluene, xylene, ammonia, methanol and urea."
Sanctions also may be imposed on any entity that owns or controls an entity engaged in the above transactions where such entity had actual knowledge or should have known of the sanctionable activity. Sanctions may also be imposed on an entity sharing common ownership or control with an entity engaged in the above transactions, if they knowingly participated in the prohibited activity.
These new measures expand on prior extraterritorial sanctions measures embodied in the Comprehensive Iran Sanctions and Divestment Act of 2010 ("CISADA") and lower some of the monetary thresholds triggering sanctionable activity.
See full alert below for additional information.