The United States has imposed sanctions against Iran since 1979, but more recently it has strengthened trade restrictions in response to Iran's support for terrorist groups and its nuclear weapons program. To avoid violating the restrictions, it's vital that your business is familiar with the details of the sanctions and embargoes imposed against Iran by the United States Department of Treasury Office of Foreign Assets Control (OFAC).
Companies and individuals in breach of the sanctions are considered to be aiding a foreign entity hostile to the United States and its allies, and are liable to major penalties including criminal prosecution.
Recent Developments
On December 31, 2011, the National Defense Authorization Act for Fiscal Year 2012 was signed into law. Section 1245 of the Act, "Imposition of Sanctions with Respect to the Financial Sector of Iran," requires that any property in which an Iranian bank has an interest be frozen, regardless of the degree of involvement of the bank. Any foreign bank having business relations with an Iranian bank will be shut out of the U.S. banking system.
What is prohibited?
The United States as well as the United Nations have imposed numerous and wide-ranging sanctions prohibiting companies and individuals from having dealings with Iran, including trade and financial transactions. more +
Goods and Services
No goods, technology, or services may be imported or exported, supplied or sold, directly or indirectly by any U.S. person inside or outside the United States, to or from Iran or the Government of Iran. This includes providing financing for import or export transactions with Iran, and brokering transactions that benefit Iran or its government.
Oil and Gas
U.S. companies may not be involved with petroleum development in Iran. This includes investment and trade in petroleum products from Iran and Iranian oil and gas companies, plus all petroleum and petrochemical companies identified by the U.S. Department of Treasury as being under Iranian government control.
Financial Transactions
U.S. persons may not make any new investments (including loans or extensions of credit) in Iran or Iranian companies, including banks, or perform transactions or contracts with Iran. “U-Turn” transfers involving Iran, where the transfer originates and ends with non-Iranian foreign banks, are also prohibited. U.S. persons may not enter or facilitate entry to Iran. U.S.
banks or their foreign branches may not service any financial accounts belonging to the Iranian government or persons in Iran.
Exceptions
Certain types of goods and services are exempt from the prohibition against transactions with Iran, including gifts of up to US$100 in value and donations of articles intended to relieve human suffering. However, all commercial dealings are restricted.
What are the penalties for violating the embargo or trade sanctions?
U.S. persons or companies violating the trade embargo or sanctions are liable to criminal penalties including monetary fines up to $10,000,000, freezing and/or seizure of assets, and imprisonment of up to 30 years.
How can my company avoid violating the embargo?
You must be scrupulous in protecting yourself against transactions with any of the Iranian-controlled or associated entities on the extensive OFAC watch list. Without a ready-fit OFAC solution, ensuring you can maintain and prove compliance requires considerable IT resources.
Visual Compliance solutions from eCustoms help prevent violations of embargoes and sanctions by integrating the OFAC regulatory processes into your current business processes, helping you to achieve the compliance level specific to your industry and stay current with changes and updates to OFAC regulations.
Iran Sanctions Timeline
Iran has been subject to sanctions by the United States since 1979; the restrictions have become increasingly stringent over the years, culminating in the Comprehensive Iran Sanctions,
Accountability and Divestment Act (CISADA) in 2010. more +
1979 Following the seizure of the American embassy in Tehran and the taking of American hostages by an Iranian radical group, the U.S. freezes $12 billion in Iranian assets including bank deposits and gold.
1984 After the beginning of the Iran-Iraq war, the U.S. approves sanctions prohibiting all sales of weapons and U.S. assistance to Iran.
1987 Prohibition instituted against imports and exports of most goods and services to and from Iran.
1995 The U.S. prohibits trade in Iran's oil industry. Subsequently, all trade between the U.S. and Iran is prohibited.
1996 U.S. passes the Iran-Libya Sanctions Act (ILSA), imposing penalties against foreign companies providing investment over $20 million for the development of petroleum resources.
2005 The U.S. freezes the assets of individuals connected with Iran's nuclear program following a report from the International Atomic Energy Agency (IAEA) that Iranian President, Mahmoud Ahmadinejad, had failed to comply with its safeguards agreement by breaking the injunction against uranium enrichment.
2010 The Comprehensive Iran Sanctions, Accountability and Divestment Act (CISADA) is passed, further enhancing restrictions in Iran, including revoking certain exceptions to the embargo on Iranian goods.
For more Information
For more information, call toll-free 1-877-328-7866 and talk to one of our financial services or OFAC compliance consultants. They'll help you analyze your requirements, evaluate your options, and provide focused demonstrations.
Or send an email.
Visual Compliance provides robust, cost-effective automation solutions and regulatory content to manage all of aspects of foreign trade compliance. With over 30 years of experience helping companies easily gain control and visibility over their compliance issues and processes,
our solutions are relied on by more than 4,000 companies at home, and abroad.
