Compliance Solutions

Iran Sanctions and Embargoes

Recent Developments

The United States has imposed increasingly restrictive sanctions against Iran since 1979. It was only recently that some of these sanctions were lifted.

In 2015, the Joint Comprehensive Plan of Action (JCPOA), signed by the United States, the European Union, China, Russia, and Iran was aimed at ensuring that Iran's nuclear program will be applied only to peaceful intentions. On January 16, 2016, the International Atomic Energy Agency (IAEA) verified that Iran had complied with its key nuclear directives as described in the JCPOA. As a result, the U.S. lifted nuclear-related sanctions on Iran and over 400 individuals and entities were removed from the List of Specially Designated Nationals and Blocked Persons (SDN) the Foreign Sanctions Evaders List (FSE), and/or the Non-SDN Iran Sanctions Act List (NS-ISA).

Despite this development, other sanctions on Iran have not been lifted, including those put in place because of Iran's support for terrorism, human rights abuses, and proliferation of weapons of mass destruction (WMD).

It is, therefore, vital that your business is familiar with the details of the sanctions and embargoes imposed on Iran by the United States Department of Treasury Office of Foreign Assets Control (OFAC). Companies and individuals in breach of Iran 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.

For more information about our Visual OFAC software, visit our dedicated Visual OFAC site, call toll-free 1-877-328-7866 (Intl: 716-881-2590) and talk to one of our sanctions compliance consultants, or send an email.

What is prohibited under the Iran Sanctions?

While nuclear-related sanctions against Iran have been lifted, primary U.S. Sanctions remain in place as well as the U.S. domestic trade embargo on the country. With limited exceptions, U.S. persons and U.S. companies are still broadly prohibited from engaging in transactions with Iran, its financial institutions or its government under Executive Order 13599 and section 560.211 of the ITSR, unless these transactions are exempt from regulation and expressly authorized by OFAC.

U.S. persons are still required to block the property and interests in property of all individuals and entities of the Government of Iran or an Iranian financial institution, whether or not the individual or entity has been identified by OFAC on the E.O. 13599 List. In addition, non-U.S. persons are still prohibited from knowingly engaging in conduct that seeks to evade U.S. restrictions on transactions or dealings with Iran or that causes the export of goods or services from the United States to Iran. Any exemptions need to be expressly authorized by OFAC.

Goods and Services

Under the Iran sanctions, 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.

Under a general license, however, the United States has authorized the importation of Iranian-origin carpets used as wall hangings classified under chapter 57 or heading 9706.00.0060 of the Harmonized Tariff Schedule; and foodstuffs including pistachios and caviar, intended for human consumption that are classified under chapters 2-23. Such items will still be subject to all other laws and regulations applicable to goods imported into the U.S, including generally applicable laws and regulations administered by other U.S. departments and agencies.

Oil and Gas

Under the Iran sanctions, 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

Under the Iran sanctions, 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 to the Iran Sanctions

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 Iran 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 Iran sanctions?

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 with the Iran sanctions 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

The United States has had Iran sanctions in place 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 +