Iran is a market of 90 million with a young population. In addition to agricultural products, medicine and medical devices, the U.S. Government has opened up certain Iranian industries to U.S. businesses and foreign entities owned and controlled by U. S. parties can now do business with Iran. However, there are still restrictions not allowing the the involvement of U.S. parties. There are two things you need to do.
- Get it in writing – get a current legal opinion explaining what you can and can’t do. Get the details. Make sure you explore all aspects of a transaction from marketing, to financing, transportation, and insurance. Some activities are incidental to approved actions, others are not. All parties must be screened and U.S. and foreign entities should be reviewed separately.
- Document decisions that you make and why you made them. Ensure you know all the parties involved and their nationalities. Make sure employees and related parties know the legal limits. Also protect yourself and your company from anti-corruption compliance problems with some written diligence.
Most of the sanctions relief implemented on January 16th, 2016 relates to what are known as “secondary sanctions” or those sanctions imposed by the U.S. Government against non-U.S. Persons. U.S. parties are still prohibited from entering into most activities with Iran. Note that this is not so for other countries who have lifted most, if not all, of their Iranian sanctions under the recent negotiations.
The following changes have been made to the primary U.S. sanctions affecting U.S. Persons:
- OFAC has issued a General License allowing the importation of Iranian-origin carpets and certain foodstuffs, including pistachios and caviar into the U.S. OFAC will be publishing a corresponding final rule adding this authorization to the Iranian Transactions and Sanctions Regulations.
- With the issuance of a favorable licensing policy, OFAC has opened the Iranian commercial airline market to U.S. Persons. U.S. persons can now apply for Specific Licenses on a case-by-case basis for sales, leases, exports, re-exports and other associated activities. Conditions may apply with the issuance of any license and transactions involving any Specially Designated Nationals (“SDN’s”) are still prohibited. Such a license does not negate any analogous Department of Commerce licensing requirements.
- OFAC has issued General License H (“GL H”) which authorizes U.S.-owned or -controlled foreign entities to engage in activities involving Iran in which the U.S. parent does not participate. However, such activities can still not involve the U.S. financial system or other U.S. goods or services.
- OFAC will continue to remove certain entities off restricted parties lists as appropriate and publish more information as the situation continues to evolve. U.S. Persons should continue to complete their restricted parties due diligence as always to maintain compliance in this changing environment.