On August 10, 2012 the Iran Threat Reduction and Syria Human Rights Act of 2012 (“Act”) was signed into law by President Obama expanding US sanctions against Iran and Syria. In conjunction with the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (“CISADA”), the Act strengthens the Iran Sanctions Act of 1996 (“ISA”). The primary purpose of the Act is to prevent Iran from acquiring or developing nuclear weapons, continuing its support for international terrorism, or engaging in other activities designed to destabilize its neighbors in the region. The following summary will discuss the key implications of the Act for firms doing business with Iran.
First, the Act provides strong disincentives to non – U.S. firms to undertake the prohibited activities described below. Moreover, corporate officers and principals who violate the act also face sanction, including the possibility of restricted access to the United States.
Second, though not yet binding, the Act urges efforts by the United States to expand the UN sanctions regime. Specifically, the Act asks for:
1) The imposition of additional travel restrictions on Iranian officials responsible for human rights violations, the development of Iran’s nuclear and ballistic missile programs, and Iran’s support for terrorism; and
2) The withdrawal of sea- and airport landing rights for Iran Shipping Lines and Iran Air, for their role in nuclear proliferation and illegal arms sales.
Third, the Act places most of Iran’s energy, financial, and transportation sectors under U.S. sanction. Companies conducting business with Iran in these sectors face losing access to U.S. markets. Specifically, the Act expands the scope of prohibited activities and requires the imposition of sanctions against parties engaged in the following activities:
1) Joint Ventures Relating To the Development of Petroleum Resources
2) Transportation of Crude Oil From Iran;
3) Concealing the Iranian Origin of Crude Oil and Other Refined Petroleum Products;
4) Joint Ventures Relating to the Mining, Production, and Transportation of Uranium;
5) Provision of Underwriting Services or Insurance or Reinsurance; and
6) Purchase, Subscription to, or Facilitation of the Issuance of Debt.
Finally, the Act imposes broad sanctions on persons and firms which supply Iran with weapons and other technologies which the President determines are likely to be used by Iranian security forces to commit human rights abuses. For example, firms may not supply Iran with items such as weapons, rubber bullets, tear gas and other riot control equipment, and jamming, monitoring and surveillance equipment. Sanctions can include visa denial and frozen assets.
For further information or questions regarding the Act, contact Ronce Almond at (202) 457-7790.