Primary Sanctions

The Iranian Transactions and Sanctions Regulations (ITSR) prohibit, among other things:

  • the export, reexport, sale, or supply, directly or indirectly, from the US or by a US person, wherever located, of any goods, technology, or services to Iran; and
  • the facilitation by a US person of transactions by a foreign person that they would otherwise be prohibited from engaging in under the ITSR. 

The prohibitions in the ITSR also apply to foreign entities owned or controlled by a US person.

Recent Changes:  The Reimposition of Sanctions for Iran after JCPOA Withdrawal

On May 8, 2018, President Trump announced the US would withdraw from the Joint Comprehensive Plan of Action (JCPOA) and re-impose nuclear-related sanctions against Iran.  The general embargo prohibiting exports of goods and services from the US or by a US person to Iran or a third country if specifically intended for Iran remained in effect following the implementation of the JCPOA and remains in place today.

The key changes include the following:

  • Revocation of General License H.  General License H has been fully revoked.  Entities owned or controlled by a US person (i.e., foreign subsidiaries of US companies) are once again subject to the general embargo.
  • Revocation of the Statement of Licensing Policy and General License I related to civil aviation.
  • Reimposition of “secondary sanctions.”

Secondary Sanctions

SDNs:  OFAC may impose sanctions on persons, including non-US persons, determined to have provided material support for or goods or services to or in support of an Iranian SDN. 

Sectors:  Secondary sanctions are authorized against non-US persons for activity in several key sectors of the Iranian economy, including:

  • acquisition of US dollar banknotes by the government of Iran;
  • Iran’s trade in gold or precious metals;
  • the purchase or sale of Iranian rials, or the maintenance of significant funds or accounts outside the territory of Iran denominated in the Iranian rial;
  • the purchase, subscription to, or facilitation of the issuance of Iranian sovereign debt;
  • the automotive sector of Iran;
  • port operators, and the energy, shipping, and shipbuilding sectors of Iran;
  • petroleum-related transactions and the purchase of petrochemical products from Iran;
  • the provision of specialized financial messaging services to the Central Bank of Iran and certain other Iranian banks; and
  • the provision of insurance and related services.

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