United States: New US Sanctions Against Iran: Implications For Both US And EU Companies

Last Updated: June 15 2012
Article by Miriam Gonzalez

Over the course of the past month, the United States has announced a number of significant new measures that expand US sanctions against Iran. What is significant about these new measures is that they explicitly target certain activities of non-US companies as well as US companies.

Businesses on both sides of the Atlantic therefore need to be up-to-speed with the new measures and the implications on their commercial activities.

Senate Bill

At the beginning of this week, the US Senate approved a new package of sanctions on Iran (the Bill). The Bill now needs to be reconciled with the House of Representatives before it is signed into law by President Obama.

Key provisions of the Bill include:

  • Liability of US Firms for Activities of their Foreign Subsidiaries: The Bill requires the imposition of civil penalties of up to twice the amount of the transaction on US parent companies for the activities of their foreign subsidiaries which, if undertaken in the US or by a US person, would violate US sanctions law.
  • Mandatory Disclosure of Iran-related Activity to the Securities and Exchange Commission: The Bill requires firms whose stock is traded on US exchanges to disclose whether they or their affiliates have engaged in activities which may be subject to sanctions under US law.

US parents are therefore likely to need to carefully consider the activities of their foreign subsidiaries. Likewise, foreign subsidiaries will need to consider their position and should seek legal advice as to ensuring compliance with US sanctions provisions.

Any US listed company will also likely need to consider the new disclosure requirements. Are you fully up to speed with the activities of your affiliates? How do you verify information provided by your affiliates?

Executive Order 13608

On 1 May 2012, President Obama issued an Executive Order (the Order) that punishes foreign parties seeking to evade Iran and Syria sanctions by barring such parties, termed "sanctions evaders", from engaging in any commercial interactions with US parties and from entering into the United States or its territories.

The Order therefore applies to any activity by non-US persons that violates US sanctions against Iran and Syria, as well as conduct by non-US persons that, while not directly violating US sanctions measures, causes others to violate those sanctions. Non-US parties may therefore violate US sanctions laws and regulations when they cause or procure a violation of such laws or regulations by a US person.

The Order significantly increases the breadth and potential impact of US sanctions against non-US entities that are doing business with Iran and Syria by threatening isolation from US markets.

The Order also adds significant additional risk to non-US companies and persons that engage in ongoing dealings with Iran or Syria that could have some nexus to the US market.

Key Considerations

  • For non-US companies, the provisions of the Order should be borne in mind when balancing considerations of the importance of the US market against business opportunities involving Iran or Syria.
  • For US companies, the Order requires heightened awareness of the risks of dealing with otherwise legitimate non-US business partners that in turn do business in Iran or Syria. What due diligence do you conduct on your partners?
  • How are you assessing whether any of your affiliates are doing business with Iran or are indirectly connected to or associated with a sanctioned entity or individual?
  • For US parents, are your European subsidiaries aware of US sanctions requirements and how they ensure compliance?
  • For EU subsidiaries, are you up to speed with US sanction provisions? What compliance systems, policies and procedures do you have in place to ensure compliance? Do you screen against both EU and US sanction lists?

As it is such a common stumbling block, it is also worth noting that it is a common mistake for businesses to believe that if you are based in the US, you only need comply with US sanctions and likewise, if you are in the EU, only EU sanctions apply. This is not the case.

US sanctions prohibit transactions by US citizens regardless of where they are located. Similarly, EU sanctions will apply to entities incorporated in any EU member state, all individuals and entities within the EU and again, all EU citizens regardless of where they are located.

Businesses with an international presence or whose employees travel for business therefore need to carefully consider their position.


Since 1995, the US has maintained comprehensive sanctions against Iran which prohibit US companies and US persons from exporting, importing, or investing in Iran.

EU sanctions against Iran are intended to persuade Iran to comply with its international obligations and to constrain its development of sensitive technologies in support of its nuclear and missile programmes. EU measures both implement UN sanctions resolutions and include additional autonomous EU measures.

The most recent EU sanctions against Iran entered into force in January and March of this year and predominantly focus on restricting EU activity with Iran's crude oil, petroleum and petrochemical industry. For more information, see our February DechertOnPoint " EU Sanctions Against Iran" and March DechertOnPoint " The Expansion of EU Sanctions".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Pinsent Masons LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Pinsent Masons LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions