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On August 1, the House and Senate approved the Iran Threat
Reduction and Syria Human Rights Act of 2012. The bill now goes to
President Barack Obama who is expected to sign it into law.
Once enacted, among many things, the Act would hold liable
parent companies for transactions with Iran by their foreign
subsidiaries. No later than 60 days after enactment, a partnership,
association, trust, joint venture, corporation, or other
organization owned or controlled by a U.S. person and established
and maintained outside the U.S. would be prohibited from knowingly
engaging in any transaction directly or indirectly with the
Government of Iran or any person subject to the jurisdiction of the
Government of Iran (e.g., Iranian companies or citizens) that would
be prohibited by the U.S. Iranian Transaction Regulations if the
transaction were engaged in by a U.S. person or in the U.S.
Once enacted, violators would be subject to civil penalties up
to $250,000 or an amount that is twice the amount of the
transaction that is the basis of the violation. Criminal penalties
include fines no more than $1,000,000 or imprisonment for not more
than 20 years, or both.
Once enacted, civil penalties will not be imposed on a
partnership, association, trust, joint venture, corporation, or
other organization, if the U.S. person divests or terminates its
business with the entity no later than 180 days. To avoid either
divestment or penalties, U.S. companies would need to review their
foreign subsidiaries' transactions and determine whether the
foreign subsidiaries are engaged in transactions that will need to
be terminated within the next 60 days.
Additionally on July 31, President Obama announced new U.S.
sanctions against foreign banks that handle transactions for
Iranian oil or handle large transactions from the National Iranian
Oil Company or Naftiran Intertrade Company. The White House
published a fact sheet outlining sanctions issued against Iran by
President Obama's administration.
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