Worldwide: Enforcement Trends: Sanctions And International Risk (Transcript)

I'm Alex Rene, partner in Ropes & Gray's Government Enforcement group in Washington, D.C. Today I'm joined by Government Enforcement counsel Mike Casey. Today's podcast is part of a series of Capital Insights podcasts we're hosting to examine the issues and potential regulatory and enforcement changes emanating from Washington D.C. as we transition to a new political administration.

In this podcast we're going to discuss the sanctions environment. Our conversation will be informed by publicly available statements, past behavior and general trends we've observed in the international risk and sanctions space.

With any administration change there is some level of uncertainty and no way to perfectly predict the future. Today we will make our best predictions with currently available information. We'll begin this podcast by discussing economic sanctions.

The U.S. and EU lifted a number of sanctions against Iran as part of its obligations under the Joint Comprehensive Plan of Action, also known as the JCPOA. Mike, how do you expect the situation with Iran will look under a Trump Administration?

Mike: During the campaign, Mr. Trump was very critical of both President Obama's approach towards Iran and also the JCPOA. Once Mr. Trump becomes president in January he will have the authority to unilaterally end the United States' participation in the JCPOA because the JCPOA is a framework agreement and not a treaty. While Mr. Trump will have the power to do so, I think it's unlikely that he will choose to go down that route. The United States has negotiated the JCPOA with five other countries, all of which seem to want the JCPOA to continue. In order to end the U.S.'s involvement in the JCPOA, Mr.

Trump would need to burn a lot of diplomatic capital and upset some key U.S. allies, which I don't think he's going to be willing to do.

In my mind, a more likely outcome would be for Mr. Trump to undo certain aspects of the sanctions relief that the U.S. provided to Iran as part of the JCPOA. So, for example, the Trump Administration could revoke General License H, which is a general license issued by OFAC that allows foreign entities owned or controlled by U.S. businesses to engage in certain types of business with Iran. This act would have symbolic value and it also could have some very significant, real-world consequences for foreign subsidiaries of U.S. companies and foreign portfolio companies owned by U.S. private equity sponsors.

Because many of these types of foreign entities have spent significant time and money during the course of the last year developing relationships in Iran, have established policies and procedures so that their dealings with Iran comply with General License H, and some of them have even made capital investments in Iran.

Alex: But Mike, Trump could also accuse Iran of violating its obligations under the deal. In August of 2015 the President Elect promised to "police that contract so tough that they don't have a chance."

Violations by Iran of its obligation under the JCPOA could result in the so-called "snap-back" of U.S. sanctions that were in place prior to January 2015. Isn't that correct?

Mike: That is correct. The conventional wisdom is that the Obama Administration has not taken a particularly hard line in monitoring Iran's conduct during the last year or so. So, for example, when IAEA monitors discovered that Iran held more heavy water than it was supposed to under the terms of the JCPOA, the Obama Administration agreed to buy some of it so that Iran's stockpile fell below the amount specified in the JCPOA.

Similarly, the Obama Administration took the position that Iran did not violate its obligations under the JCPOA when it engaged in ballistic missile testing. If President Trump's actions end up being consistent with candidate Trump's statements, I think we can expect the United States to be less generous in assessing Iran's compliance with the JCPOA in the future, which could result in the "snap-back" of various U.S. sanctions.

Alex: Let's turn to Russia. After Russia invaded the Ukraine in March of 2014, the U.S. and the EU imposed new sanctions on certain individuals in Putin's inner circle as well as sectoral sanctions on Russian financial institutions, defense companies, and oil and gas companies. What do you think will happen with these sanctions and do you think these policies regarding Russia will change under the Trump Administration.

Mike: I believe the United States will terminate its sectoral sanctions targeting Russia for at least a couple of different reasons. First, the European Union has maintained its own sectoral sanctions targeting Russia, and those sanctions are scheduled to expire in January. In order for those sectoral sanctions to continue after January, all 28 member states of the EU would need to vote in favor of renewing them, which seems unlikely at this point. Over the course of the last two years, the U.S. and EU have moved in lockstep with respect to Russian sanctions. If the EU ends their sectoral sanctions program, then I think it's more likely the United States will as well.

In addition, Mr. Trump has expressed a desire to "reset" relations between the United States and Russia. During the campaign, he made several flattering statements about Mr. Putin and Mr. Putin seems to have admiration for Mr. Trump as well. If Mr. Trump were to lift the sectoral sanctions, that would be a clear signal from the Trump Administration to Russia that the United States is going to take a different approach towards Russia on a going-forward basis.

Alex: Let's talk a little bit about Cuba. The Obama Administration has reversed a policy that was in place for the last fifty years and has taken steps to relax the Cuban embargo. What might we see from the Trump Administration with regards to Cuba?

Mike: During the presidential campaign, Mr. Trump made a series of statements regarding Cuba. In one of those statements, he pledged to "reverse" President Obama's executive orders that relaxed U.S. sanctions targeting Cuba. If Mr. Trump were to follow through with this promise once he becomes President, the change in policy would create difficulties for U.S. citizens, many of whom have taken advantage of the change in policy to travel to Cuba. And it would also create some problems for U.S. companies—in particular companies operating in the aviation and hospitality sectors—that have already started doing business in Cuba.

Again, it is hard to know exactly how this is going to play out because we're not sure how strictly Mr. Trump plans to follow through with his promises with respect to Cuba once he takes over in January.

Alex: That's true. We do not know how he's going to follow through but a hallmark of Trump's presidential campaign was his criticism of foreign governments and foreign companies' involvement in the U.S. economy. Now that he has been elected, do you foresee him trying to address those issues from a regulatory perspective?

Mike: It's a good question. As a general matter the U.S. government has increasingly scrutinized foreign investment in the United States during the last decade, most notably through the CFIUS review process. CFIUS is an inter-agency government committee that has the authority to review any transactions that could result in a foreign person obtaining control of a U.S. business. Most people expect that CFIUS will become even more aggressive in reviewing so-called "covered transactions" in the future for a couple different reasons. First, during the last few months, some members of Congress have sought to increase the scope of CFIUS' power. They feel that CFIUS currently doesn't have the authority it needs to review all transactions involving foreign investment that could have potentially damaging implications on U.S. national security.

In addition, as you alluded to Alex, Mr. Trump frequently criticized foreign investment and the effect of foreign investment on the U.S. economy during the presidential campaign. One way in which his administration could make it harder for foreign parties to invest in the United States would be to either increase the power of CFIUS or mandate more aggressive reviews of covered transactions.

As I mentioned, CFIUS has gotten most of the attention in this area but they are not the only government agency involved in either monitoring or requiring disclosure of foreign investment in the United States. For example, both DSS within the Department of Defense and BEA within the Department of Commerce could too adopt a more aggressive approach to reviewing and requiring disclosure of foreign investment in the United States.

Alex: Thank you, Mike, for you insights. And thank you all for listening. Please visit our newly-launched " Capital Insights" page for additional news and analysis about noteworthy enforcement and regulatory issues.

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

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

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.