Non-US Companies Face Challenges As US Sanctions On Iran Return

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Shearman & Sterling LLP

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The U.S. exit from the Iran Deal and the return of U.S. sanctions on Iran will impact companies located around the world, particularly if they conduct some part of their business in the U.S. Partner Philip Urofsky...
United States Corporate/Commercial Law

The U.S. exit from the Iran Deal and the return of U.S. sanctions on Iran will impact companies located around the world, particularly if they conduct some part of their business in the U.S. Partner Philip Urofsky (Washington, D.C.-Litigation) and Of Counsel Danforth Newcomb (New York-Litigation) look at which companies will be most affected and how they could respond.

While some companies can choose not to use U.S. parts or employees, "other companies, particularly financial companies, may have a lot of exposure to the United States because they do a lot of U.S. dollar business and therefore need to be able to access the U.S. financial system," Philip explains on the NPR radio program, Marketplace.  He notes that certain non-U.S. companies which require U.S.-made parts, or have a presence in the U.S., may have challenges.

Large non-U.S. companies like these and others, which are connected to the U.S. market and have been invested in Iran since the establishment of the 2015 nuclear deal, would have to consider the implications of a disentanglement from the U.S.

A large multinational manufacturer, for example, "would have to strip out all the U.S. components [in their products]. I don't know whether that's technically possible, but I think it would be very, very difficult," Dan explained in an interview on NPR radio program, Morning Edition

However, there is still the question of whether and to what extent the U.S. would apply threatened sanctions on non-U.S. companies which continue to do business in Iran, Dan says, noting that sanctions were judiciously applied even when they existed prior to 2015.

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.

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