METI (the Ministry of Economy, Trade and Industry) announced two amendments to the export control regulations on 1 July 2019.
On 3 July 2019, Baker McKenzie held its latest webinar looking at the impact of the United States’ withdrawal from the JCPoA, titled “What happens if the JCPoA collapses?“. In the webinar, Baker McKenzie experts from London, Dusseldorf and Washington provided a recap of the current position, before going on to ask how UN and EU sanctions on Iran could be re-imposed and what this would mean in practice.
The slides for the session can be accessed here. EU based clients are encouraged to consider the status of their Iran transactions, any “snapback” language in contracts with an Iranian nexus, and whether they can lobby their government to preserve sanctions relief or protect contracts.
For additional information, please contact Ross Denton, Anahita Thoms, Ben Smith or Inessa Owens (details on slide 33).
The US Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued an interim final rule effective June 21, 2019 amending the Reporting, Procedures and Penalties Regulations, 31 CFR Part 501 (the “RPPR Rule”), to add new requirements for reporting blocked or unblocked property and rejected transactions. The new reporting requirements apply to any US person (or person subject to US jurisdiction). Importantly, the rejected transaction reporting requirements, which previously applied to funds transfers rejected by financial institutions, now apply in the context of potentially any business transaction. This change could have significant implications for some companies in terms of compliance responsibilities and the need for related internal controls. The RPPR Rule does not provide much detail on the circumstances that would trigger the new reporting requirements in the context of the enumerated categories of transactions.
OFAC also added certain informational requirements for reports to clarify upfront the details needed to fully identify blocked or unblocked property and rejected transactions, and determine the authority under which they were blocked/unblocked/rejected. In announcing the RPPR Rule, OFAC indicated that in the past, these clarifications could sometimes require multiple time-consuming communications between OFAC and the submitter.Read more…
On June 24, 2019, the President issued Executive Order 13876, “Imposing Sanctions With Respect To Iran” (“EO 13876”), which specifically imposes sanctions on the Supreme Leader of Iran (currently, Ayatollah Khamenei) and the Supreme Leader’s Office (“SLO”), authorizes the future designation of persons appointed by, or providing support to, the SLO, and designates certain additional senior Iranian Revolutionary Guard (“IRGC”) commanders. While a politically significant and symbolic move, by itself this latest action is unlikely to have much practical impact, except to increase the risk, yet again, of secondary sanctions for non-US parties (particularly financial institutions) that engage in transactions with the targeted parties.