International Trade

  • Boeing announces deal to sell aircraft to Iran Aseman
  • The deal was apparently authorized by the U.S. Treasury Department, but Congressional foes fight to block it
  • If the deal goes through, further loosening of sanctions could follow

This story begins in July 2015, when the United States and its allies entered into a now-famous nuclear agreement with Iran which, among other things, paved the way for the United States to scale back economic sanctions on Iran – including those relating to commercial aircraft.  Executing that deal, in January 2016, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued a new, favorable licensing policy for many transactions relating to the sale of commercial passenger aircraft and related parts and services to Iran.Continue Reading The Long Road: Boeing Continues the March into Iran

  • One of largest export and sanctions penalties ever imposed
  • Reminder of U.S. government’s broad jurisdiction over export and sanctions matters
  • Cooperation could have helped ease the penalty significantly

On March 7, 2017, Chinese telecommunications company, Zhongxing Telecommunications Equipment Corp. (ZTE), signed on to three separate settlement agreements with the United States, agreeing to pay $892 million for violations of U.S. sanctions and export controls. Even more could be due if ZTE strays from the commitments it has made under the settlement agreements.  This is one of the largest penalties ever imposed by the U.S. government for export and sanctions violations.

It is impossible in the space of this blog article to provide a detailed summary of this matter.  In addition, while the details of the matter would make good copy, we think (hope!) that this is something of an isolated incident.  At the same time, we think several lessons can be derived from this action.Continue Reading Lessons from the Historic ZTE Enforcement Action

  • Canadian bank pays penalties for U.S. dollar transactions involving Cuba and Iran
  • Bank receives Finding of Violation – but no penalty – for violations by European subsidiaries
  • Disclosure and cooperation with OFAC mitigated penalties

Earlier this month, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $516,000 settlement with a large Canadian bank for allegedly violating U.S. sanctions against Iran and Cuba 167 times. OFAC also issued a separate finding of 3,491 additional violations by two of the bank’s European subsidiaries – an investment services company and another small bank.  Yet OFAC imposed no penalty for the subsidiaries’ alleged violations.Continue Reading OFAC Sanctions: No Entity Too Small or Too Far for Enforcement

Effective December 23, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the Iranian Transactions and Sanctions Regulations (ITSR) to expand the scope of medical devices that can be exported to Iran.

Now, unless specifically excluded by ITSR section 530(a)(3)(ii)-(iv), an item that qualifies as a “device” under section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 321) and is designated EAR99 (or would be if it were located in the United States) can be exported or re-exported to Iran without specific authorization from OFAC.  (Previous restrictions on payment terms and shipping dates remain in effect.)Continue Reading Happy New Year: OFAC Expands Exports of Medical Devices to Iran

In what may be a harbinger of things to come, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has issued new guidance regarding what may occur if the United States re-implements economic sanctions against Iran that were scaled back following the July 2015 nuclear deal (the Joint Comprehensive Plan of Action or JCPOA). That guidance, in the form of two amended Frequently Asked Questions (M.4 and M.5, available here), makes clear that:

  • the United States will not retroactively impose sanctions for legitimate activity undertaken prior to any sanctions snapback;
  • continuation of previously legitimate activities following snapback could be penalized; and
  • the U.S. government intends to provide a 180-day period to wind down Iran business that was consistent with the lifting of U.S. sanctions under the JCPOA.

Continue Reading Happy (End of the) Holiday: OFAC Signals Potential Iran Sanctions Snapback

As a follow-up to a previous article, we’ve authored further details about the actions a company should take to respond to a discovered violation of U.S. sanctions. As pointed out in our article, while each enforcement action is different, “a company should consider their response to an OFAC violation an opportunity to attempt to mitigate…

We recently authored an article outlining steps a company should take to respond to a U.S. sanctions violation. The following actions are recommended:

  • Implement immediate remedial actions
  • Decide whether to self-disclose
  • Scope the internal investigation
  • Take corrective action
  • Negotiate with OFAC

The full article, “Responding to an OFAC Violation,” was published by Lexis Practice Advisor®.…

  • U.S. oilfield services company pays $25 million for violations involving senior managers.
  • Aggressive enforcement continues even though restrictions have been eased.
  • It can take a long time to settle violations of U.S. sanctions and export issues.

Lest U.S. companies think that Cuba and Iran are entirely open for business, a U.S. government settlement announced earlier this month with National Oilwell Varco, Inc. (NOV), a U.S. oilfield services company, will serve as a stark reminder both of existing restrictions and – especially – the U.S. government’s intent to enforce those restrictions aggressively.  (Even if doing so takes a long, long time.)Continue Reading Still Serious About Sanctions: OFAC Settles Violations Involving Cuba and Iran

I will be co-hosting a webinar on Tuesday, November 29 on compliance challenges under the Export Administration Regulations (EAR) and International Traffic in Arms Regulations (ITAR). Key topics that will be covered in this webinar include ITAR and EAR amendments and new rules; jurisdiction and classification; licensing, agreements, and exceptions; effective compliance practices; recent enforcement;…

Over the past year, the big news for companies doing or considering business in Iran has been the scaling back of U.S. and EU economic sanctions. Many global businesses are now permitted to operate in this once prohibited market. Before we celebrate too enthusiastically, however, let’s stop for a moment to consider a potential challenge for some companies trying to capitalize on this new opportunity.

This time, we are focusing on a conundrum specific to companies that contract with the U.S. government.Continue Reading Iran on Your Mind? The FAR Should Be, Too.

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

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