Iran Trade Sanctions — OFAC Rules

Iran trade sanctions under the Iranian Transactions and Sanctions Regulations (ITSR) broadly prohibit U.S. persons from exporting, importing, or facilitating trade in goods, services, and technology with Iran. The embargo covers virtually all categories of goods, with narrow exceptions for humanitarian goods, informational materials, and certain licensed transactions. Non-U.S. companies also face secondary sanctions risk for significant Iran trade.

Iran Trade Sanctions: What Is Permitted and What Is Prohibited

The United States has long used sanctions as a tool to influence the domestic and foreign policies of other nations. Among the most stringent are the trade sanctions on Iran, aimed at curbing its nuclear ambitions and other activities deemed threatening to international peace and security. These sanctions, enforced by the Office of Foreign Assets Control (OFAC), significantly impact various sectors of the Iranian economy. 

Because of the complexity of these regulations and their far-reaching implications, individuals and entities seeking to navigate this legal landscape are strongly advised to consult with experienced OFAC lawyers who can provide detailed guidance on Iran sanction laws and programs.

Iran Trade Sanctions

The US trade sanctions on Iran are among the most comprehensive and stringent in the world. These sanctions prohibit a wide range of activities, including importing, exporting, and providing or receiving services to or from Iran. The primary legal frameworks governing these sanctions are the Iranian Transactions and Sanctions Regulations (ITSR) and the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA).

The ITSR is a set of regulations administered by the Office of Foreign Assets Control (OFAC) that governs financial and commercial transactions with Iran. These regulations prohibit U.S. persons and entities from engaging in various activities with Iran, including:

• exporting goods, services, and technology to Iran;
• importing goods and services from Iran;
• conducting financial transactions with Iranian banks and businesses;
• investing in Iran’s oil and gas sector.

CISADA is a federal law that expands the scope of US trade sanctions on Iran. It aims to pressure Iran to halt its nuclear program and support for terrorism by targeting its energy sector and financial institutions. CISADA includes provisions that:

• impose sanctions on foreign companies that invest in Iran’s energy sector;
• restrict access to the U.S. financial system for foreign banks that conduct transactions with designated Iranian entities;
• mandate the divestment of assets from companies that do business with Iran.

Under the current sanctions regime, certain goods and services cannot be traded with Iran. These include:

• military and dual-use items: goods that can be used for both civilian and military purposes;
• advanced technology: such as software and hardware that could be used in Iran’s nuclear or missile programs;
• financial services: including banking, insurance, and investment services.

Given the complexity and breadth of Iran trade sanctions, it is crucial for businesses and individuals to consult with experienced OFAC license lawyers before engaging in any transactions involving Iran. Legal experts can provide guidance on compliance with the OFAC sanctions of general and specific licenses, ensuring that all activities are conducted within the legal framework. 

Exceptions to Transactions

Despite the comprehensive nature of trade sanctions on Iran, the Office of Foreign Assets Control (OFAC) provides specific exceptions to facilitate humanitarian and other critical activities. These exceptions are designed to ensure that essential goods and services can reach the Iranian population without violating U.S. sanctions regulations.

1. Humanitarian aid: OFAC allows for the export of food, medicine, and medical devices to Iran. These exceptions aim to alleviate shortages and ensure that basic human needs are met. However, it is crucial to verify that the specific items being exported fall within the scope of the general licenses provided by OFAC.
2. Personal remittances: individuals are permitted to send money to family members in Iran under specific conditions. This includes transactions related to the remittance of personal funds, sales of property acquired in Iran prior to becoming a U.S. person, and the transfer of funds in relation to an inheritance from an Iranian person. These allowances help maintain familial support across borders.
3. Information and communication: OFAC permits the export of software and services that support the free flow of information. This includes certain communication devices such as mobile phones and laptops, as well as software that enhances communication and information exchange. These provisions promote freedom of expression and access to information for the Iranian population.

General License for Trade

General License H, issued by the Office of Foreign Assets Control (OFAC), was a significant authorization that allowed U.S.-owned or controlled foreign entities to engage in certain transactions with Iran that would otherwise be prohibited. This license aimed to facilitate limited business activities while maintaining the broader framework of U.S. sanctions against Iran.

However, with the re-imposition of nuclear-related sanctions, companies relying on General License H must now wind down their activities. This means that U.S. companies with foreign subsidiaries must ensure that all transactions are limited to permissible wind-down activities until the specified deadline. Accepting new customers or initiating new business ventures in Iran is strictly prohibited under the current regulations.

Legal experts at Sanctions Lawyers can provide guidance on compliance, help navigate the wind-down process, and ensure that all activities are conducted within the legal framework. Our team of seasoned OFAC lawyers is ready to provide the support and expertise required to navigate these challenging regulations.

Trade Sanctions Lawyer

Our law firm is dedicated to providing comprehensive support and guidance for clients dealing with U.S. trade sanctions on Iran. With extensive experience in handling complex international legal matters, our team of skilled attorneys is well-versed in the intricacies of the Iranian Transactions and Sanctions Regulations (ITSR) and the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA).

Our services include:

• advising on compliance with U.S. sanctions regulations;
• assisting with the application process for OFAC licenses;
• representing clients in enforcement actions and disputes related to sanctions violations;
• providing strategic guidance on permissible transactions and activities under general and specific licenses.

If you are facing challenges related to trade sanctions on Iran, our experienced legal team is here to help. Contact us today for expert assistance in navigating the complexities of U.S. sanctions regime.

Anatoly Yarovyi Senior Partner, Attorney-at-law, admitted to the Bar (Certificate to practice Law #701 as of 28.12.2009) Anatoly Yarovyi is a highly experienced lawyer with 20 years in the field, specializing in OFAC Sanctions, law enforcement, intelligence activities, International Public Law, and human rights. His current focus is on Sanctions and Interpol cases, as well as advising high-profile clients on personal and business security, data protection, and freedom of movement. Anatoly's diverse background includes roles in the Prosecutor's Office, intelligence agencies, and top multinational law firms. Phone: +357 96 447475 Email: [email protected] Book a call