The recent easing of sanctions against Iran by the European Union and, to a lesser extent, the United States has implications for businesses around the world. Non-US businesses will likely benefit more because the United States has kept in place most of its primary sanctions on US persons while dropping most of its secondary sanctions on non-US persons. The asymmetrical relaxation creates a regulatory minefield for both non-US persons who want to resume business in Iran but have US shareholders or depend on US goods, services, or technology, as well as US persons who must sit on the sidelines except in certain limited industries.
Morgan Lewis lawyers have written LawFlashes on the effects of Iran sanction relaxation on:
Led by Washington-based partner Margaret Gatti and Boston-based partner Carl Valenstein, our international trade, national security, and economic sanctions team guides clients through proceedings at the Directorate of Defense Trade Controls (DDTC), US Bureau of Industry and Security (BIS), Office of Foreign Assets Control (OFAC), US Customs and Border Protection (CBP), and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE). We advise US and international companies on the worldwide application and jurisdiction of US unilateral and multilateral embargoes and sanctions.
We assist in areas such as:
Our lawyers conduct compliance investigations and lead clients through the OFAC, EAR, and ITAR voluntary disclosure procedures. We also offer insights on export reform and a variety of sanctions programs, including the country sanctions programs related to Iran, Cuba, Russia, and Syria. Learn about our complete offering by visiting our International Trade, National Security & Economic Sanctions page.
Margaret and Carl recently talked about what distinguishes our international trade, national security, and economic sanctions practice and how the team is helping clients address their international compliance needs.
What is the geographic reach of the group? What other teams do you work closely with?
The geographic reach of the group is worldwide and, lately, we have seen the most work coming out of sanctions on Iran, Russia, and Cuba. We support not only our domestic US transactional and finance lawyers but also the lawyers in our non-US offices, which forces us to operate in different time zones. While we principally advise on US law, we have members of our group who are qualified to advise on European law as well.
What are the key strengths differentiating your practice?
We pride ourselves on being responsive and practical in our approach. Collectively, we have decades of experience in all areas of international compliance and, because the statutes and regulations in this area are often unclear, there is no substitute for hands-on experience with all of the relevant US agencies involved.
What are some of the hidden liabilities clients should be aware of in this area?
Non-US clients often underestimate the reach of US law in this area and US clients underestimate the complexity of the rules that apply to their activities. In some cases, the prohibitions are clear, but in other cases we are helping clients manage the risks they are assuming by moving forward when the regulations are unclear.
What front-line issues have your clients faced?
We have been very active representing clients in the travel industry with respect to providing services to Cuba. This is one area that has really opened up in the past year whereas other areas, such as investment in domestic Cuban infrastructure, are still prohibited by statute until there is regime change in Cuba and the US claims for confiscated property have been settled. Much of the Cuban embargo is codified by statute and will likely only be modified after the US presidential election [in November 2016] and, possibly, may depend on which [political] party wins.
We have also been very active in advising US companies on what they can and cannot do with respect to the plans of their non-US subsidiaries or affiliates to resume business in Iran. This is a tricky area because US persons remain subject to the anti-evasion and anti-facilitation rules. Because Dubai has historically been the gateway to Iran, this work has involved close coordination with our Dubai office.
Finally, the Ukraine-related sanctions on Russia continue to provide a significant amount of compliance work and we work closely with our Moscow office on such matters. The Russian sanctions are interesting because, while there is a complete prohibition on doing business with certain specially designated nationals or blocked persons, there are other sectoral sanctions that prohibit only certain kinds of debt, equity, and other transactions.