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On July 27, 2017, the U.S. Congress sent to President Trump’s desk a bill that imposes new financial sanctions against Russia, Iran, and North Korea. It appears nearly certain that the president will sign that bill, now called the “Countering America’s Adversaries Through Sanctions Act” (CAATSA). Edit: President Trump signed the bill on August 2, 2017.
Continue Reading In the Chaos of (Trade) War, Where Does Your Company Find Peace?

As a candidate for President, Donald J. Trump was widely reported to despise the Iran nuclear agreement, which is known as the Joint Comprehensive Plan of Action. As President, he responded to reports of Iranian missile tests by putting Iran “on notice.” While observers have speculated whether that portends a naval escalation in the Persian Gulf or the Gulf of Aden, or perhaps some form of probation, the most likely next steps in our view will not include tearing up the nuclear agreement.
Continue Reading Predicting the Unpredictable: Will President Trump Tear Up the Iran Nuclear Deal?

  • A President Trump will have authority to reinstate sanctions lifted by the Iran Nuclear Deal as well as revoke certain authorizations provided for business with Iran.
  • Several economic and geopolitical factors may cause Mr. Trump to reconsider or mitigate his approach to the Iran Nuclear Deal.
  • Companies should prepare to respond quickly to any changes.

Maybe you’ve seen it before, the series of characters that represents upsetting the whole game, flipping the table:

(╯°□°）╯︵ ┻━┻

These days, where words fail, we have emojis.  And here they describe what a President Trump may do to the carefully planned Iran Nuclear Deal. One year after the implementation of the Iran Nuclear Deal (much discussed, at least in our blog), Mr. Trump will take office. At that time, we will see whether his campaign rhetoric against Iran becomes policy action or whether it will be tempered by geopolitical and business realities.Continue Reading The Table Flip: Trump, the Iran Nuclear Deal, and American Business

Article Highlights:

  • Non-U.S. banks can do business with Iran and continue their relationships with U.S. banks.
  • Non-U.S. companies may use proceeds from Iran transactions more freely, including in the United States.
  • OFAC draws a clearer line with respect to the use of Iran-related funds.

After the Iran nuclear agreement, as non-U.S. companies entered into newly-permitted business in Iran, they faced the difficult question of where they could put the money from their Iran business. U.S. law still prohibits U.S. persons (including U.S. banks) from conducting most business with Iran. Among other rules, OFAC regulations and guidance provided that “Iran-related” funds could not transit the U.S. financial system. But the guidance did not state clearly what constituted “Iran-related” funds. For that reason, foreign financial institutions (FFIs) hesitated, even feared, to process Iran-related transactions because of the risks of sending Iran-related funds into the U.S. financial system in violation of U.S. sanctions. However, a new clarification in the OFAC guidance could change all of that (and change it in the way we proposed right here in this blog[1]).Continue Reading Those Three Little Words: OFAC’s Subtle Language Shift Could Create Sweeping Change on Iran Investment

On July 29, 2016, the U.S. Treasury Office of Foreign Assets Control (OFAC) cleared the runway for non-U.S. operators of civil aircraft to send flights into Iran. New  “General License J” authorizes many Boeing, Airbus, and other civil aircraft containing U.S.-origin materials to fly to Iran on “temporary sojourn.” The General License provides a great opportunity for non-U.S. aircraft owners and operators. However, a series of complex conditions may complicate ground handling agreements, damp or dry lease arrangements, code sharing, or other transactions related to providing service to Iran.
Continue Reading Layover in Tehran: United States Authorizes Carriers to Land Civil Aircraft in Iran

In late May, The Russian Federation issued its first sovereign bond since the Ukraine crisis in 2014. The sole organizer of the bond is VTB Capital, an arm of VTB Bank, Russia’s second largest financial institution. Both VTB Capital and VTB Bank are subject to sectoral sanctions.

According to published reports, the 10-year bond is being offered at yields of 4.65-4.9 percent. Russia’s goal was to raise $3 billion to help with its budget deficit caused by weak oil prices. Reportedly, the bond generated $7 billion of demand, though the Russian finance ministry announced only $1.75 billion in sales. Foreign investors constituted more than 70% of the bond purchasers. According to media reports, large global banks declined to participate, partly due to sanctions compliance risks. But as we will see, the compliance risks aren’t very clear. We will examine the exact risks and evaluate the question of why banks might be over-complying.Continue Reading Buying Russian Bonds: Risky Business or Safe Bet?

On June 20, 2016, you will be able to take a non-stop flight from Tehran to Paris . . . but you probably shouldn’t.

According to its website, the Iranian airline Mahan Air will add the City of Lights to the list of European destinations it is already serving, including Athens, Copenhagen, and Dusseldorf. What makes the current and proposed Mahan routes interesting to regulatory experts (read: nerds) is that Mahan Air is on the U.S. Treasury’s Specially Designated Nationals (SDN) list. According to the Treasury’s Office of Foreign Assets Control (OFAC), Mahan Air has moved troops and equipment for the Iranian Revolutionary Guard Corps and has provided support and transport to the Assad regime in Syria.Continue Reading Flying the Too-Friendly Skies? Europe Opens Routes for Sanctioned Iran Airline

Highlights:

  • Sanctions relief presents new business opportunities with Iran
  • Most U.S. companies are still prohibited from Iran business, but the U.S. government is encouraging lawful business by non-U.S. companies
  • The line between permitted and prohibited financial transactions by non-U.S. banks is not clear
  • Careful advice of counsel is critical

Continue Reading New Business Opportunities in Iran! But Who Will Be Your Banker? Non-U.S. Banks Hesitant to Process Lawful Iran Transactions…and for Good Reason

On January 16, 2016, two NFL playoff games and a historic revision of U.S. foreign policy took place. Many of us enjoyed the first two (did you see that last-second touchdown pass?!) but did not pay close attention as the United States lifted many of its secondary sanctions against Iran. Even those normally attentive to sanctions news had already heard (including by reading and excitedly discussing this blog) that things were not going to change that much for U.S. persons.
Continue Reading Airplanes, Pistachios, and a New Burger Joint in Tehran: What Changes for the United States Under Lighter Iran Sanctions