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US Iran Sanctions significantly expanded by the enactment of the Iran Freedom and Counter-Proliferation Act of 2012
News & Insights 18 January 2013
On 2 January 2013, President Obama signed into the law the Iran Freedom and Counter-Proliferation Act of 2012.
On 2 January 2013, President Obama signed into the law the Iran Freedom and Counter-Proliferation Act of 2012 (the “IFCPA”). The IFCPA substantially expands the extra-territorial reach of US sanctions against Iran’s energy, shipping and ship-building industries. Most of the IFCPA sanctions become effective on 1 July 2013, 180 days after the date of enactment. There are several key provisions which should be noted:
- Section 1244: Broad new sanctions applicable to Iranian industries – This provision imposes several types of penalties on any person or entity who is determined after 1 July 2013, to be operating ports in Iran or part of the energy, shipping or shipbuilding sectors of Iran. Significantly, the IFCPA also requires the President to impose sanctions on those persons who facilitate or otherwise provide significant financial, material, technological or other support for, or goods or services in support of, any activity or transaction on behalf or for the benefit of these entities.
- Section 1246: Insurance of Iran related activities – This provision requires the President to impose sanctions on any person that knowingly provides underwriting services, insurance, or reinsurance for any activity that violates any US sanctions on Iran. The provision also allows the President to impose sanctions on any person with respect to the Iranian energy, shipping or shipbuilding activities for which sanctions are imposed under the previously mentioned Section 1244 or on any person designated for sanctions in connection with Iran’s proliferation of weapons of mass destruction or support for international terrorism. It is important to note that Section 1246 provides an exception for underwriters and insurance providers who exercise due diligence in establishing policies, procedures, and controls to prevent violations of Section 1246.
- Section 1245: Supply of metals to Iran – This provision requires the President to sanction any person or entity who, after 1 July 2013, provides to Iran precious metals, graphite, or raw or finished metals, including steel, aluminium, and coal.
- Section 1252: Report use of certain Iranian seaports by foreign vessels – This provision requires the President to submit a report to Congress by 1 July 2013, identifying large/significant vessels (including the names of their owners and operators) that have entered Iranian seaports in the preceding 180-day period controlled by the Tidewater Middle East Company, a Specially Designated National by the Office of Foreign Assets Control (OFAC) that is linked to Iran’s Islamic Revolutionary Guard Corps. To date, OFAC has not sanctioned any entities for doing business with Tidewater. The report implies that Congress intends to force the President to take action against foreign ship owners/operators still doing business with Tidewater.
The club will continue to monitor sanctions against Iran but members are similarly advised to closely monitor their development and implementation.