11/18/2010 04:57:00 PM EST
U.S. and EU Restrictions on Doing Business with Iran
D. Herlach, Beverly J. Rudy, Christer L. Mossberg, Matthew L. Hazlett, Leanne
Sobel, Christina J. Galus and Inna Zaltsman
In recent months, there have been major developments
regarding the economic sanctions imposed on Iran. In an effort to pressure the
Iranian regime and delay the progress of Iran's nuclear program, the United
Nations, the United States, and the European Union have each strengthened their
sanction programs. This update describes the basic structure of current U.S.
and EU sanctions and highlights key provisions of interest. It is intended as a
summary and is not a substitute for detailed legal analysis of specific
questions that arise with respect to doing business with Iran.
Efforts to strengthen the economic sanctions imposed on
Iran have focused primarily on three areas: Iran's energy industry, nuclear
technology, and finance. In order to place maximum pressure on the Iranian
regime, the United States and other members of the international community have
tightened restrictions on refined petroleum products that were already in short
supply within Iran. Direct restrictions on exports that might be useful to
Iran's nuclear program remain in place and have been expanded. Finally, in an
effort to starve the Iranian regime of capital for its nuclear program and
support of terrorism, new efforts are underway to limit Iranian access to and
use of the global financial system.
The international backdrop for U.S. and EU measures is
the United Nations sanctions, which were strengthened with the adoption of U.N.
Security Council Resolution 1929 on June 9, 2010. Key provisions of S.C. Res.
1929 include a prohibition against Iranian investment in commercial nuclear
activity, measures forbidding the diversion of arms to Iran, restrictions on
ballistic missile development, a directive to inspect cargo destined for Iran
to ensure it does not include prohibited goods, and restrictions on providing
support services to Iranian-owned or contracted vessels. Other new U.N.
measures govern the provision of financial and banking services and dealings
with certain named Iranian companies and individuals. Although the U.N.
sanctions have had limited effectiveness, the new restrictions adopted in June
reflect a growing international consensus that more needs to be done to hamper
the Iranian nuclear program.
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