On Wednesday, President Trump issued a new Iran sanctions Executive Order, which says, in part, the following:
Section 1. (a) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in: any person determined by the Secretary of the Treasury, in consultation with the Secretary of State:
(i) to be operating in the iron, steel, aluminum, or copper sector of Iran, or to be a person that owns, controls, or operates an entity that is part of the iron, steel, aluminum, or copper sector of Iran;
(ii) to have knowingly engaged, on or after the date
of this order, in a significant transaction for the sale,
supply, or transfer to Iran of significant goods or services used in connection with the iron, steel, aluminum, or copper sectors of Iran;
(iii) to have knowingly engaged, on or after the date of this order, in a significant transaction for the purchase, acquisition, sale, transport, or marketing of iron, iron products, aluminum, aluminum products, steel, steel products, copper, or copper products from Iran;
(iv) to have materially assisted, sponsored, or
provided financial, material, or technological support for, or goods or services in support of any person whose property and interests in property are blocked pursuant to this section; or
(v) to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this section.
…
Sec. 2. (a) The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to impose on a foreign financial institution the sanctions described in subsection (b) of this section upon determining that the foreign financial institution has, on or after the date of this order,
knowingly conducted or facilitated any significant financial transaction:
(i) for the sale, supply, or transfer to Iran of
significant goods or services used in connection with the iron, steel, aluminum, or copper sectors of Iran;
(ii) for the purchase, acquisition, sale, transport, or marketing of iron, iron products, aluminum, aluminum products, steel, steel products, copper, or copper products from Iran; or
(iii) for or on behalf of any person whose property and interests in property are blocked pursuant to this order.
(b) With respect to any foreign financial institution
determined by the Secretary of the Treasury in accordance with this section to meet any of the criteria set forth in subsection (a)(i) through (a)(iii) of this section, the Secretary of the Treasury may prohibit the opening, and prohibit or impose strict
conditions on maintaining, in the United States of a
correspondent account or payable-through account by such foreign financial institution.
And there are new FAQs:
Frequently Asked Questions Regarding Executive Order (E.O.) “Imposing Sanctions with Respect to the Iron, Steel, Aluminum, and Copper Sectors of Iran” of May 8, 2019
666. What does the Executive Order Imposing Sanctions with Respect to the Iron, Steel, Aluminum, and Copper Sectors of Iran of May 8, 2019 do?
The Executive Order of May 8, 2019 authorizes sanctions with respect to the iron, steel, aluminum, and copper sectors of Iran.
Section 1 of the E.O. of May 8, 2019 authorizes blocking sanctions on any person determined by the Secretary of the Treasury, in consultation with the Secretary of State:
(i) to be operating in the iron, steel, aluminum, or copper sector of Iran, or to be a person that owns, controls, or operates an entity that is part of the iron, steel, aluminum, or copper sector of Iran;
(ii) to have knowingly engaged, on or after the effective date of the order, in a significant transaction for the sale, supply, or transfer to Iran of significant goods or services used in connection with the iron, steel, aluminum, or copper sectors of Iran;
(iii) to have knowingly engaged, on or after the effective date of the order, in a significant transaction for the purchase, acquisition, sale, transport, or marketing of iron, iron products, aluminum, aluminum products, steel, steel products, copper, or copper products from Iran;
(iv) to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of any person whose property and interests in property are blocked pursuant to section 1; or
(v) to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to section 1.
Section 2 of the E.O. of May 8, 2019 authorizes correspondent and payable-through account sanctions on foreign financial institutions (FFIs) determined to have knowingly conducted or facilitated any significant financial transaction:
(i) for the sale, supply, or transfer to Iran of significant goods or services used in connection with the iron, steel, aluminum, or copper sectors of Iran;
(ii) for the purchase, acquisition, sale, transport, or marketing of iron, iron products, aluminum, aluminum products, steel, steel products, copper, or copper products from Iran; or
(iii) for or on behalf of any person whose property and interests in property are blocked pursuant to the order.
Sections 3-13 of the E.O. of May 8, 2019 contain exceptions, definitions, and other implementing provisions related to the sanctions. [05-08-2019]
667. When does Executive Order Imposing Sanctions with Respect to the Iron, Steel, Aluminum, and Copper Sectors of Iran become effective?
The E.O. of May 8, 2019 became effective upon signing. [05-08-2019]
668. Is there a wind-down period?
Yes. Persons engaged in transactions that could be sanctioned under the Executive Order Imposing Sanctions with Respect to the Iron, Steel, Aluminum, and Copper Sectors of Iran of May 8, 2019 will have a 90-day period to wind down those transactions without exposure to sanctions under the E.O. of May 8, 2019. Those persons should take the necessary steps to wind down transactions by the end of the 90-day wind-down period to avoid exposure to sanctions. Entering into new business that would be sanctionable under the E.O. of May 8, 2019 (the effective date of the E.O.) will not be considered wind-down activity and could be sanctioned even during the wind-down period. [05-08-2019]
669. Does the Executive Order Imposing Sanctions with Respect to the Iron, Steel, Aluminum, and Copper Sectors of Iran expand upon existing sanctions relating to trade with Iran in certain raw and semi-finished metals, such as aluminum and steel?
Yes. The E.O. of May 8, 2019 expands upon existing sanctions under section 1245 of IFCA on the sale, supply, or transfer, directly or indirectly, to or from Iran of certain materials, including raw and semi-finished metals such as aluminum and steel, as described in subsections 1245(a)(l)(B) or (C) of IFCA.
In addition, the E.O. of May 8, 2019 explicitly targets the iron and copper sectors of Iran. [05-08-2019]
670. Are there exceptions to the sanctions imposed under E.O. of May 8, 2019?
Yes. The sanctions authorized under the E.O. of May 8, 2019 do not apply to transactions for the conduct of the official business of the United States Government or the United Nations (including its specialized agencies, programmes, funds, and related organizations) by employees, grantees, or contractors thereof. [05-08-2019]
671. What is the definition of significant?
The Department of the Treasury anticipates adopting the interpretation of “significant” set out in 31 C.F.R § 561.404. See existing OFAC Iran FAQ 289. [05-08-2019]
Mr. Watchlist is kind of speechless… if someone sees a way that this ends well – especially long-term – please enlighten me.
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