Iran Related Secondary Sanctions

The U.S. sanctions policy against Iran is one of the toughest in the world. It includes both primary and secondary sanctions imposed by the Office of Foreign Assets Control. While primary sanctions restrict the activities of American citizens and companies in relation to Iran, secondary sanctions target foreign individuals and organizations that conduct business with Iranian entities.

Secondary sanctions by OFAC are sanction measures that the United States applies to foreign individuals, companies, and financial institutions if they conduct business with sanctioned organizations or state entities of Iran. The main goal of these sanctions is to maximally isolate Iran from the global financial and trade system, cutting off the country’s access to international markets and capital.

Unlike primary sanctions, which restrict the activities of U.S. citizens and companies, secondary sanctions target foreign entities and states that do business with Iran, even if they have no ties to the U.S. Such restrictions effectively force foreign companies to choose between cooperating with Iran and accessing the American market.

Sanctions are aimed at foreign companies, banks, and individuals who:

Even if a company does not violate the laws of its country but cooperates with Iran, it may fall under OFAC sanctions and lose access to the international banking system.

The USA uses secondary sanctions as a tool of geopolitical pressure, pursuing several key objectives:

The isolation of the Iranian economy – the prohibition for foreign companies to cooperate with Iranian organizations reduces their access to international markets;

For effective control over compliance with the sanctions regime, the US applies several strict punitive measures against foreign companies that violate the prohibitions.

If your company interacts with banks, enterprises, or government entities of Iran, you need to assess all risks in advance and consult with lawyers specializing in sanctions regulation. We will help you avoid violations of the OFAC sanctions regime, protect your business, and minimize legal risks.

The first step in ensuring compliance with sanctions is analyzing current and potential risks of interaction with Iran. For this, it is necessary to assess existing counterparties and business connections – it is important to determine whether partners cooperate with companies from the SDN List.

It is also necessary to check financial flows and ensure that correspondent banks are not involved in operations related to Iran. Analyze the supply chain, as contractors may be engaged in sanctionable activities. Identify industry risks – special attention should be paid to the oil and gas industry, shipping, insurance, logistics, banking, and financial services.

Consultation with experts will help understand OFAC requirements and determine a business protection strategy. Lawyers will assist in checking counterparties for their presence on sanction lists.

Specialists will prepare internal instructions and recommendations for employees. Collaboration with lawyers will help prevent mistakes that could lead to fines or asset freezes.

Any company operating in the international market is obliged to check its partners. For this, official OFAC sanctions lists can be used, as well as automated monitoring systems. In addition, it is worth checking the ultimate beneficiaries of companies and evaluating payment routes. A reliable sanctions compliance system will help avoid accidental violations and financial losses.

Companies must develop and implement a sanctions compliance policy that includes internal rules for employees, transaction monitoring, conducting training and briefings for staff, as well as documenting all checks. It is necessary to keep records of counterparties and transactions checks in accordance with OFAC requirements.

Non-compliance with sanction restrictions can lead to large fines, asset freezes, loss of access to international markets, and exclusion from the dollar system. That is why it is important to analyze potential risks in advance and consult with qualified lawyers on sanction legislation.

Our specialists conduct a comprehensive risk assessment and verification of business connections. Lawyers analyze existing and potential partners for their presence on the SDN List.

We provide assistance in developing an internal compliance system that will prevent accidental violations. In addition, experienced specialists conduct legal analysis of contracts: reviewing agreements, payment routes, and logistics chains. We provide legal support for international transactions, as well as handle appeals against sanctions and removal from the SDN list. Timely legal assistance will help avoid account freezes, fines, and termination of international contracts.

Working with sanctions legislation requires a deep knowledge of international law, as even indirect cooperation with Iranian organizations can lead to serious consequences. Companies collaborating with experienced lawyers protect themselves from financial losses and maintain their international business reputation. Lawyers assess business connections, financial transactions, and supply chains to identify potential sanctions violations.

Schedule a consultation with our experts right now. We will conduct an audit of potential risks, help you avoid sanctions violations, develop an internal compliance strategy, protect assets, and ensure business security.