Following the identification of Iran’s financial sector under EO 13902, sanctions may now be imposed on (i) persons operating in Iran’s financial sector (ii) persons who have knowingly engaged in a “significant transaction” for the sale, supply, or transfer to or from Iran of significant goods or services used in connection with Iran’s financial sector and (iii) persons who materially assist, sponsor, or provide financial, material, or technological support for, or goods or services to or in support of, any person designated under EO 13902 for operating in Iran’s financial sector. Identification of Iran’s Financial Sector and SDN DesignationsĮO 13902 authorizes the imposition of secondary sanctions against persons operating in Iran’s construction, mining, manufacturing, or textiles sectors, or any other sector of the Iranian economy identified by the Secretary of the Treasury, in consultation with the Secretary of State. The primary concern will be for those non-US parties operating wholly outside US jurisdiction where (i) newly sanctioned Iranian financial institutions or the Iranian financial sector are involved, and (ii) the transaction would not be authorized under the Iranian Transactions and Sanctions Regulations (“ITSR”) if engaged in by a US Person.

The action represents a significant escalation of the sanctions targeting Iran’s financial sector, yet many humanitarian transactions and activities will continue to be authorized. OFAC also issued a general license and Iran-related Frequently Asked Questions, as further described below. Our previous blog post on EO 13902 is available here.

On October 8, 2020, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) identified the Iranian financial sector as subject to Executive Order (“EO”) 13902 and, based on such identification, designated 18 Iranian banks.

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