Last week the United States Department of the Treasury’s Office of Foreign Assets Control (‘‘OFAC’’) amended the Iranian Financial Sanctions Regulations(‘‘IFSR’’). That amendment caused OFAC to reissue the IFSR in their entirety in order to appropriately implement the mandates of section 1245(d) of the National Defense Authorization Act for Fiscal Year 2012.

The IFSR, as amended, defined the term “entity owned or controlled by the Government of Iran” in a way that did not exactly conform with the definition of that term contained in the Iranian Transactions Regulations(‘‘ITR’’). As such, and in order to ensure that the term “entity owned or controlled by the Government of Iran” is defined consistently throughout the Iran sanctions regulations, OFAC amended the ITR so that the definition of “entity owned or controlled by the Government of Iran” found in 31 C.F.R. 560.313 matched the definition of that term found in 31 C.F.R. 561.322.

The new definition being used for “entity owned or controlled by the Government of Iran” includes any corporation, partnership, association, or other entity in which the Government of Iran owns a 50 percent or greater interest or a controlling interest, and any entity which is otherwise controlled by that government.

OFAC has also indicated that it intends to issue more thorough amendments to the ITR to implement Executive Order 13599 at a later date. It might interest some as well to know that in addition to the recent actions OFAC has announced regarding changes to various sanctions programs due to Section 1245 of the NDAA and Executive Order 13599, that these two new sanctions initiatives also caused the massive delays many applicants experienced in their OFAC license applications for Iranian transactions. This is because a number of licenses and advisory opinions had to be rewritten to account for the mandates of both Section 1245 and E.O. 13599. With more sanctions on the way from Congress, those awaiting or recently submitting OFAC license applications relating to Iran may be facing delays in the near future if those new sanctions do indeed to come to pass.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.