Yesterday, the United States Department of the Treasury Office of Foreign Assets Control (“OFAC”) amended the Iranian Transactions Regulations (“ITR”); commonly referred to as the Iran Embargo or Iran Sanctions. The amendment has the effect of expanding Appendix A of 31 C.F.R. Part 560 to include any person determined by OFAC to be the “Government of Iran”. In addition, the new amendment adds twenty two (22) persons to Appendix A of the ITR.

This is simple enough, however the press seems to have not understood what OFAC has done. As a result, I have seen some outrageous news articles published today stating that OFAC has barred all transactions with the Government of Iran. The way these news articles read it sounds as if no transactions–whether licensed or otherwise–will be permitted with the Government of Iran. Of course, if this were to occur it would radically change the landscape of the ITR.

After reading a few of these news articles I decided to give one of my OFAC contacts a call and determine what this new amendment really meant. After speaking with them, my suspicions were confirmed.

First, and most importantly, there are no new prohibitions in the ITR. Therefore, if you were seeking a license to conduct business with an Iranian entity subsidized by the Government of Iran, then hope is not lost, so long as OFAC licenses the transaction. Second, all they did was expand the persons included in Appendix A.

According to my contact at OFAC, “We know that some news sources might not fully understand it [the new amendment], but we believe that the private bar will.” I think they are absolutely right. A reading of the amendment shows that there are no new prohibitions, and that the effect of this amendment was just to supplement Appendix A of 31 C.F.R. Part 560.

I can understand where some confusion may have come into play. Even for attorneys practicing in this field the ITR can sometimes be confusing and unclear. As such, its always better to go to an attorney knowledgeable in the field of U.S. economic sanctions law to determine exactly where you stand in regards to a proposed transaction with Iran.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC litigation. If you have any questions please contact him at 202-280-6370 at 202-351-6161 or ferrari@ferrari-legal.com.