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As the deadline for a comprehensive agreement approaches, many companies are salivating at the prospect of a sanctions-free Iran. With its sizeable middle-class, well-educated population, and developed industrial base, Iran is indeed an attractive market; it would be irresponsible for firms not to be scouting its potential. However, it would be equally foolhardy to let greed overwhelm good sense. If the past several years of sanctions enforcement have taught compliance professionals anything, it is that enforcement priorities can change rapidly, violations once thought to be relatively minor can metastasize, and the U.S. government has a long memory.

In December 2005, the Treasury Department’s Office of Foreign Assets Control (“OFAC”) along with the Federal Reserve fined Dutch lender ABN AMRO $40 million for violations of Iran and Libya sanctions. This enforcement action was the opening salvo in a decade-long effort to penalize financial institutions for U.S. sanctions violations that continues to this day. Highlights include the $1.8 billion penalty imposed on HSBC and the eye-popping $8.9 billion extracted from BNP Paribas. And while the federal government initiated the campaign, state regulators are increasingly making their own mark.

While it’s certainly true that many of these violations represented deliberate attempts to circumvent U.S. law, this is not always the case. BNP’s violations stemmed at least in part from questionable advice from counsel. Bank of Tokyo-Mitsubishi’s massive fine from the New York Department of Financial Services in 2013 was in large part due to stripping information from Iran-related transactions that were legally permissible under U.S. sanctions law until 2008. But over the course of the past 10 years, the enforcement posture of U.S. regulators changed dramatically; activity that, while against the law, was not viewed as extraordinarily risky in 2005, looks entirely different in 2012.

Companies considering the Iranian market in a post-sanctions environment should be carefully considering their remaining sanctions liability upon re-entry. At this point in time, a nuclear deal seems imminent and the members of the P5+1 will be looking to deliver Iran sufficient sanctions relief in order to ensure Tehran’s adherence to the deal. Yet the envisioned agreement does not cover all U.S. secondary sanctions and it does not seem likely that there will be significant changes to the Iranian Transactions and Sanctions Regulations (“ITSR”).

Moreover, any deal will be tenuous and rely on significant effort from negotiating partners who neither like nor trust each other. Any number of spoilers, including a new U.S. administration, Hezbollah terrorist activity targeting Israeli interests, the situation in Syria, or Green Movement-style domestic unrest could cause the deal to unravel. If an agreement does in fact collapse, U.S. sanctions are likely to be re-imposed quickly, with an expansion not far behind.

At the same time, U.S. regulators will begin searching for evidence of sanctions violations by companies both foreign and domestic, financial institutions in particular. Those who have not scrupulously adhered to remaining sanctions may find themselves used by OFAC to set an example. The 5-years statute of limitations for violations of the International Emergency Economic Powers Act (“IEEPA”) gives OFAC significant leeway to look back for violations that may have occurred during the post-deal feeding frenzy that many expect to occur. Tolling agreements are a regular part of the process, allowing OFAC to extend investigations after violations are first discovered.

It should also be noted that those willing to bet that the era of Iran sanctions enforcement is effectively over are not only putting their companies’ welfare at risk, but their own as well. Enforcement agencies, the New York Department of Financial Services (“NYDFS”) and the Department of Justice in particular, have made noise lately about expanding prosecutions of individuals for corporate misconduct. NYDFS has made the firing of employees complicit in violations a component of many of its recent settlements, not only in the sanctions context. Criminal prosecution of an individual is a distinct possibility in a future enforcement scenario.

Thankfully, it appears that companies, especially financial institutions have in fact learned some of the lessons of the past decade. The massive sanctions fines were a significant departure from previous enforcement efforts and seemed to take the industry by surprise—the Government Accountability Office even chastised OFAC in 2007 for focusing too heavily on petty violations of the Cuba embargo, such as the importation of Cuban cigars. Most reports acknowledge that sanctions relief will be slow, as companies stung by big penalties and withering eye of regulators move warily into the Iranian market.

None of which is to say the Iran should continue to be shunned indefinitely, even after a deal. There is without a doubt a great deal of opportunity should an agreement be reached. But it’s extremely important that any enthusiasm is accompanied by an appreciation for the significant risks that remain.

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