On October 9, 2012, the president issued an Executive Order implementing sanctions set forth in the Iran Threat Reduction and Syria Human Rights Act of 2012, which bars foreign subsidiaries of U.S. companies from engaging in most transactions with Iran and making the U.S. parent companies liable for violations by their foreign subsidiaries. Prior to October 9, such foreign subsidiaries were subject to extraterritorial U.S. sanctions that applied to transactions relating to Iran's petroleum and with certain barred entities, but not to the broad U.S. sanctions on Iran that apply to U.S. entities. However, the U.S. parent and U.S. citizens, wherever located, were and are prohibited from facilitating transactions with Iran that they cannot enter into directly.

Final Rule regarding Iranian Sanctions Regulations

The Office of Foreign Assets Control ("OFAC") published a final rule on October 22, 2012 reissuing the Iranian Transactions Regulations ("ITR") in their entirety and changing the heading of the regulations to the Iranian Transactions and Sanctions Regulations ("ITSR"). The ITR, located at 31 C.F.R. Part 560, were created to implement a series of Executive Orders addressing various transactions with Iran. The ITSR updates the ITR to implement relevant sections of the National Defense Authorization Act for Fiscal Year 2012 ("NDAA") and Executive Order 13599, titled "Blocking Property of the Government of Iran and Iranian Financial Institutions" issued February 5, 2012 under the authority of the NDAA. OFAC also revised the general licenses and incorporated its statement of licensing policy, which had previously appeared only on OFAC's website. The ITSR are effective immediately.

Amendments to the Iranian Financial Sanctions Regulations

On November 8, 2012, OFAC promulgated amendments to the Iranian Financial Sanctions Regulations to implement provisions in the Iran Threat Reduction and Syria Human Rights Act of 2012. The amendments expand the categories of sanctionable activities and expand application of the regulations to a foreign financial institution that the Secretary of the Treasury finds: (1) knowingly facilitates or participates or assists in a prohibited activity; (2) attempts or conspires to facilitate or participate in such an activity; or (3) is owned or controlled by a foreign financial institution that the Secretary finds knowingly engages in such activity. The amendments come into effect immediately. 77 Fed. Reg. 66918.

OFAC Issues Updated list of Specially Designated Nationals

On November 8, 2012, OFAC updated its list of Specially Designated Nationals ("SDNs") subject to the U.S. economic sanctions with respect to Iran. Included on the list are the National Iranian Oil Company ("NIOC"), the Islamic Republic of Iran Shipping Lines ("IRISL"), and a variety of maritime entities.