Since the late 1970s, the US and Iran have been actively hostile to each other, with the US regarding Iran as a major supporter of international terrorist activities. During most of this period, the US has sought to punish Iran by imposing trade and other economic sanctions, intended to cripple the Iranian economy and undermine the current Iranian regime.
These sanctions have included severe restrictions on what US companies and individuals are allowed to import from or export to Iran. During recent US presidential Administrations, some of these restrictions were relaxed, to allow (for example) the import of Iranian pistachio nuts and carpets. The current Administration has recently re-imposed those restrictions, and added a few new ones.
This change in US policy included limited periods for US persons doing previously authorized transactions with Iran to “wind down” these activities during three-month or six-month periods, depending on the specific types of activity. These “wind down” periods have now expired.
As a result, US persons – and companies owned or controlled by them, in the US or elsewhere – are now prohibited from conducting nearly all types of Iran-related business activity without a special license issued by the Office of Foreign Assets Control (OFAC), an agency of the US Treasury Department. Most of the exceptions are limited activities for humanitarian purposes, or very small-scale personal transactions.
OFAC also maintains lists of Iranian or Iran-related individuals, companies, and other entities that US persons are prohibited from doing business with, either directly or indirectly.
Individuals or companies that engage in prohibited types of Iran-related business activity, including importing or exporting prohibited items, may be subject to various types of civil and criminal penalties including:
* large fines
* suspension of import and/or export privileges
* prison time (for the most egregious offenders)
These penalties can be issued for either direct or indirect transactions with Iran, or with Iranian persons, businesses, or other entities. Examples of indirect transactions include, for example:
* A US exporter sells to a distributor in the Middle East region, and the distributor sells to an Iranian company or government entity. The US exporter is likely subject to penalties, even if the exporter did not know the distributor would sell the product to a customer in Iran. If the exporter did know, or should have known, that the goods were eventually going to go to Iran, the penalties are likely to be significantly greater.
* A US importer buys goods from a non-Iranian seller, but US Customs identifies the goods as actually prohibited products of Iran. In addition to Customs seizure of the goods, the importer is likely to be subject to fines and/or other penalties, if the importer failed to exercise “reasonable care” to verify the actual country of origin of the goods.
Before importing commercial goods, it is always a good idea to verify the actual country of origin, and confirm that the supplier and/or seller are not on any of the OFAC lists of entities that US companies are prohibited from doing business with.
Similarly, before exporting goods, it is always a good idea to verify where the actual final destination of the goods will be, and who the final recipient will be – and document that you have done so.
Transmark Customs Brokers, and our service partners at Transmark Logistics and Pilot Freight Services, will be pleased to provide advice and guidance to our current and future clients about how to reduce your risks in this and other potentially dangerous areas.