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Financial Services Law Insights and Observations

President Trump imposes new sanctions on Iran; OFAC announces designations

Financial Crimes Department of Treasury Of Interest to Non-US Persons OFAC Executive Order Sanctions Iran

Financial Crimes

On June 24, President Trump issued Executive Order (E.O.) 13876, “Imposing Sanctions with Respect to Iran,” which: (i) imposes sanctions on Iran’s Supreme Leader’s Office (SLO); and (ii) targets persons appointed to certain official or other positions by the Supreme Leader and/or his office for allegedly taking actions to “destabilize the Middle East, promote international terrorism, and advance Iran’s ballistic missile program, and Iran’s irresponsible and provocative actions in and over international waters.” Among other things, E.O. 13876 authorizes the Secretaries of Treasury and State to impose sanctions on a foreign financial institution if it is determined that it has knowingly conducted or facilitated any significant financial transactions in these sectors, or for or on behalf of a blocked person. These sanctions would prohibit the opening of, or impose strict conditions on maintaining, a correspondent account or payable-through account by such foreign financial institutions in the United States.

On the same day, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated eight senior commanders of the Islamic Revolutionary Guard Corps (IRGC) pursuant to E.O. 13224, which “provides a means by which to disrupt the financial support network for terrorists and terrorist organizations.” According to OFAC, the sanctions are meant to reinforce the President’s newly issued E.O. 13876. As a result of the designations, “all property and interests in property of these targets that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC noted that persons who engage in transactions with the designated individuals and entities may be exposed to sanctions themselves or subject to enforcement action.

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