Those Three Little Words: OFAC’s Subtle Language Shift Could Create Sweeping Change on Iran Investment


After the Iran nuclear agreement, as non-U.S. companies entered into newly-permitted business in Iran, they faced the difficult question of where they could put the money from their Iran business. U.S. law still prohibits U.S. persons (including U.S. banks) from conducting most business with Iran. Among other rules, OFAC regulations and guidance provided that “Iran-related” funds could not transit the U.S. financial system. But the guidance did not state clearly what constituted “Iran-related” funds. For that reason, foreign financial institutions (FFIs) hesitated, even feared, to process Iran-related transactions because of the risks of sending Iran-related funds into the U.S. financial system in violation of U.S. sanctions. However, a new clarification in the OFAC guidance could change all of that (and change it in the way we proposed right here in this blog[1]). More. 

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