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ARTICLE · 17 OCTOBER 2016

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

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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.

IranInternational Law
Reid Whitten
Reid Whitten
J. Scott Maberry
J. Scott Maberry
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Article Highlights:

  • Non-U.S. banks can do business with Iran and continue their relationships with U.S. banks.
  • Non-U.S. companies may use proceeds from Iran transactions more freely, including in the United States.
  • OFAC draws a clearer line with respect to the use of Iran-related funds.

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

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