Recently the United States, Britain, China, France, Germany and Russia signed a historic six-month interim deal with Iran. The deal is aimed at preventing nuclear weaponization or breakout capability by Iran in return for unfreezing assets and ending select sanctions.
The deal was signed at the end of November in Geneva and is indicative of a U.S. policy change towards Iran.
Right now there is the potential for the trade community to expand its engagement with Iran, albeit on a limited basis. Sanctions will be eased—notably in the oil, automotive and aviation industries—though not ended. Most of Iran's economic sectors will remain under sanctions, especially sanctions on Iran's dominant oil and gas sector. Companies that do enter the Iranian market, even in areas not subject to sanctions, will continue to encounter financial and logistical restrictions.
When and if these changes occur, companies will need to quickly update their regulatory information. Doing business with Iran, Iranian companies and individuals requires knowledge of these numerous and complex sanctions and stringent controls to avoid doing business with restricted parties. Exporters are responsible for ensuring that they are compliant with government regulations, and that their goods are not being sold to undesirable entities.
Companies that engage in trade with Iranian restricted parties face prohibitive penalties, including fines and jail time. For example, recently a U.S. citizen was sentenced to 18 months in prison and his company and himself were jointly sentenced to forfeiture of $1.25 million for exporting computer-related goods to Iran via the United Arab Emirates. In addition, he and his company were denied export privileges for 10 years as well as forfeiture of assets.
Automating the restricted party screening process can improve overall efficiency, eliminate potential fines or penalties and reduces the time needed for manual intervention. An automated solution constantly updates changing regulations, enabling employees to focus on clearing holds and speeding shipments rather than researching numerous matches. Aside from preventing illegal transactions, fines and penalties, it preserves a complete audit trail of screening activity to reduce corporate risk and demonstrate reasonable care.
As a caveat, not everyone is on board with these changes. Canada will keep all its sanctions against Iran and Israel has vehemently opposed the agreement. Some U.S. congressmen oppose the deal. Most recently Washington blacklisted 19 companies, people and vessels for dealing with Iran. U.S. officials said they had not violated the deal in blacklisting the companies, vessels and individuals under existing law and said their commitment under the deal referred to not imposing sanctions under new laws.