On Friday, October 13, 2017, President Trump announced that he will decertify the 2015 Iran Nuclear Deal.

By way of explanation, as part of the Iran Nuclear Agreement Review Act of 2015, the administration must recertify to Congress every 90 days that Iran is complying with its obligations under the JCPOA. Absent this certification, Congress has the option to re-impose nuclear related sanctions. Therefore, although Friday’s announcement does not withdraw the United States from the Iran Deal, it does open the door for Congress to impose legislation that could potentially undermine the integrity of the deal.

Please keep in mind that the nuclear sanctions primarily impact non-U.S. persons and other countries. Therefore, even with the lifting of the nuclear sanctions in 2016, U.S. persons and U.S. companies continue to be broadly prohibited from engaging in transactions or dealings with Iran and the government of Iran unless such activities are exempt from regulation or authorized by OFAC.

Although the re-imposition of nuclear related sanctions may not appear to have direct legislative impact on what U.S. persons can do vis-à-vis Iran, it is unclear whether such additional sanctions could soon follow. What is clear, however, is that such an act could have grave consequences from a foreign affairs standpoint and will undoubtedly undermine U.S. national security and credibility. This is especially true since the administration has offered no evidence that Iran has violated the deal. Furthermore, a bipartisan group of national security leaders have verified the success of the program and have urged the United States to continue implementing the deal.

If you would like to help protect the Nuclear Deal and encourage Congress to uphold the agreement, please contact your representative today via the following link: https://www.usa.gov/elected-officials

If you have trouble finding your representative, please contact our office today.

On September 24th, the Trump administration introduced a series of new travel restrictions on eight countries. Travel ban 3.0, for clarity sake, was in many ways predictable, but also contained a few significant surprises.

The bottom-line for Iranian Americans and their friends and family abroad is that travel ban 3.0 continues version 2.0’s suspension of entry in the U.S. by Iranian nationals (among others) who lack a bona fide relationship with a U.S. person or entity. On October 18th, however, a new, indefinite suspension of entry into the U.S. by Iranian nationals will come into effect. Iranian nationals will no longer be permitted to obtain immigrant and non-immigrant visas for entry into the U.S., even including those who have a bona fide relationship with a US person or entity. Important exemptions remain, but travel ban 3.0 represents a near total denial of entry for Iranian nationals and others.

 

Travel Ban 2.0

Travel ban 3.0 is the result of a Department of State review set in motion by travel ban 2.0. Recall that version 2.0, officially Executive Order 13780, ordered the Secretary of Homeland Security to determine “a comprehensive set of criteria” against which the Secretary would evaluate the capabilities of foreign governments to help the U.S. government to identify which of their nations attempting to enter the U.S. pose national security threats. The Secretary of Homeland Security came up with the following three criteria:

1. The integrity and rigor of the country’s travel documentation;
2. The willingness of the government to share information on its nationals with the U.S. government; and
3. The presence of terrorists in a country’s territory

These criteria, as version 3.0 repeats, would enable the U.S. government to achieve its “foreign policy, national security, and counterterrorism goals.”

As the next step the executive order instructed the Secretary of State to assess whether foreign countries fulfill these criteria and to request that the countries that fall short of these standards improve their practices. Finally, based on the findings of this review the Secretary of State would recommend to the president which countries to target with the new travel ban.

While the Departments of Homeland Security and State were engaged in this work, version 2.0 suspended entry into the U.S. of nationals from six predominantly Muslim countries. Several rulings by U.S. courts placed injunctions on this order, although the Supreme Court lifted these injunctions and allowed the administration to deny entry to nationals from those countries who lack a bona fide relationship with a U.S. person or entity. This suspension will remain in effect under the new travel ban.

 

Travel Ban 3.0

The results of the review by the Department of State are in, and the following countries were found to be deficient in each of the three aforementioned criteria: Iran, Libya, Syria, Yemen, Somalia, North Korea, Chad, and Venezuela.

Starting October 18th, nationals from these countries – with the exception of Venezuela and Somalia – will be denied both immigrant and non-immigrant visas for entry into the U.S.; this ban also includes nationals who have a bona fide relationship with a U.S. person or entity. As for Venezuela the ban applies only to certain top officials, and Somalis are permitted nonimmigrant visas.

Exemptions
Although travel ban 3.0 places stringent restrictions on entry, certain general exemptions, case-by-case waivers, and country-specific exemptions are allowed.

General exemptions are made for the following categories of nationals from the aforementioned countries:

1. Persons who are in the U.S. on valid visas before October 18th;
2. Lawful permanent residents of the U.S.;
3. Nationals on humanitarian or advanced parole in the U.S.;
4. Dual nationals of non-designated countries;
5. Holders of diplomatic visas; and
6. Nationals already granted asylum or refugee status in the U.S.

Case-by-case waivers may be granted at the discretion of consular officers to nationals for whom denial would cause “undue hardship”, who do not pose threats, and whose entry would be in the national interest. Individuals in this category could include nationals who have already been admitted to the U.S. on work or study visas, or who have “significant contacts with the U.S.”, but will be outside the country on October 18th; who have “significant business or professional obligations” that would be impaired if denied entry; who, seeking to visit a family member who is a lawful permanent resident, would incur “undue hardship” if denied entry; who are seeking entry for medical care; or who are or have been employed by or on behalf of the U.S. government. If you think you might be eligible for this waiver, please call our offices, or consult an immigration lawyer.

The new travel ban also grants exemptions that are unique to the individual designated countries. Iranian nationals, for example, are permitted to enter the U.S. on a student visa (F and M) or an exchange visa (J), though they should expect enhanced scrutiny.

 

(Still) A Poorly Written Regulation

Unlike the previous two iterations of the travel ban, version 3.0 succeeds in cloaking the restrictions in a veneer of rationality, deliberation, and objectivity; however, upon a closer look it is clear that the travel ban remains a poorly written regulation.

The most glaring example is the dropping of Sudan from the list of targeted countries. While Iran is chastised as a state sponsor of terrorism, there is no mention of Sudan, which continues to appear alongside Iran on the Department of State’s list of designated state sponsors of terrorism.

Then there are the surprising additions of Chad, North Korea, and Venezuela to the list. Chad, for one, has been a valuable partner in the fight against terrorism in the Sahel, as the new ban itself acknowledges, and is not often cited as a source of destabilizing terrorism. Moreover, North Korea is not a source of immigrants to the U.S., as its government does not allow its citizens to leave the country. The choice to target certain top Venezuelan government officials, to the exemption of ordinary citizens, is in line with new financial sanctions placed on Venezuela in August, yet the rationale presented in the travel ban is perplexing. Despite the fact that Venezuela’s government is “uncooperative” and its information sharing policies “inadequate”, the text of the ban asserts that U.S. government has access to “alternative sources” to verify the identities of Venezuelan nationals. For this reason, the Secretary of State’s review recommended imposing restrictions only on the top government officials “who are responsible for the identified inadequacies”. The order does not specify what those “alternative sources” are. Nor does it defend the choice of officials’ role in setting travel policy as the criterion to determine which officials should be designated.

In short, travel ban 3.0 will significantly curtail entry into the U.S. of nationals from several countries, and its convoluted regulations will create difficulties for officials working to enforce them and for individuals specifically exempted from the restrictions. Therefore, if you or a member of your family is planning to enter the U.S., we advise that you consult with an immigration lawyer prior to travel so that you know if and how you will be affected.

On Monday June 26th, the U.S. Supreme Court made the momentous decision to review the rulings of several lower courts on the Trump administration’s revised travel ban. At the same time, the justices lifted the lower courts’ injunctions on certain key features of the travel ban, stating that the administration may enforce the travel ban on nationals from Iran, Libya, Somalia, Sudan, Syria, and Yemen who DO NOT have “a credible claim of a bona fide relationship with a person or entity in the United States.”

In this article we will tell you what you need to know about the revised travel ban, the Supreme Court’s decision, and who is likely to be impacted by it.

 

The Revised Travel Ban

The revised travel ban, Executive Order 13780, was signed on March 6, 2017, revoking the first travel ban (Executive Order 13769), and came into effect on March 16th with the stated purpose of protecting American citizens and interests from terrorism. Like its predecessor, the revised travel ban orders in Section 2(c) a 90-day suspension of entry into the U.S. of nationals from the six countries listed above. In Section (6) the order also suspends the entry of refugees under the U.S. Refugee Admissions Program (USRAP) for 120 days and caps the number of refugees who can be admitted to 50,000. During this time, U.S. government agencies are ordered to review and determine what additional information, if any, they need from each country to guarantee that its nationals wishing the enter the U.S. are not security concerns, and to establish screening and vetting procedures for those wishing to enter the U.S. The executive order does allow important exemptions to the travel ban for lawful permanent residents, holders of valid, non expired visas, foreign nationals admitted on humanitarian grounds, dual citizens, holders of diplomatic visas, asylum seekers, and refugees who have already been admitted to the U.S.

 

A Poorly Written Regulation

Under the very real threat of terrorism, these provisions may seem justified. However, this revised travel ban contains some of the same fatal flaws as the one it replaced.

• The revised ban still targets the wrong countries.
It targets countries whose nationals have NEVER been linked to or charged with acts of terror on American soil, but that are BELIEVED by the administration to be acting hostilely to American interests. At the same time, it does not target countries whose nationals HAVE been linked to or charged with acts of terrorism.

• The ban may not be temporary.
We think it is unrealistic to expect 1) that the six designated nations will supply the information demanded by the U.S. government, and 2) that the U.S. government will think the information sufficiently trustworthy. This lack of trust could lead to an indefinite suspension for nationals from these countries.

• The ban disregards existing vetting processes for immigration.
Section 5 of the ban orders government agencies to establish baseline guidelines for vetting immigrants that would prevent potential terrorists from entering the United States. This requirement ignores the stringent security measures that are already in place, including extensive background checks.

• The ban is influenced by religious intolerance.

Most damaging to the revised travel ban have been the rulings of lower courts around the country. For example, U.S. Fourth Circuit Court of Appeals asserted that the ban  “drips with religious intolerance, animus, and discrimination.”  This ruling and others like it led to court injunctions being placed on Section 2(c), which suspended entry of Libyan, Iranian, Sudanese, Somali, Yemeni, and Syrian nationals, and Section 6, which suspended entry of refugees.

 

SCOTUS Gets Involved

On June 1st the Trump administration appealed the decisions of the lower courts to the U.S. Supreme Court, which on June 26th decided officially to review the lower courts’ rulings on the travel ban when it reconvenes in October. The Court also decided to allow some aspects of the travel ban to go into effect in the meantime. In particular, it decided that the Trump administration can enforce the travel ban on nationals from the six designated countries who DO NOT have “a credible claim of a bona fide relationship with a person or entity in the United States.” Nationals with “a close familial relationship” with a U.S. person or a “formal, documented” business relationship with a U.S. entity, on the other hand, will be allowed to enter. The Court also stated that individuals cannot establish these relationships for the purpose of avoiding the travel ban.

The Court did not define “close familial relationship”, but subsequent State Department guidelines included parents, spouses, children, adult sons and daughters, sons- and daughters-in-law, and siblings in the U.S.

The State Department guidelines excluded grandparents, grandchildren, aunts, uncles, nieces, nephews, cousins, brothers- and sisters-in-law, fiancées, and other extended family members.

 

Who is likely to be impacted?

The Supreme Court’s decision went into effect on Thursday, June 29th, and despite its momentous nature, many nationals from the six designated countries will still be allowed to enter the U.S, in addition to those with bona fide, close familial relationships:

• Holders of valid immigration visas issued before June 26th, 2017

• Lawful permanent residents of the U.S.

• Asylum seekers and those who have already been granted asylum

• Diplomats

• Individuals with bona fide relationship to an American entity, including students accepted at U.S. universities, employees hired by U.S. companies, and lecturers invited to address American audiences

• Refugees who were processed overseas that have family connections or connections with a refugee agency, even if the cap of 50,000 on refugees has been surpassed

 

On the other hand, other individuals may face new difficulties when trying to enter the U.S.:

• Individuals who DO NOT have bona fide relationships with U.S. persons or entities

• Tourists from designated countries

• Individuals with employment based visas that DO NOT require a petitioning employer (EB-1, National Interest Waiver), as they may not be able to demonstrate a bona fide relationship

• Individuals who establish bona fide relationships after June 26th, as such relationships could be seen by as formed for the purpose of avoiding the travel ban.

Therefore, if you, your family members, or your associates are planning to travel to the U.S., it is imperative that you understand your rights and whether documents attesting to a bona fide relationship with a U.S. person or entity are in order. Please feel free to contact our office with any questions.

Our office has received numerous inquiries regarding whether U.S. persons can use money that they have legally transferred to the U.S. from Iran as a down payment for a home mortgage in the U.S. The answer is YES. But U.S. persons should be aware that to avoid delays or additional fees from the lending bank it is their responsibility to prepare all documents attesting to their compliance with the Iranian Transactions and Sanctions Regulations (ITSR) prior to applying for the mortgage.

Under ITSR money from several sources can be legally transferred from Iran to the U.S. U.S. persons are permitted to transfer non-commercial family remittances, such as an inheritance or a gift from family members, and proceeds from the sale of real property in Iran, provided that they acquired the property before becoming U.S. persons or inherited it afterwards. Additionally, OFAC has licensed U.S. persons to engage in certain other transactions in Iran and with Iranian entities. For more information on permitted transfers please consult our blog.

Although funds from these sources may be transferred from Iran to the U.S., no banking relationship exists between the two countries. This means that the only authorized way to transfer funds is through a currency exchange broker in Iran (a “sarafi”). When using a currency exchange broker, one, in essence, sells the Iranian currency (rials/toman) to the broker in exchange for U.S. dollars, which the broker delivers to the United States by one of two methods. The broker can 1) wire the funds to the United States via a third country bank, or 2) find a customer or an agent to deposit the funds directly into the recipient’s account in the United States. We STRONGLY recommend that you use the first method of transfer, because the second method is VERY dangerous and has frequently embroiled unwitting recipients in illegal activities.

The complexities associated with legal transfers of money from Iran can create additional problems when recipients try to use that money in the U.S. Though U.S. persons may to use money from Iran in the U.S. – for example, to make a down payment for a home mortgage – lending banks are cautious when accepting these funds, as it is difficult for them to verify that both the money and the transfer comply with ITSR and don’t involve designated Iranian entities. Verifying this information can create delays for the borrower, causing the house falls out of escrow. Moreover, the lending bank may charge higher fees, or in some cases even reject a down payment and refuse to issue a loan. Therefore, it is very important to prepare all the documents – including translations – attesting to the money’s and the transfer’s compliance with ITSR prior to applying for a home mortgage loan. These documents include deeds of sale and transfers of title in Iran, letters granting gifts, copies of wills, or any documents related to Iranian attorneys or courts, if they were used. Additionally, be sure to obtain receipts from the currency exchange broker in Iran and verify that the funds were transferred through a valid third country bank and did not involve any designated entities or individuals.

If you are considering transferring funds from Iran and using those funds for purchasing a home in the U.S., we advising you to consult an experienced OFAC attorney, or contact our firm with any questions at (310) 780-6360 or by email via our website.

1) What is OFAC and does it still exist?

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is the U.S. government agency responsible for administering and enforcing U.S. economic sanctions programs. YES, OFAC is still in existence and OFAC still has sanctions in place against Iran.

2) How did the lifting of the nuclear sanctions in January of 2016 impact the Iran Sanctions as applied to U.S. persons?

The lifting of the nuclear or secondary sanctions as a result of the Iran Nuclear Deal mainly impacts NON-U.S. persons/entities and countries other than the United States. Therefore, U.S. persons and U.S. companies continue to be broadly prohibited from engaging in transactions or dealings with Iran and the Government of Iran unless such activities are exempt from regulation or authorized by a general or specific license issued by OFAC. Also, broad prohibitions remain in effect regarding the direct or indirect exportation of U.S. origin goods to Iran.

3) Do you need to obtain permission/OFAC license from the U.S. government to sell real property in Iran?

In October of 2012, OFAC issued a general license permitting all U.S. persons to sell inherited property or property that had been acquired prior to that person becoming a US person. Therefore, for you no longer need to apply for a specific license from OFAC for the sale of property acquired PRIOR to becoming a U.S. person or for the sale of inherited property. However, due to the fact that there is no direct banking relationship between Iran and the United States and due to the fact that you have to receive funds only through a currency exchange broker, you must submit certain compliance documents to your bank prior to each incoming wire transfer. You must also ensure that the wire transfers enter the United States through third country banks and through legal channels and that the transfer does not involve any designated entities or individuals.

4) Do you need permission from the US government (OFAC) to receive a gift or inheritance from Iran?

Non-commercial personal remittances (gift or inheritance) to and from Iran are generally licensed and therefore do not require separate authorization from OFAC. However, you must ensure that the funds are deposited to your U.S. bank through legal channels and that the transfer does not involve designated nationals. You must also still submit appropriate compliance documents to the appropriate department of your U.S. bank so that the bank is aware of the source and legality of the transfer.

5) How much money can you physically bring to the US or take with you abroad when traveling? Is the limit $10,000.00?

Any individual can physically bring in to the U.S. or take out of the U.S. any amount of money in the form of cash when traveling to or from the United States. However, per U.S. Customs and Border Protection regulations, if you are carrying more than $10,000.00 when traveling into or out of the U.S., you must report this to Customs and Border Protection. For a sample declaration form please visit www.CBP.gov or contact our firm. Other than this reporting requirement, there is no other legal issue with bringing or taking any amount of money with you into or out of the United States.

6) Can your law firm assist clients with the actual transmittal of funds from Iran to the US (i.e. Can you do what a currency exchange broker does)?

No, our firm cannot assist in the actual transmittal of funds from Iran to the United States. In order for any U.S. individual or entity to engage in money transmittal services (such as a currency exchange broker/Sarafi), that individual or entity must have the required state and federal money transmittal licenses.

Furthermore, when dealing with money transmittal to/from Iran, the exchange company must also have a specific license issued by OFAC that permits that individual or entity to export services to Iran. If any entity in the United States tells you that they can send or receive money for you to/from Iran, please make sure that you ask to see a copy of their money transmittal license(s) as well as their OFAC authorization before engaging in any services.

7) How can my family send money from Iran to the US? Can they send it directly through a bank?

There is still no direct banking relationship between Iran and the United States. This means that you cannot directly transfer money through banks from Iran to the United States. You must still use the services of a currency exchange broker from Iran. That means your family will give rials in Iran to the currency exchange broker and the broker will in turn arrange for the sending of funds from a third country into the United States.

8) When receiving money from Iran, is it better to receive deposits from a third country or from directly within the US?

When receiving money from Iran it is important to ensure that the transfer comes from a third country bank and not from inside the United States. Although the regulations specifically do not state this, the government’s interpretation of the regulations is that, when receiving a money transmittal from Iran via a currency exchange broker, the funds have to be routed through a third country bank. This means that the deposit must be sent from a third country and not from inside the United States. Fund transfers that are deposited from inside the United States, for example by way of a wire transfer, cash deposit or internal branch deposit, violate the regulations.

9) Can I open a bank account in Iran?

A U.S. Person (i.e. a citizen or legal permanent resident/green card holder) CANNOT own and maintain a bank account in Iran. Similarly, you cannot open a bank account in Iran to deposit funds related to the sale of real property. In the eyes of the US government, any new investment in Iran is illegal and owning and maintaining a bank account in Iran is an example of an investment. Therefore, you are not permitted to own and operate a bank account in Iran.

10) Can I work in Iran?

A U.S. Person (i.e. a citizen or legal permanent resident/green card holder) is not permitted to work in Iran unless that person has obtained authorization from OFAC. This means that if you are a U.S. person and you travel to Iran, you cannot own a business in Iran. Similarly, you cannot work in Iran. This is viewed as an exportation of services to Iran and is in violation of the sanctions regulations. Please be advised that this is true even if you are not living in the U.S.

11) Can an Iranian national (NOT a citizen or legal permanent resident/green card holder) open and maintain an account in the United States?

An Iranian national or someone who is ordinarily a resident of Iran may not open and maintain a bank account in the United States. What often happens is that, when an Iranian national is visiting the United States and is in the United States, banks will open accounts for that person because they are currently in the U.S. However, once that person leaves the U.S., those accounts become restricted because it is not allowed for U.S. depository institutions or banks to open and maintain bank accounts for Iranian nationals.

12) Have there been any major changes in the Iran sanctions or laws permitting the transfer of funds from Iran to the U.S. under the Trump Administration?

As of the date of this entry, we have not seen any major changes administered by the Trump administration regarding the allowance of the transfer of funds from Iran to the United States. OFAC’s sanctions regulations pertaining to Iran remain largely the same as before. Similarly, the process of receiving money from Iran, sending money to Iran and conducting business with Iran remain the same.

 

For a Persian/Farsi Translation please click here:  پرسشهاي متداول درباره قوانين تحريمهاي ايران

There should be no doubt that, as Americans, we are all concerned about the threat of terrorism. Keeping our country and our loved ones safe is our first priority. That’s why when you hear President Trump and members of his administration talk about the travel ban, it sounds like a relatively harmless and easily justified means to reach the most important end: to protect America and Americans. Trump and his administration explain the ban as a “temporary” measure to keep “radical jihadists” and “bad dudes” out of the country. According to the administration, the deportations, detentions, and “additional screenings” impact “only a small percent” of travelers and it’s worth it to “keep America safe.” But when you take a closer look at the law, there is a clear disconnect between what the White House says about the executive order and the actual language and implementation of the order.

Here are some factual examples to consider:

THE ORDER TARGETS THE WRONG COUNTRIES: The order targets nationals from certain countries (i.e. Iran) that have NEVER been linked to or arrested for any acts of terror on American soil. On the other hand, other countries whose nationals HAVE been linked to acts of terror (ie. Saudi Arabia, Egypt, Pakistan, U.E.A) are not included on the list. So then why are certain “bad dudes” who have committed terrorist acts free to enter the U.S. while others, who have never done so, are barred from entry?

THE TEMPORARY BAN IS NOT SO TEMPORARY: The “temporary” 90-day ban is not truly temporary when you read the actual text of the order. The order suspends the issuance of immigration benefits to nationals from the 7 listed countries for a period of 30 days, during which time various U.S. government agencies are to determine the additional information needed on applicants and immigrants from the listed countries in order to better determine whether that individual is a threat to the United States. Then, those listed countries are given 60 days to provide the U.S. government the requested information. If they fail to do so, the suspension will remain in effect indefinitely. By virtue of the fact that these 7 nations are on the list of banned countries and the fact that they are also sanctioned countries, we know that the U.S. sees these nations as hostile states acting against U.S. interests. Therefore, it is unrealistic to expect that any country will provide the U.S. with information about their nationals. As a result, this ban will not actually be temporary, a fact that Trump and his advisers had to have known from the start.

THE ORDER ASKS GOVERNMENTS BELIEVED TO SPONSOR TERRORISM TO PROVIDE INFROMATION ON TERRORISTS: For the sake of argument, let’s assume that the listed countries are willing to respond. Will the U.S. government even trust that information? Let’s use Iran for an example. Trump and the U.S. government believe that the Iranian government supports and sponsors terrorism globally. In fact, supporters of the ban repeatedly refer to the governments of those countries on the list as terrorists. Are we then asking a regime that is believed to sponsor terrorism to give us true and accurate information regarding potential terrorists and terrorist threats? Will that keep America safe?

THE ORDER COMPLETELY DISREGARDS OUR CURRENT STRINGENT LAWS REGARDING THE ISSUANCE OF IMMIGRATION BENEFITS TO FOREIGNERS: When the current administration talks about the ban, they make it seem like our government has no system in place for vetting foreigners and that anyone can just come to the U.S. on a whim. The administration uses this argument to explain why “additional information” is needed from the listed countries in order to ensure our country’s safety. This is simply not true. The United States government already has extensive security measures in place when reviewing applications or petitions from ANY and ALL foreign nationals for immigration benefits. When an individual wants to enter the U.S., or obtain immigration benefits, that applicant is required to provide detailed information regarding their background including but not limited to information on their parents, spouses, children, employers and employment history, all previous residences, any issues with law enforcement, and convictions or criminal or violent history. In addition to gathering all this information, the U.S. government conducts an extensive background check on each applicant. These checks can last for several months, and in some cases, have even gone for years. Are these measures not enough to keep America safe? What additional information will the Secretary of Homeland Security, Secretary of State, and Director of Intelligence come up with to require the governments of the 7 countries to provide? And is it realistic to expect those governments, deemed by the U.S. to be acting against U.S. interest, to provide us with information regarding their nationals?

Regardless of one’s political affiliation, we are Americans first and we should put America and our American values first. When facing a discriminatory order that targets individuals based on national origin and religion and thereby undermines long held American values, we should at the very least look at the language of that order to see whether it achieves the stated goal. In this case, the goal of the order is in the name: PROTECTING THE NATION FROM FOREIGN TERRORIST ENTRY INTO THE UNITED STATES. But instead, it targets a group of nationals most of whom have not been linked to acts of terror in the U.S. At its core, it is asking governments and countries the U.S. believes to sponsor and support terrorism to provide the U.S. with anti-terrorism intelligence. For these reasons, the order does not make rational sense.

Since its issuance on January 27, 2017, the vague and overbroad order has done nothing but cause confusion, chaos, and division in our country. Our government has spent millions of tax payer dollars implementing an order resulting in the denial of entry, deportation and detention of hundreds of valid visa holders and legal permanent residents of the United States. Thousands of lives, including those of U.S. citizens and permanent residents, have been impacted by the order. Families have been torn apart. Our judicial system has been flooded with cases nationwide. And all for what? To implement an order that tears away at the principles embodied in our Constitution while doing little if anything at all to keep our country safe.

Our office continually receives calls and emails regarding the lifting of nuclear sanctions and how that impacts U.S persons. The most common question asked is whether the Unites States still has sanctions in place against Iran. The answer is YES.

Implementation Day, which took place in January of 2016, resulted in some changes to U.S. sanctions law that do impact U.S. persons and entities. More specifically, the U.S. government took the following steps:

  • issued a statement of favorable licensing policy regarding the export, reexport, sale, lease or transfer of commercial passenger aircraft and related parts and services to Iran for exclusively civil, commercial passenger aviation end-use;
  • issued a general license authorizing non-U.S. entities that are owned or controlled by a U.S. person (“U.S.-owned or -controlled foreign entities”) to engage in activities hat are consistent with the JCPOA and applicable U.S. laws and regulations; and
  • issued a general license authorizing the importation into the United States of Iranian-origin carpets and foodstuffs, including pistachios and caviar.

Outside of the changes outlined above, all of the other changes involved NON-U.S. persons and entities. Therefore U.S. persons and U.S. companies continue to be broadly prohibited from engaging in transactions or dealings with Iran and the Government of Iran unless such activities are exempt from regulation or authorized by OFAC. The majority of the sanctions lifted on Implementation Day DO NOT apply to U.S. persons and entities. Therefore U.S. persons and U.S. companies continue to be broadly prohibited from engaging in transactions or dealings with Iran and the Government of Iran unless such activities are exempt from regulation or authorized by OFAC.

Before engaging in any type of transaction with Iran, US persons (meaning any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States) must still ensure that that comply with the US sanctions and regulations. For more information contact our firm today.

On January 16, 2016, also known as Implementation Day, the United States government lifted certain nuclear-related secondary sanctions it had in place against Iran. Although Implementation Day resulted in some changes to U.S. sanctions law, many sanctions prohibiting U.S. persons from dealing with Iran are still in place. This article begins by giving an overview of the Nuclear Deal and Implementation day and then moves to outline the removal of the secondary sanctions concerning non-U.S. persons, and finally closes by discussing the impact of Implementation Day on U.S. persons.

 

Section I:   Overview of the Joint Comprehensive Plan of Action and Implementation Day

On July 14, 2015, the P5+1 (China, France, Germany, Russia, the United Kingdom, and the United States), the European Union (EU), and Iran reached a Joint Comprehensive Plan of Action (JCPOA) to ensure that Iran’s nuclear program will be exclusively peaceful.

On January 16, 2016, Implementation Day, upon confirmation that Iran met obligations under JCPOA, the U.S. lifted nuclear-related sanctions against Iran. It is important for U.S. persons (meaning any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States) that the secondary nuclear-related sanctions are generally aimed at non-U.S. persons for specified conduct that occurs entirely outside of the United States. As a result, many of the changes in the regulations that took place on Implementation Day DO NOT impact U.S. persons directly.

The primary U.S. sanctions (i.e. the domestic trade embargo) against Iran and the main body of sanctions law as outlined by the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560 (ITSR) remains in place. Therefore, even after Implementation Day and the lifting of the nuclear sanctions, with limited exceptions, U.S. persons (as defined above) – including U.S. companies – continue to be broadly prohibited from engaging in transactions or dealings with Iran or its government. Therefore, it remains impetrative that U.S. persons ensure that a particular transaction and/or conduct at issue are permitted under the current regulations before engaging in any conduct, commercial or other, vis-à-vis Iran.

 

Section II:    The Nuclear-related Secondary Sanctions Lifted on Implementation Day

Financial and Banking-related Sanctions

On Implementation Day, the U.S. lifted certain sanctions that restricted the financial and banking activities non-U.S. persons could engage in relating to Iran. In particular, beginning on Implementation Day, the following activities by non-U.S. persons are no longer sanctionable: activities, including financial and banking transactions, with the Government of Iran (GOI), the Central Bank of Iran (CBI), Iranian financial institutions, and other Iranian persons including the provision of loans, transfers, accounts (including the opening and maintenance of correspondent and payable-through accounts at non-U.S. financial institutions), investments, securities, guarantees, foreign exchange (including Iranian rial-related transactions), letters of credit and commodity futures or options, the provision of specialized financial messaging services and facilitation of direct or indirect access thereto, the purchase or acquisition by the GOI of U.S. bank notes, and the purchase, subscription to, or facilitation of the issuance of Iranian sovereign debt as well as providing specialized financial messaging services to the CBI and Iranian financial institutions.

 

Sanctions Related to Insurance

Beginning on Implementation Day, non-U.S. persons are authorized to provide underwriting services, insurance, or re-insurance in connection with activities consistent with the JCPOA, including activities with individuals and entities set forth in the regulations, including underwriting services, insurance, or re-insurance in connection with activities in the energy, shipping, and shipbuilding sectors of Iran, for National Iranian Oil Company (NIOC) or National Iranian Tanker Company (NITC), or for vessels that transport crude oil, natural gas, liquefied natural gas, petroleum, and petrochemical products to or from Iran.

 

Sanctions Related to Iran’s Energy and Petrochemical Sectors

Beginning on Implementation Day such sanctions, including sanctions on associated services, do not apply to non-U.S. persons who: (i) are part of the energy sector of Iran; (ii) purchase, acquire, sell, transport, or market petroleum, petroleum products (including refined petroleum products), petrochemical products, or natural gas (including liquefied natural gas) to or from Iran; (iii) provide to Iran support, investment (including through joint ventures), goods, services (including financial services), and technology that can be used in connection with Iran’s energy sector, the development of its petroleum resources, and its domestic production of refined petroleum products and petrochemical products; or (iv) engage in activities with Iran’s energy sector, including NIOC, NITC, and Naftiran Intertrade Company (NICO).

 

Sanctions Related to Iran’s Shipping and Shipbuilding Sectors and Port Operators

On Implementation Day such sanctions, including sanctions on associated services, do not apply to non-U.S. persons who are part of the shipping or shipbuilding sectors of Iran or who: own, operate, control, or insure a vessel used to transport crude oil, petroleum products (including refined petroleum products), petrochemical products, or natural gas (including liquefied natural gas) to or from Iran; operate a port in Iran, engage in activities with, or provide financial services and other goods and services used in connection with, the shipping and shipbuilding sectors of Iran or a port operator in Iran, including port services, such as bunkering and inspection, classification, and financing, and the sale, leasing, and provision of vessels to Iran.

 

Sanctions Related to Gold and Other Precious Metals

Beginning on Implementation Day such sanctions, including sanctions on associated services, do not apply to non-U.S. persons who sell, supply, export, or transfer, directly or indirectly, to or from Iran, gold and other precious metals, or conduct or facilitate a financial transaction or provide services for the foregoing, including any security, insurance, and transportation.

 

Sanctions Related to Software and Metals

Beginning on Implementation Day such sanctions, including sanctions on associated services, do not apply to non-U.S. persons who sell, supply, or transfer, directly or indirectly, graphite, raw or semi-finished metals such as aluminum and steel, coal, and software for integrating industrial processes, to or from Iran in connection with activities consistent with the JCPOA, including trade with certain individuals and entities, and the sale, supply, or transfer of such materials to the energy, petrochemical, shipping, and shipbuilding sectors of Iran, and Iranian ports, or conduct or facilitate a financial transaction or provide services for the foregoing, including insurance and reinsurance.

 

Sanctions Related to the Automotive Sector

Beginning on Implementation Day such sanctions, including sanctions on associated services, do not apply to non-U.S. persons who conduct or facilitate financial or other transactions for the sale, supply, or transfer to Iran of goods and services used in connection with the automotive sector of Iran.

 

III.    Changes to U.S. Sanctions Law that Impact U.S. Persons

In addition to lifting certain secondary nuclear-related sanctions described above, on Implementation Day, the U.S. government also made certain changes to U.S. sanctions that law more directly impact U.S. persons. More specifically, the U.S. took the following steps:

  • issued a statement of favorable licensing policy regarding the export, reexport, sale, lease or transfer of commercial passenger aircraft and related parts and services to Iran for exclusively civil, commercial passenger aviation end-use;

 

  • issued a general license authorizing non-U.S. entities that are owned or controlled by a U.S. person (“U.S.-owned or -controlled foreign entities”) to engage in activities hat are consistent with the JCPOA and applicable U.S. laws and regulations; and

 

  • issued a general license authorizing the importation into the United States of Iranian-origin carpets and foodstuffs, including pistachios and caviar.

 

Statement of Licensing Policy for Activities Related to the Export or Reexport to Iran of Commercial Passenger Aircraft and Related Parts and Services (SLP)

On Implementation Day, OFAC issued a statement of licensing policy which establishes a favorable licensing policy regime through which U.S. persons and non-U.S. persons may request specific authorization from OFAC to engage in transactions for the (i) export, reexport, sale, lease or transfer to Iran of commercial passenger aircraft for exclusively civil aviation end use, (ii) export, reexport, sale, lease or transfer to Iran of spare parts and components for commercial passenger aircraft; and (iii) provision of associated services, including warranty, maintenance, and repair services and safety-related inspections, for all the foregoing, provided that licensed items and services are used exclusively for commercial passenger aviation. Please not that any export, reexport, or transfer of U.S. export-controlled items must be consistent with other U.S. legal requirements.

 

General License Authorizing Activities by Non-U.S. Persons that are Owned or Controlled by a U.S. Person

On Implementation Day, OFAC issued General License H (GLH) authorizing U.S.-owned or controlled foreign entities to engage in certain transactions involving Iran that would otherwise be prohibited. More specifically, the general license allows U.S.-owned or controlled foreign entities to engage in the same type of transactions that non-U.S. entities are now permitted to engage in as a result of the lifting the secondary nuclear-related sanctions as noted in Part II of this article and outlined above.

An entity established or maintained outside the United States is “owned or controlled” by a U.S. person if the U.S. person: (1) holds a 50 percent or greater equity interest by vote or value in the entity; (2) holds a majority of seats on the board of directors of the entity; or (3) otherwise controls the actions, policies, or personnel decisions of the entity.

GLH does not authorize U.S.-owned or -controlled foreign entities to engage in any transactions involving: (1) the direct or indirect exportation or reexportation of goods, technology, or services from the United States (without separate authorization from OFAC); (2) any transfer of funds to, from, or through the U.S. financial system; (3) any individual or entity on the SDN List or any activity that would be prohibited by non-Iran sanctions administered by OFAC if engaged in by a U.S. person or in the United States; (4) any individual or entity identified on the FSE List; (5) unless authorized by the U.S. Department of Commerce, activity prohibited by, or requiring a license under, part 744 of the U.S. Export Administration Regulations (EAR) or a person whose export privileges have been denied pursuant to part 764 or 766 of the EAR; (6) any military, paramilitary, intelligence, or law enforcement entity of the Government of Iran, or any officials, agents, or affiliates thereof; (7) any activity that is sanctionable under E.O. 12938 or 13382 (relating to Iran’s proliferation of weapons of mass destruction and their means of delivery, including ballistic missiles); E.O. 13224 (relating to international terrorism); E.O. 13572 or 13582 (relating to Syria); E.O. 13611 (relating to Yemen); or E.O. 13553 or 13606, or section 2 or 3 of E.O. 13628 (relating to Iran’s commission of human rights abuses against its citizens); and (8) any nuclear activity involving Iran that is subject to the procurement channel established pursuant to paragraph 16 of UNSCR 2231 (2015) and section 6 of Annex IV of the Joint Comprehensive Plan of Action of July 14, 2015 and that has not been approved through the procurement channel process.

In addition, GLH authorizes U.S. persons to engage in certain activities otherwise prohibited by the ITSR, namely, activities related to the establishment or alteration of corporate policies and procedures to the extent necessary to allow U.S.-owned or -controlled foreign entities to engage in transactions involving Iran that are authorized under GLH, and making available to foreign entities they own or control certain automated and globally integrated business support systems.

Please be advised, however, that with the exception of activities authorized in GLH, the prohibition on facilitation by United States persons under the current U.S. sanctions law (ITSR) will remain in effect.

 

General License Authorizing the Importation of Iranian-Origin Carpets and Foodstuffs

OFAC has issued a regulatory amendment to the ITSR, effective upon publication in the Federal Register, to authorize the importation into the United States of Iranian-origin carpets and foodstuffs, including pistachios and caviar.

This authorization covers: (i) carpets and other textile floor coverings and carpets used as wall hangings that are classified under chapter 57 or heading 9706.00.0060 of the Harmonized Tariff Schedule of the United States, and (ii) foodstuffs intended for human consumption that are classified under chapters 2-23 of the HTS.83

Carpets and foodstuffs authorized for importation pursuant to the general license are still subject to all other laws and regulations applicable to goods imported into the United States, including generally applicable laws and regulations administered by other departments and agencies, such as the Departments of Agriculture or Commerce, the Food and Drug Administration, or Customs and Border Protection.

In addition, under an accompanying provision, U.S. depository institutions are authorized to process letters of credit for payments for Iranian-origin carpets and foodstuffs, and U.S. persons are authorized to act as brokers for the purchase or sale of Iranian-origin carpets and foodstuffs authorized to be imported into the United States under the general license.

With the exception of the three categories of activities described above, the sanctions lifted on Implementation Day do not apply to U.S. persons and entities. Therefore U.S. persons and U.S. companies continue to be broadly prohibited from engaging in transactions or dealings with Iran and the Government of Iran unless such activities are exempt from regulation or authorized by OFAC.

Please be advised that this article is intended to provide general information regarding the current U.S. sanctions law and is not intended to serve as a substitute for legal advice. For more specific information regarding the current sanctions regulations and your case, please speak to an experienced attorney.

Please feel free to contact our firm with any questions at 310-780-6360 or by email via our website www.yazdanyarlaw.com.

 

 

 

 

Most Iranian-Americans are aware of the fact that certain types of fund transfers relating to Iran are permitted under the current Iran sanctions as administered by the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC).

For example, per Section 560.550 of the Iranian Transactions and Sanctions Regulations (the ITSR), the receipt of non-commercial family money from Iran is currently permitted. Similarly, as outlined in Section 560.543 of ITSR, the sale of real property in Iran and transfer of real property proceeds from Iran to the United States is permitted under the current regulations, provided that the real property at issue was acquired before an individual became a U.S. person or was inherited from persons in Iran after an individual became a U.S. person.

While these transactions are indeed allowed, the fact that there is no banking relationship between Iran and the U.S. still creates an issue that must be addressed. As a result, the only acceptable way to transfer funds from Iran to the U.S. is by using the services of a currency exchange broker in Iran (often referred to as a “sarafi”). When using the services of a money exchange broker, one is in essence selling the Iranian currency (rials/toman) to the broker in Iran and purchasing U.S. dollars to be delivered in the United States. Currency exchange brokers use one of two methods to deliver funds: 1) the broker can wire the funds to the United States via a third country bank or 2) the broker can find a customer or an agent to deposit the funds directly into the recipient’s account in the United States via cash, check, money order or bank transfer. However, this second method of transfer is VERY dangerous in that the recipient does not know who is depositing the funds and whether that person is engaging in any illegal activity.

Furthermore, this type of internal wire transfer has recently led to many cases of fraud resulting in the recipient’s funds being seized and their accounts being closed. In some cases, the recipient has even been investigated by the bank at issue or by various law enforcement agencies.

Our office has seen an increase in this type of investigation in this past year. From what we can deduce, the broker in Iran often works with another third-party broker who has agents in the United States. That agent or representative is supposed to deposit the funds into the recipient’s account in the United States. Instead of doing so however, the agent calls unsuspecting people in the United States posing as an IRS agent and proceeds to tell the caller that he or she is delinquent in payments to the government and that, if they don’t immediately pay the amount due, they will be arrested. They then provide your account number for the deposit. The agent placing the call is often very convincing and the receiver of the call sincerely believes that they are in trouble. As a result, they immediately go into the bank and make a cash, check or money order deposit into the recipient’s account.

In this scheme, the recipient thinks that the deposit is related to the funds coming from Iran and the third-party broker and/or agent ends up taking all of the money (instead of a small percentage that they are entitled to). Resulting in some poor person being defrauded out of their hard earned money. Eventually the defrauded individual realizes that this was a scam and contacts the bank/or local authorities, which then leads to an investigation of the recipient’s account. This investigation often starts at the bank level and then escalates to involve local and in some cases federal law enforcement agencies.

Given that the funds were deposited into the recipient’s account, the recipient appears to be a part of the fraud ring and becomes a prime suspect. Therefore, his or her account(s) will often be frozen or blocked during the duration of the investigation.

In most cases, our office has been able to successfully show that our clients were innocent and that they, too, were a victim of fraud. However, depending how far the matter escalates, this process could take months or even years and it may result in the recipient losing a portion of the funds.

You can protect yourself against these types of money transmittal problems by educating yourself on the legal and proper channels of transferring funds from Iran to the U.S. Fund transfers from Iran should be deposited into a recipient’s account via a wire transfer from a third country and NEVER from inside the United States. Also, before receiving the funds, the recipient should ensure that he or she has filed the proper compliance documents with his or her bank in the United States. For more information regarding this process, please contact our firm at 310-780-6360 or by email via our website www.yazdanyarlaw.com.