International Law Advisory - Treasury Designates Additional Entities for Supporting Iranian Proliferation of WMD

On July 26, 2006, the Department of Treasury, Office of Foreign Assets Control (“OFAC”), published a notice designating two Iranian entities under Executive Order 13382, which authorizes sanctions against entities and individuals involved in the proliferation of weapons of mass destruction.  The Executive Order freezes any assets of the designees that are in the possession of U.S. persons or subject to U.S. jurisdiction, and prohibits virtually all transactions between designees and any U.S. persons, including (i) the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated entity or person; and (ii) the receipt of any contribution, funds, goods, services, etc. from designated entities or persons. 

The two entities whose property and interests in property are blocked pursuant to Executive Order 13382 are:

1. SANAM INDUSTRIAL GROUP (a.k.a. SANAM INDUSTRIES GROUP), Pasdaran Road 15, Tehran, Iran.
   
2. YA MAHDI INDUSTRIES GROUP (a.k.a. YA MAHDI INDUSTRIAL COMPLEX; a.k.a. YA MAHDI INDUSTRIAL RESEARCH COMPLEX; a.k.a. "YMA''), PO Box 19395-4731, Tehran, Iran.

U.S. economic sanctions against Iran, as set forth in the Iranian Transactions Regulations (31 C.F.R. Part 560), already impose comprehensive restrictions on U.S. persons doing any business in or with Iran, although the ITR does not have a specific “blocking” provision.  Therefore, these additional designations do not materially change the compliance posture for U.S. companies and persons, but do impose the additional “blocking” requirement, which means that if parties come into possession of property that these designated entities have an interest, the acquisition of such property must be reported to OFAC, and the property generally cannot be dealt with further without specific OFAC authorization (except that blocked funds must be placed into interest-bearing accounts).

We will continue to keep you apprised of this and other developments related to sanctions and export controls issues.  If you have any questions, or desire further information on this or any related topic, please feel free to contact Ed Krauland at 202.429.8083.