INTERNATIONAL SANCTIONS DEVELOPMENTS
By:
Preston Brown
Washington, D.C.
1. Reporting on Iranian Transactions
The Treasury Department's Office of Foreign Assets Control ("OFAC") has amended the regulations governing the reporting requirements for Iranian oil related transactions by foreign affiliates of U.S. persons (31 C.F.R. § 560.603, the "Regulations") principally by establishing a minimum one million total dollar threshold per quarter for reportable transactions and allowing more time in which to file a report. A foreign affiliate means a person or entity owned or controlled by a U.S. person or persons that is "organized or located outside the United States" and which itself is not a U.S. person.
A reportable transaction would include the following: (i) any purchase, sale, or swap of Iranian-origin crude oil, natural gas, or petrochemicals (a purchase, sale or swap is deemed to have occurred as of the date of the bill of lading used in connection with such transaction); (ii) the sale of services (including insurance or financing) or goods (including oilfield supplies or equipment) to the Government of Iran or an entity in Iran for use in the exploration, development, production, processing, pumping, lifting, transporting, or refining of crude oil, natural gas, or petrochemicals. In this context, the sale of services is deemed to have occurred as of the date of loan or commitment, in the case of financial or insurance services, or the date on which services are invoiced, in other cases. The sale of goods is deemed to have occurred as of the date of shipment to Iran.
The U.S. person must file a report with OFAC within 60 days after the end of each calendar quarter for each foreign affiliate that engaged in a reportable transaction or transactions totaling U.S.$ 1,000,000 or more during the prior calendar quarter. A single U.S. entity within a consolidated or affiliated group may be designated to report on foreign affiliates of U.S. members of the group. Reports must include (i) the name, address, principal place of business and (if an entity) the place of incorporation or organization of the U.S. person as well as the name, title and telephone number of the contact person; (ii) the name, address and type of entity of the foreign affiliate; (iii) the nature of the transaction; a description of the product, technology or service involved; (iv) the name of the Iranian or third country party or parties involved; and (v) the currency and amount of the transaction (including the corresponding dollar value if not in U.S. dollars).
2. Sanctions on Investment in Burma
Based on a declaration of national emergency because of the Burmese Government's large-scale repression of the democratic opposition in Burma, on May 20, 1997, the President issued an Executive Order prohibiting new investment in Burma by U.S. persons. The Executive Order prohibits U.S. persons from entering into an agreement after May 20, 1997 with the Government of Burma or a non-governmental entity in Burma which (a) includes the economic development of resources located in Burma (or the general supervision or guarantee of such development by another person); (b) the purchase of an ownership share, including an equity interest in the economic development of resources located in Burma; or (c) the participation in royalties, earnings or profits in such development without regard to the form of participation.
Resources located in Burma means all resources, including "natural, agricultural, commercial, financial, industrial and human resources" located in the territory of Burma (including Burma's territorial sea, exclusive economic zone or continental shelf). Economic development does not include not-for-profit educational, health or other humanitarian programs or activities.
Implementing regulations will be issued by OFAC.
