The European Union, the United Nations, and the United States some two months ago partially lifted their nuclear-related economic and financial sanctions against Iran. There are notable differences between the sanctions relief of the EU and that of the United States. The EU lifted many of the nuclear-related sanctions. The United States, however, only lifted the nuclear-related “secondary sanctions”—that is, those directed toward non-U.S. persons for specified conduct involving Iran that occurs entirely outside of U.S. jurisdiction. This means the U.S. “primary sanctions” remain in force and preclude—apart from a few exceptions—U.S. companies (including U.S. banks) from engaging in direct dealings with Iran.
Because of the extra-territorial application of the U.S. Iranian sanctions rules, it remains essential that EU companies determine whether there are U.S. prohibitions on conducting business with Iran. For instance, some EU banks have been heavily penalized by U.S. sanctions authorities for violation of U.S. sanctions. EU businesses need to consider a “know your customer” due diligence process and consult their banks at an early stage to discuss whether a transaction is possible.
Read a March 2016 report prepared by the KPMG member firm in the Netherlands: EU and U.S. sanctions relief for Iran – some insights
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