EU: Sanctions update, companies trading with Iran

Companies trading with Iran

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.

Related content

KPMG observation

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

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Request for proposal

 

Submit

KPMG's new digital platform

KPMG's new digital platform