Earlier today, the Trump Administration issued an Executive Order (EO) to impose sanctions on Iran’s oil, energy, financial, and shipping sectors.The EO follows the Administration’s recent withdrawal in May from the Joint Comprehensive Plan of Action (JCPOA), the multilateral agreement providing Iran with sanctions relief in exchange for halting its nuclear weapons program. Notably, these new sanctions mean that non-US firms could face “secondary sanctions,” which would block them from the US financial system, for conducting prohibited transactions with Iranian entities.
In anticipation of these restored sanctions, the EU in August implemented a “blocking statute” to prevent EU firms from complying with certain US sanctions on Iran. Caught in the middle of the political chess match are EU firms, which must decide whether or not to comply: (1) with the US sanctions and risk penalties under the EU blocking statute, or (2) with the EU anti-blocking statute and risk being blocked from the US financial system.
This Financial crimes observer provides our perspective regarding the EO, the blocking statute, and our advice on what EU firms should be doing now.
Financial Services Leader, PwC US
Global Financial Crimes Leader, PwC US
Partner, Financial Services Advisory, PwC US