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07/8/2010 The Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010

The Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, Pub. L. 111-195, imposes additional economic sanctions in an effort to stop or at least impede Iran’s nuclear program and terrorist activities. The 2010 Act expands the sanctions of the Iran Sanctions Act of 1996.  This will be of particular concern to financial institutions, as prohibited financial activities will extend beyond financing sanctioned entities to foreign exchange and transfers of credit or payments between financial institutions where the transfers involve “any interest of the sanctioned person.”

Financial institutions should verify that their interdiction software is updated to include foreign exchange and banking transactions that might involve sanctioned persons.  The Act provides, however, that no one can bring a civil, criminal, or administrative action against a registered investment company based solely on the company divesting from, or avoiding investing in, securities issued by persons that conduct or have direct investments in the Sudan or Iran.  The SEC is to issue regulations on public disclosures that will be required for such divestments.

The 2010 Act contains a section providing sanctions against persons “responsible for or complicit in human rights abuses committed against citizens of Iran or their family members after the June 12, 2009, elections in Iran.”  The President is to provide a list of such persons to congressional committees.  The list is to be unclassified, but some names may be kept in a classified annex.

The Iran Sanctions Act will be discussed in detail in the August issue of the Monitor.

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