With the US sanctions on Iran reimposed, European firms must analyse their transaction before putting it on a train to Iran. However, there are ways to deal with these limitations. Sebastiaan Bennink and Yvo Amar, both specialists in sanctions law at Wladimiroff lawyers, will explain how to do business with Iran in a workshop at the Freight and Terminal Forum.

The workshop takes place on 28 March, the last day of the rail freight exhibition fair. The Freight and Terminal Forum is a three-day event held in Utrecht, the Netherlands from 26-28 March. “Internationally operating companies are always confronted with increasing risks in the area of sanction law and export control legislation. We will talk about the latest developments and how to deal with these risks”, said Bennink.

US sanctions

On 4 November 2018, the list of sanctioned products was extended to include the purchase of petroleum and petrochemical products with a number of Iranian oil companies, and the Iranian energy sector. Moreover, sanctions were put in place on foreign financial institutions transacting with the Central Bank of Iran and other Iranian financial institutions, as well as the provision of certain financial messaging services to Iran’s central bank and other Iranian financial institutions. Also trade with Iranian ports is now sanctioned.

These latest sanctions came on top of those already imposed in August last year. These include, among others, sanctions on the Iranian automotive industry, as well as supply or trade of metals such as aluminum and steel, graphite, coal and certain software for integrating industrial processes. Moreover, gold and other precious metals are now sanctioned .

Long arm

Although Europe has not re-imposed the sanctions it lifted in 2016, European shippers are definitely not out of reach for the long arm of the US. This is in the first place because most transactions include, in one way or another, a link with the US, explained Bennink. “Many financial institutions in Europe also have a presence in the US and are therefore reluctant to do business in Iran at the moment.”

Moreover, companies in Europe often deal with the US at one point, and when they are in breach of US law they will face a problem in doing so. “The US may not punish a European citizen not present in the US, but in this way it has found alternative means to target Europe with the sanctions”, said Bennink.

EU Response

As a response to the US sanctions on Iran, the EU adopted the EU Blocking Statute. This legislation forbids European persons and entities to comply with the secundary santions. In addition, when persons or entities are fined according to the US sanctions, they are eligible for compensation. Non-European legislation that runs counter to these rules is not recognised in the EU. In addition to this legislation, INSTEX was established. This is a sort of barter system allowing companies in the EU, and potentially elsewhere, to completely avoid the U.S. financial system by eliminating cross-border payments.

When companies look at all these factors, they are likely to pull out of doing business with Iran because it all seems too complicated, said Bennink. “This is not necessarily true. It can still be possible to deal with Iran, but you have to do your homework. When you intend to do business with Iran, you should look at the type of product, the person you are dealing with, the sector of your product and the end consumer. You have to be well aware of rules, or hire a lawyer that can look into your transaction.”

Workshop

Are you interested in this workshop or would you like to join the discussion? Registration is free of charge. You must first register for the Freight & Terminal Forum, Expo only. Then, you visit the workshop programme and select the workshop of your choice.

Date: 28 March 2019
Time: 13:15 – 14:00