Companies planning to do business in Iran after the relaxation of international sanctions, expected by the end of this year, should continue to check they are compliant with the law, Herbert Smith Freehills says in the Iran investment guide published today.
“The key to managing risks under sanctions laws is conducting appropriate risk-based due diligence, both on proposed contractual counterparties….and transaction structures,” the international law firm says. “This will include ensuring that the identities of all individuals and entities with whom any dealings are envisaged are known and screened against the relevant sanctions lists, as well as ensuring that discussions do not extend beyond the scope of what is allowed under relevant sanctions.”
Herbert Smith Freehills says that non-US persons signing contracts before Implementation Day when nuclear-related US, UN and EU sanctions are relaxed could expose themselves to secondary sanctions.
“US persons, in particular, should seek specific advice about any travel to or dealing with Iran,” Herbert Smith Freehills says. “…non-US investors should consider putting in place appropriate control where they have US affiliates, important support functions based in the US, or US directors or employees working in their business to avoid creating risks under US law.”
Companies signing deals with Iran or Iranian individuals or businesses should protect themselves against the application of snap-back provisions in the Joint Comprehensive Plan of Action signed in July.
“…investors should consider at the outset negotiating appropriate representations, warranties, exit and termination rights and remedies with their counterparts…,” Herbert Smith Freehills says.