U.S. companies liable for foreign subsidiaries’ violations of Iran trade sanctions 

October 10: President Obama on October 9, 2012, signed an Executive Order holding U.S. parent companies liable for violation of the Iranian trade sanctions made by their foreign subsidiaries.

According to the Executive Order [PDF 26 KB] and a list of “frequently asked questions” (FAQs), from the Treasury Department pertaining to section 4 of the Executive Order, foreign subsidiaries of U.S. companies are prohibited from knowingly violating the Iranian Transactions Regulations, E.O. 13599, section 5 of E.O. 13622, or Section 12 of the new Executive Order, and civil penalties can be imposed on the U.S. parent company for any such violations.

FAQs

The Treasury Department’s FAQs address:


  • What is the new prohibition on foreign subsidiaries of U.S. persons and how does it work?
  • Are foreign subsidiaries of U.S. companies covered under Treasury’s Office of Foreign Asset Controls (OFAC) general licenses and/or permitted to apply for specific licenses from OFAC?
  • Is there a wind down or safe harbor provision?


For more information, contact a professional with KPMG’s Trade & Customs practice:


Douglas Zuvich

(312) 665-1022


Andrew Siciliano

(631) 425-6057


John L. McLoughlin

(267) 256-2614


Todd R. Smith

(949) 885-5617


Luis A. Abad

(212) 954-3094


Amie Ahanchian

(202) 533-3247


Or your local KPMG Trade & Customs professional.




©2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


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.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
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.

Subscribe

Current and future KPMG clients may subscribe to TaxNewsFlash email alerts.


Email your contact information.

Other TaxNewsFlash publications

TaxNewsFlash-Trade & Customs by year