New sanctions provisions related to the Iranian financial sector

On 31 December 2011, the President signed into law the National Defense Authorization Act for Fiscal Year 2012, which contains new sanctions provisions related to the Iranian financial sector. The new sanctions involve measures against the Iranian financial institutions as well as measures that could be imposed on non-U.S. financial institutions that, after a specified period after the enactment, engage in certain activities involving the Central Bank of Iran and designated Iranian financial institutions. The new law is expected to have an impact on foreign financial institutions and central banks doing business with the Iranian financial sector because it would create exposure for such institutions that could result in them being cut-off from the U.S. financial system. We note that the European Union (EU) is considering additional sanctions targeting Iran's ability to export oil to EU member states, but those measures have not yet been finalized.

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