Iran Sanctions Update: United States Sanctions Iran’s Supreme Leader and the Supreme Leader’s Office, and Expands Sanctions Authorities Targeting Iranian Officials and Front Companies; Foreign Financial Institutions That Conduct Transactions for the New Sanctions Targets Also May Be Sanctioned

Sullivan & Cromwell LLP - June 26, 2019

On June 24, 2019, President Trump signed Executive Order 13876 “Imposing Sanctions with Respect to Iran” (the “E.O.”).  The E.O. imposes sanctions on the Supreme Leader of the Islamic Republic of Iran (the “Supreme Leader”), the Supreme Leader’s Office (the “SLO”), and certain other persons as designated by the Secretary of the Treasury pursuant to the E.O. (“Sanctioned Persons”).  Effective immediately, all property and interests in property of the Supreme Leader and the SLO that are in the United States, that subsequently come within the United States, or that subsequently come within the possession or control of any U.S. person, must be blocked (i.e., frozen) and may not be transferred, paid, exported, withdrawn, or otherwise dealt in.  The same restrictions will apply to any other Sanctioned Person at the time the U.S. Department of the Treasury’s Office of Foreign Assets Control, acting under authority delegated by the Secretary of the Treasury, designates them as such pursuant to the E.O.  The E.O. also authorizes the Secretary of the Treasury to impose sanctions on foreign financial institutions that knowingly conduct or facilitate any significant financial transaction for or on behalf of any Sanctioned Person.  The E.O. was issued in direct response to the increasing tensions between Iran and the United States, coming less than a week after Iran’s downing of an unmanned U.S. aircraft over the Strait of Hormuz and just days after President Trump’s reported decision to call off planned retaliatory military strikes, and is a continuation of the economic pressure campaign with respect to Iran the Administration has been pursuing following the United States’ withdrawal from the Joint Comprehensive Plan of Action.