Alert February 28, 2012

OFAC Releases FAQs on Iranian Sanctions under Section 1245 of National Defense Authorization Act of 2012

The Office of Foreign Assets Central (“OFAC”) released guidance in the form of frequently asked questions (“FAQs”) concerning Section 1245 of the National Defense Authorization Act of 2012 (the “NDAA”).  The NDAA designates the entire Iranian financial sector as a “jurisdiction of primary money laundering concern” and takes additional actions to isolate Iran from the global economy.  The FAQs provide guidance on, among other things, OFAC’s interpretation of key terms under the NDAA and the scope of institutions that may be subject to sanctions under the NDAA.  In addition, the FAQs discuss the interaction of Section 1245 of the NDAA with somewhat similar sanctions applicable to foreign financial institutions under the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2012.  Subsequently, on February 27, 2012, OFAC issued regulations, effective February 27, 2012, under Section 1245(d) of the NDAA regarding the imposition of sanctions with respect to the Central Bank of Iran and designated Iranian financial institutions.