No More Safe Harbors: New Statute Expands Iran Sanctions Liability for U.S. Parent Companies
By SCOTT FLICKER & DEVON WINKLES
A new U.S. law implemented this week, the Iran Threat Reduction and Syria Human Rights Act of 2012, greatly expands the extraterritorial reach of the U.S. Iran sanctions program by, for the first time, imposing liability on a U.S. company for any action by its foreign subsidiary that contravenes prohibitions against transactions with Iran previously only applicable to U.S. companies and individuals. Moreover, the U.S. parent can be subject to sanctions liability even if it had no actual knowledge of its subsidiary's conduct. The result could be strict liability against U.S. parents for sanctions conduct of the subsidiary.