Energy, shipping, and shipbuilding. Generally, these are the sectors of the Iranian economy that have recently come within the ambit of the existing U.S. sanctions regime against Iran. We write "generally" because in addition to those sectors, certain entities, transactions, and financial services will soon be subject to sanctions, as articulated in the Iran Freedom and Counter-Proliferation Act of 2012 ("IFCPA"). Moreover, certain exceptions and waivers apply to these newly enacted sanctions.

The IFCPA was entered into law when President Obama enacted the National Defense Authorization Act for Fiscal Year 2013 January 2, 2013. The Act generally requires sanctions in the following areas of activity:

• Energy, shipping, and shipbuilding. On or after July 1, 2013, the president must block and prohibit all transactions in property and property interests for persons that:

  1. Are part of Iran’s energy, shipping, and shipbuilding sectors

  2. Operate a port in Iran

  3. Knowingly provide significant support to these entities or persons on the Specially Designated Nationals List ("SDN List")
     
     In addition, on or after July 1, 2013, the president shall impose sanctions on any person that knowingly sells, supplies, or transfers significant goods or services used in connection with Iran’s energy, shipping, or shipbuilding sectors. Depending on supply and price, these sanctions apply to the purchase of petroleum or petroleum products from Iran. They do not, however, apply to natural gas, with certain exceptions.

• Precious metals and other materials. On or after July 1, 2013, the president shall impose sanctions on any person that knowingly sells, supplies, or transfers precious metals—directly or indirectly—to or from Iran.
  
  In addition, other materials are subject to sanctions under certain circumstances. Those materials are:

  1. Graphite

  2. Coal

  3. Raw or semi-finished metals such as aluminum and steel

  4. Software for integrating industrial processes
     
     Generally, the circumstances under which these materials are subject to sanctions are: Iran is using the materials for barter or listing them as assets; the materials are to be used in connection with Iran’s energy, shipping, and shipbuilding sectors, or a sector of the economy controlled by Iran’s Revolutionary Guard Corps; the materials are to be used in connection with Iran’s nuclear, military, or ballistic missile programs; or the materials are being sold, supplied, or transferred to an Iranian person on the SDN List.

• Underwriting, insurance, and reinsurance services. The president shall impose sanctions on any person who knowingly, on or after July 1, 2013, provides underwriting, insurance, and reinsurance services:

  1. For any activity subject to the Iran sanctions regime, including those newly imposed by the IFCPA

  2. To any person connected with Iran’s energy, shipping, and shipbuilding sectors; any person selling, supplying, or transferring the materials listed above (graphite, coal, raw or semi-finished metals, and certain software); or any person designated for sanctions in connection with Iran’s proliferation of weapons of mass destruction or Iran’s support for international terrorism, or

  3. To any Iranian person included on the SDN List

• Foreign financial institutions that facilitate financial transactions on behalf of specially designated nationals. The president shall prohibit opening, or impose strict conditions on maintaining, in the United States, a correspondent account or a payable-through account by a foreign financial institution that knowingly facilitates, on or after July 1, 2013, a significant financial transaction on behalf of any Iranian person on the SDN List.
  
  The sanctions generally apply to transactions related not only to the purchase of petroleum and petroleum products from Iran, but also to natural gas from Iran, subject to certain exceptions.

• Persons who divert goods intended for the Iranian people. The IFCPA amends the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 to impose sanctions on persons determined to have engaged in corruption or other activities relating to the diversion of goods (e.g., food, medicine, and agricultural commodities) intended for the people of Iran, or the misappropriation of proceeds from the sale or resale of such goods. 

The sanctions have a global impact and cover non-American entities. For example, India is already anticipating complications with the development of the Chabahar port in Iran, adding to what has been a historically difficult implementation of U.S. sanctions. That aside, questions will likely arise regarding the language of the legislation (what does "significant support" mean?) and the applicability of certain exceptions and waivers (what controls are sufficient to meet the "due diligence" exceptions?).

The IFCPA can be read in its entirety here at sections 1241 through 1255 of the NDAA.