Reed Smith Client Alerts

Last week, the U.S. House of Representatives and the Senate voted overwhelmingly to pass the Countering America’s Adversaries Through Sanctions Act (“CAATSA”). President Trump is expected to sign the bill. The legislation aims to expand existing sanctions on Iran, Russia and North Korea to “counter aggression” by those Governments. In one of the more controversial provisions, the legislation requires Congressional approval to terminate the Russian sanctions before the president can make changes.

I. Iran Sanctions

The bill’s Iran provisions are largely reflective of current law, and are likely to have little impact on those doing business with Iran. The bill continues to impose sanctions targeting Iran’s ballistic missile program, where the president can designate and target individuals who knowingly provide financial, material, technological or other support for the program. The president may designate any person knowingly engaging in an activity that supports Iran’s ballistic missile program and any other weapons of mass destruction program. These designations may include any person that is a successor entity, entities that own or control such persons, and entities that are owned or controlled by such persons. The provision also applies to any person that would form an entity to evade the sanctions, is acting for or on behalf of such person. This is not a significant change in the Iran sanctions, as the president already has executive authority to designate such individuals.