President Donald Trump has announced further action against Iran by imposing sanctions on its iron, steel, aluminum and copper sectors, the country’s largest non-petroleum-related sources of export revenue. In an executive order, the president implemented blocking sanctions on any person determined by the secretary of the Treasury, in consultation with the secretary of State, to be operating in these industry sectors of Iran, or to be a person that owns, controls or operates an entity that is a part of these sectors. The sanctions will apply to persons and entities knowingly engaging in a significant transaction for the sale, supply or transfer to Iran of significant goods or services used in connection with the iron, steel, aluminum or copper sectors of Iran, or knowingly engaging in a significant transaction for the purchase, acquisition, sale, transport or marketing of iron, iron products, aluminum, aluminum products, steel, steel products, copper or copper products from Iran. These terms are not defined in the executive order, and the Department of the Treasury’s Office of Foreign Assets Control has not defined them in a list of FAQs concerning these new sanctions.
Persons currently engaged in transactions involving these industry sectors of Iran will have 90 days from May 8, 2019, to wind down all operations and transactions without being subject to these sanctions. The executive order also authorizes sanctions on correspondent and payable-through accounts on foreign financial institutions, which further tightens secondary sanctions on non-U.S. persons and their ability to conduct business in Iran without exposure to U.S. jurisdiction.
With this action, the Trump administration has now imposed (or re-imposed) sanctions on Iran’s top three exports – oil, petrochemicals and metals. In a brief statement, Trump said that this “action targets Iran’s revenue from the export of industrial metals—10 percent of its export economy—and puts other nations on notice that allowing Iranian steel and other metals into your ports will no longer be tolerated.” He added that “Tehran can expect further actions unless it fundamentally alters its conduct.”