Reporting Requirements for Transactions with Iran Take Effect | Practical Law

Reporting Requirements for Transactions with Iran Take Effect | Practical Law

Effective February 6, 2013, all public companies must disclose to the SEC in their quarterly and annual reports whether they or their affiliates engaged in certain Iran-related activities during the period covered by the report. These disclosures are required under the Iran Threat Reduction and Syria Human Rights Act of 2012.

Reporting Requirements for Transactions with Iran Take Effect

Practical Law Legal Update 7-523-9922 (Approx. 4 pages)

Reporting Requirements for Transactions with Iran Take Effect

by PLC Commercial
Published on 05 Feb 2013 • USA (National/Federal)
Effective February 6, 2013, all public companies must disclose to the SEC in their quarterly and annual reports whether they or their affiliates engaged in certain Iran-related activities during the period covered by the report. These disclosures are required under the Iran Threat Reduction and Syria Human Rights Act of 2012.
Effective February 6, 2013, all public companies must include disclosures in their annual or quarterly reports to the Securities Exchange Commission (SEC) if they or their affiliates knowingly engaged in certain Iran-related activities during the period covered by the report. These disclosures are required under the Iran Threat Reduction and Syria Human Rights Act of 2012 (Iran Act).
Disclosure is required if a company or its affiliates knowingly conducted or engaged in:
  • Transactions or dealings with an entity or instrumentality acting on behalf of or representing the government of Iran.
  • Certain banking transactions that support Iran's weapons of mass destruction or terrorism activities, or both.
  • Transactions or dealings with a person or entity identified by the Treasury Department's Office of Foreign Assets Control as a Specially Designated National or blocked party.
  • Certain activities relating to Iran's energy sectors.
  • The provision of goods, services or technology to Iran that would contribute materially to its ability to acquire or develop chemical, biological or nuclear weapons.
"Knowingly" is defined in the Iran Act and means that regarding conduct, a circumstance or a result, the person had actual knowledge or should have known of the conduct, circumstance or the result.
"Affiliate" is defined in the Iran Act to included persons or entities that, directly or indirectly through one or more intermediaries, control, are controlled by or are under common control of the issuer. Affiliates include foreign companies that the issuer owns or controls or foreign companies under common control of the issuer. Affiliates have been commonly interpreted to also include directors and executive officers of the issuer.
Disclosure to the SEC must include a detailed description of each disclosed activity, including:
  • The nature and extent of the activity.
  • The gross revenues and net profits, if any, attributable to the activity.
  • Whether the issuer or the affiliate intends to continue the activity.
Companies that make these disclosures must concurrently file a notice with the SEC that the disclosure of the activity has been included in the annual or quarterly report.
This notice will trigger:
  • Delivery of the report to designated government officials.
  • Public release regarding the notice on the SEC website.
  • Investigation by the US government.
Companies should:
  • Determine whether disclosure is required as a result of their activities or those of their affiliates.
  • Ensure timely and comprehensive reporting.
For more information on the scope and mechanics of the disclosure requirements, see Legal Update, SEC Issues C&DIs on Disclosure Requirements under Iran Sanctions Bill.
For more information on recent Iranian sanctions, see: