President Obama Signs New U.S. Sanctions Targeting Foreign Banks Dealing with Iran

On December 31, 2011, the President signed the National Defense Authorization Act for Fiscal Year 2012 (the “Act”) into law. The Act includes a provision expanding CISADA’s threat of sanctions against foreign banks dealing with the Iranian financial sector by providing for a prohibition on U.S. correspondent relationships with any financial institution found to have “knowingly conducted or facilitated any significant financial transaction with the Central Bank of Iran.” While the sanctions are not automatic, and are subject to certain exceptions and waivers, foreign financial institutions that have financial dealings with Iran face an increased risk of loss of access to the U.S. financial system.

The memorandum includes more detail on these sanctions.