22 U.S.C. § 8725: Liability of parent…

Summary

Within 60 days after August 10, 2012, the President must stop companies set up or run outside the United States that are owned or controlled by a U.S. person from knowingly doing any transaction with the Government of Iran or people under Iran’s authority if that deal would be illegal for a U.S. person or inside the U.S. under the International Emergency Economic Powers Act. Entity means a partnership, corporation, trust, joint venture, or similar group. "Own or control" means holding more than 50% of the equity, having most board seats, or otherwise controlling actions, policies, or staff. If such a foreign entity breaks, tries to break, plans to break, or causes a breach of those rules, the U.S. person can be hit with the same civil fines that apply under section 206(b) of the International Emergency Economic Powers Act (50 U.S.C. 1705(b)). Those fines do not apply if the U.S. person divests or ends its business with the entity on or before the date that is 180 days after August 10, 2012.

Title 22, §8725

Foreign Relations and Intercourse, Source: USLM XML via OLRC

(a)Definitions

In this section: (1) Entity

(2)Own or control

The term “own or control” means, with respect to an entity—

(A)to hold more than 50 percent of the equity interest by vote or value in the entity;

(B)to hold a majority of seats on the board of directors of the entity; or

(C)to otherwise control the actions, policies, or personnel decisions of the entity.

(b)Prohibition

Not later than 60 days after August 10, 2012, the President shall prohibit an entity owned or controlled by a United States person and established or maintained outside the United States from knowingly engaging in any transaction directly or indirectly with the Government of Iran or any person subject to the jurisdiction of the Government of Iran that would be prohibited by an order or regulation issued pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) if the transaction were engaged in by a United States person or in the United States.

(c)Civil penalty

The civil penalties provided for in section 206(b) of the International Emergency Economic Powers Act (50 U.S.C. 1705(b)) shall apply to a United States person to the same extent that such penalties apply to a person that commits an unlawful act described in section 206(a) of that Act if an entity owned or controlled by the United States person and established or maintained outside the United States violates, attempts to violate, conspires to violate, or causes a violation of any order or regulation issued to implement subsection (b).

(d)Applicability

Subsection (c) shall not apply with respect to a transaction described in subsection (b) by an entity owned or controlled by a United States person and established or maintained outside the United States if the United States person divests or terminates its business with the entity not later than the date that is 180 days after August 10, 2012.

Notes & Related Subsidiaries

Termination of SectionFor termination of section, see section 8785(a) of this title.

Editorial Notes

References in Text

The International Emergency Economic Powers Act, referred to in subsec. (b), is title II of Pub. L. 95–223, Dec. 28, 1977, 91 Stat. 1626, which is classified generally to chapter 35 (§ 1701 et seq.) of Title 50, War and National Defense. For complete classification of this Act to the Code, see

Short Title

note set out under section 1701 of Title 50 and Tables.

§8725 Liability of Parent Companies for Violations of Sanctions by Foreign Subsidiaries