Just before Thanksgiving, the Office of Foreign Asset Controls (“OFAC”) designated a Swiss corporation and a U.K. corporation as entities controlled by the Government of Iran. The two companies involved were Naftiran Intertrade Co. (NICO) SARL, located in Pully, Switzerland, and Naftiran Intertrade Company Ltd., located in Jersey, Channel Islands. Both are subsidiaries of Naftiran Intertrade Company, which in turn is a subsidiary of the National Iranian Oil Company, an agency of Iran’s Ministry of Petroleum.

Of course, the Iranian Transaction Regulations prohibit transactions with any entity owned by the Government of Iran, wherever located and whether or not the entity has been specifically identified by OFAC as owned by the Government of Iran. A non-exhaustive list of such entities is contained in Appendix A to the Iranian Transaction Regulations which, prior to these two latest additions, contained only financial institutions. The appendix is described by OFAC as a “tool to assist … in complying” with the regulations. Thus, the addition of the Naftiran subsidiaries to that appendix does not have any substantive effect.

Because Appendix A is not exhaustive, it’s not in fact a particularly useful compliance tool. Failing to find a company on the list doesn’t mean that it isn’t owned by the Iranian Government. Nor does the addition of these two companies to the appendix provide any information that is otherwise difficult to obtain. The first result of a Google search on the term “Naftiran” is a website that readily shows the connection of Naftiran Intertrade to the Government of Iran.

Instead one has to suspect that this latest order is simply a part of the ongoing public relations campaign of the U.S. government against Iran. The designation — and this post — should serve as a reminder, however, that Google is an exporter’s best friend. No exporter should ever deal with a foreign company otherwise unknown to it without conducting due diligence on the Company. Part of that due diligence is a Google (or other Internet) search which would have, in the case of Naftiran, revealed the Iranian connection, even without OFAC’s latest order.

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Copyright © 2008 Clif Burns. All Rights Reserved.
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