As the world debated WikiLeaks' late-November 2010 deluge of diplomatic cables, at least one recurring theme emerged from many of the documents: A large chunk of the world is increasingly concerned about Iran and its nuclear development. The revelation shouldn't surprise Americans, who routinely hear politicians debate the best way to deal with the country. American corporations are prohibited from doing business there, and the U.S. first passed a law aimed at sanctioning foreign companies that work with Iran's petrochemical industry in 1996.
However, as WikiLeaks shows, the stakes keep increasing. In July, President Obama signed the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA). The law expands the list of activities that can get foreign companies sanctioned. Additionally, CISADA makes it harder for the government to avoid enforcing the law if a business is found to violate it.
Us and Them
CISADA amends the original Iran Sanctions Act. It expands the definition of restricted investments to include the sale of any goods, services or technology related to Iran's petroleum and natural resource development.
Change Your Ways
In-house counsel should know that the U.S. government does not want to sever ties with foreign businesses, Waltz says.
In order to comply with CISADA and pre-existing contracts, in-house counsel need to think about several layers of liability.