With complex US sanctions increasingly at the forefront of cross-border trade transactions, GTR speaks to Ross Denton, principal at law firm Baker & McKenzie, about instances when US primary sanctions apply to non-US persons.
Denton explains that US persons are usually US citizens, green card holders, US-registered companies, as well as anyone physically in the US when conducting a transaction. However, non-US persons, such as EU-registered companies with no US parent, still need to be weary of sanctions applying to US persons if they have US persons in their organisation.
In particular, when changing company policies to allow for transactions with previously sanctioned countries or entities, it is important that no US person is involved in the process, or they can be accused of “facilitating” transactions that remain illegal for them to conduct. In this instance, the non-US person could also be fined for “causing” a US person to get involved in illegal transactions.
The distinction between US and non-US persons, as well as the loopholes of these definitions, are particularly important to understand in the context of Iran’s sanctions lifting, as the US has removed its secondary sanctions (applying to non-US persons), but very much maintained its tough stance on US persons dealing with the country, by upholding its primary sanctions regime.