Wynn Segall Discusses with Rigzone the Potential Impact on U.S., Non-U.S. Cos. of Lifting of Iran Sanctions
Akin Gump international trade partner Wynn Segall discussed the United States’ lifting of Iran nuclear-related sanctions, its potential impact on businesses and general licenses for foreign subsidiaries, among other topics, with Rigzone for its article “Iran's Crude May Be Just Another Drop in the Barrel.”
Regarding the lifting of sanctions, particularly European Union restrictions on the financial services sector, Segall noted that non-U.S. companies are more likely to make Iran their first venture, saying that, for European and other non-U.S. companies, Iran is essentially open for business. He added that the lifting of sanctions produced a landscape where non-U.S. companies have broad latitude to re-enter the Iranian energy market and acquire mature locally sourced oil and gas.
The article notes that, with regard to the general license for foreign subsidiaries of U.S. entities, the license allows those subsidiaries—though subject to a few important caveats—to participate in activities permitted under the laws of the operating country. Segall noted that U.S. sanctions only allow transactions by foreign subsidiaries as long as their counterparties are not still blacklisted or sanctioned by the United States.
Segall also commented on the practicality of U.S. companies pursuing Iranian business opportunities, including the practice of having their foreign subsidiaries act autonomously, saying, “When it comes to fundamental management and governance practices, are companies really going to be able to say to their foreign subs, ‘Go ahead and do what you like. We’ll look at your revenue, but we’re not going to want to actually participate in discussion or decision-making on fundamental business decisions you make about whether to pursue a particular contract, investment or joint venture.”
He added, “Ultimately this will be a critical business judgment, informed by consideration of related legal, reputational and investor relation risks, that executives in individual U.S. companies will have to make in order to determine whether or not the foreign subsidiary path to Iran is practical and meaningful for their organizations to pursue.”