New Disclosure re Prohibited Transactions with Iran

News Brief

By Cydney Posner

On October, 9, the President signed an executive order authorizing the implementation of certain sanctions set forth in The Iran Threat Reduction and Syria Human Rights Act of 2012.  Among other things, that Act added subsection 13(r) to the Exchange Act.  Section 13(r) provides that periodic reports required to be filed with the SEC after February 6, 2013, must contain specified information if, during the period covered by the report, the issuer or any affiliate of the issuer knowingly engaged in certain activities proscribed by the Act with or related to Iran. These include, for example, knowingly making certain investments that would enhance the Iranian petroleum industry; knowingly providing goods, services or technology that contribute materially to the development by Iran of weapons of mass destruction; financing by financial institutions of the proliferation of weapons of mass destruction or terrorist organizations;  and knowingly conducting any transaction or dealing with any person whose property and interests have been blocked  by executive orders relating to the commission or threat to commit or support of terrorism, weapons of mass destruction proliferators and their supporters or certain persons identified with the Iranian government without the specific authorization of a Federal department or agency.  If there have been activities of that kind, the company must provide a detailed description of the nature and extent of the activity, the gross revenues and net profits attributable to the activity and whether the issuer or affiliate intends to continue the activity.  The issuer must also separately file with the SEC, concurrently with the report, a notice that the disclosure is included in the report.  The SEC must then make the notice public and transmit the notice to the President and Congress. 

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