by Richard G. Johnson, Jr.
A U.S. based non-profit client of the Firm spent a significant dollar amount to purchase a building in Iran through an affiliated legal entity that was incorporated in that country before the revolution. After the revolution, trespassers occupied the building and still have possession of it. Due to the revolution and the U.S. boycott of Iran, some interesting issues have arisen in this matter.
In order to obtain Iranian professional services, the firm first had to secure a license from the Office of Foreign Asset Control (“OFAC”). Prior to receiving the license, we were prohibited even from obtaining gratuitous legal services from attorneys or advice from accountants in Iran. Once we secured the license, we were able to work with the CPA firm that the client had retained years before to file annual corporate reports for the affiliated entity, so that the Iranian authorities would not dissolve it. We were also able to retain an attorney to advise us on the legal procedures to recover possession of the building. The OFAC license only allows us to obtain professional services in Iran and file reports and pay taxes on behalf of the Iranian entity affiliated with our client. If we decide to file an action or otherwise try to recover possession of the building, we will need an additional license from the OFAC.
We have identified competent legal counsel in Iran and started to work on recovering possession of the building. We have learned through our negotiations with the government agency in control of the building that we are subject to regulations that the government agency does not make available to the public. Needless to say, it has been difficult to negotiate when we don’t know the applicable rules. Our local legal counsel advises that we can win the case in court because our client is the lawful owner of the building. However, the matter is on hold for the time being because diplomatic relations between Iran and the U.S. are not good at the present time.
If you would like more information on issues affecting Iran or other nations with U.S. boycotts, contact rjohnson@kmclaw.com or at 801.328.3600.