Good Grief! Iran Sanctions and the Expansion of American Corporate Liability for Non-U.S. Subsidiary Violations Under the Iran Threat Reduction and Syria Human Rights Act of 2012

Alexandra L. Anderson | January 1, 2013

Following a watershed of suspected covert proliferation in Iran, legislators and scholars have searched for more effective ways to isolate Iran from the global energy market and financial systems. Prior sanctions played a crucial role in the international anti-proliferation architecture, but unilateral and non-comprehensive multilateral embargoes failed to achieve their desired deterrent effect. Now, with the Iran Threat Reduction and Syria Human Rights Act of 2012 (ITRA), the Obama Administration expands extraterritorial sanctions to hold U.S. parent corporations liable for the sanctionable activity of their foreign subsidiaries. While the ITRA marks a turning point in the sanctions game between the United States and Iran, the Act is unlikely to deter Iranian leaders from their nuclear program. This Note sets out key risks of the ITRA’s economic, enforcement, and diplomatic approach, and argues that the United States, if serious about talking Iran down from the nuclear cliff, must look beyond its unilateral measures and engage the international community in a realistic and timely way.