Following a week of escalating tensions, allegations that Iran attacked two oil tankers in the Gulf of Oman, Iran’s threat to increase its stockpile of enriched uranium, and its acknowledged downing of an unmanned U.S. drone, President Donald Trump responded on June 24, 2019 by issuing an executive order sanctioning the Supreme Leader of Iran, Sayyid Ali Hosseini Khamenei, and numerous other appointed Iranian state officials. Under the order, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) has been authorized to block the property and funds within the United States or within the control of any U.S. persons of (i) the Supreme Leader of the Islamic Republic of Iran and the Iranian Supreme Leader’s Office (SLO) or (ii) any person determined by the Secretary of the Treasury, in consultation with the Secretary of State, to be a person appointed by the Supreme Leader of Iran or the SLO to a position as a state official of Iran.

In a statement regarding the sanctions, the White House announced that the sanctions “will deny Iran’s leadership access to financial resources, blocking them from using the United States financial system or accessing any assets in the United States.” The sanctions extend to persons and entities that have materially assisted, sponsored or provided financial, material or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked under these sanctions, as well as any entities known to be to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property has been blocked. In remarks to the press, Trump stated that the “Supreme Leader of Iran is one who ultimately is responsible for the hostile conduct of the regime. He’s respected within his country. His office oversees the regime’s most brutal instruments, including the Islamic Revolutionary Guard Corps.” The president indicated that he felt these measures were a strong and proportionate response to Iran’s increasingly provocative actions, and that “the assets of Ayatollah Khamenei and his office will not be spared from the sanctions.”

OFAC has updated its Specially Designated Nationals (SDN) List to reflect the addition of Ayatollah Khamenei and eight senior commanders of the Navy, Aerospace and Ground Forces of the Islamic Revolutionary Guards Corps (IRGC). OFAC separately released a press statement providing additional background information on the eight Iranian officials subject to sanctions along with the Ayatollah.

As a result of this action, all property and interests in property of these persons that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. Because U.S. persons are generally prohibited from dealing with entities on the SDN List, persons who engage in certain transactions with these designated persons may themselves be exposed to designation. OFAC has indicated that any foreign financial institution that knowingly facilitates a significant financial transaction or provides significant financial services for these persons could be subject to U.S. correspondent account sanctions or payable-through account sanctions.