How does the United States government sanction foreign companies for doing business with Iran after President Donald Trump imposed sanctions? I.e. if my company (not in the US) does business with Iran, how will the sanctions affect my company? Not at all because we're not in the US? Or is there an impact on companies in countries that do not themselves support sanctions? Does it matter whether or not we do business with the US?
- The US can directly control what their citizens, residents, or companies are doing. The example would be do not import cigars bought from Cuban companies into the US.
- To make the sanctions meaningful, they would have to apply when the goods are traded through third party wholesalers. The example would be do not import cigars made in Cuba into the US, no matter where you bought them.
Those two are pretty straightforward. As an EU citizen, you could travel to Cuba and buy cigars there, or buy them from some import/export company, as long as you don't ever bring them to the US.
- The US can indirectly control what other countries' citizens do by putting them on a sanctions list. The example would be do not import cigars made in Cuba into your homeland, or you will not be allowed to visit the US any more. The problem with that is enforcement, of course. If you go to a shop and buy a single Cuban cigar for cash, the US might never know. If you order them in large quantity, it might be noticed by US intelligence agencies. Your gamble.
- If the US wants to go to even more effort, it could sanction people and companies who deal with people and companies on a sanctions list. The example would be do not buy anything from a company which trades in Cuban cigars, or from a company which trades with a company which trades in Cuban cigars, and so on, or you will not be allowed to trade with the US any more.
These secondary sanctions are difficult to enforce, but if the US really wants to go to the trouble, they can be devastating. The cigar shop selling Cuban cigars in Europe might see their bank accounts closed by the bank because otherwise the bank could no longer trade in the US. They might find it impossible to buy new furniture because otherwise the bank accounts of the furniture marker would be closed by the bank because otherwise the bank could no longer trade in the US.
Basically the US would say if you're not with me, you're against me.
Of course there may be some serious pushback from Europe if the US meddles in their ability to trade with Cuba that way. In the end, Europe would have to decide if they want a full break of economic relations with the US, a full break of economic relations with Cuba, or if they can find some compromise which limits those secondary sanctions.