25.703
Prohibition on contracting with entities that engage in certain activities or transactions relating to Iran
FAR 25.703 prohibits contracting with entities involved in certain Iran-related activities, requiring strict due diligence and compliance to avoid violations of U.S. sanctions laws.
Overview
FAR 25.703 establishes a prohibition on contracting with entities that engage in certain activities or transactions relating to Iran, specifically those that violate the Iran Sanctions Act or export sensitive technology to Iran. The regulation defines relevant terms, outlines the statutory basis for the prohibition, and provides for limited waivers under specific circumstances. Contracting officers must ensure that prospective contractors are not listed as entities engaged in prohibited activities with Iran before awarding contracts. This section is part of the broader U.S. government effort to prevent the proliferation of sensitive technologies and to enforce sanctions against Iran.
Key Rules
- Definitions (25.703-1)
- Clarifies key terms such as "sensitive technology" and "Iran Sanctions Act" for consistent application.
- Iran Sanctions Act (25.703-2)
- Establishes the statutory authority for prohibiting contracts with entities engaged in certain activities with Iran.
- Prohibition on Contracting (25.703-3)
- Prohibits awarding contracts to entities that export sensitive technology to Iran or are otherwise subject to sanctions under the Act.
- Waiver (25.703-4)
- Allows for waivers in specific cases, subject to high-level approval and reporting requirements.
Responsibilities
- Contracting Officers: Must verify that contractors are not prohibited entities and comply with all due diligence requirements.
- Contractors: Must not engage in prohibited activities or transactions with Iran and must certify compliance when required.
- Agencies: Responsible for oversight, waiver processing, and reporting to higher authorities as needed.
Practical Implications
- This regulation exists to enforce U.S. foreign policy and national security interests regarding Iran.
- It impacts daily contracting by requiring additional due diligence and certifications, especially for international or technology-related contracts.
- Common pitfalls include failure to properly vet contractors or misunderstanding the scope of prohibited activities.