Chapter 1 of the Laws of 2012, which amends State Finance Law by adding a new Section 165-A, and Chapter 106 of the Laws of 2012, which amends the Public Authorities Law by adding a new Section 2879-c, are collectively known as the Iran Divestment Act of 2012 (Act). The Act imposes limitations on vendors that do business with the Iranian energy sector and seek contracts with New York State agencies, the State University of New York, the City University of New York, and New York public authorities and local governments. The Act prohibits, with certain exemptions, state contracts and, in some instances, subcontracts with “persons” engaged in investment activities in the energy sector of Iran.

For commodities, services, construction and printing contracts, the Act requires that bids or offers for and renewals or assignments of contracts include certification by the contractor with respect to investment activities in Iran.

According to the Act, a person engages in investment activities in Iran if the person provides goods or services of twenty million dollars ($20,000,000) or more in the energy sector of Iran or is a financial institution that extends twenty million dollars ($20,000,000) or more in credit for a minimum of 45 days to a person for purposes of providing goods or services in the energy sector of Iran.

The Act defines a “person” as a natural person, corporation, company, limited liability company, business association, partnership, society, trust, or any other nongovernmental entity or instrumentality of a government, including a multilateral development institution (as defined in the International Financial Institutions Act). The definition of person extends to entities with a legal relationship to the person such as subsidiary, subunit, or parent.

OFFICE OF GENERAL SERVICES’ (OGS) LIST

The Act requires that the Office of General Services develop a list of persons who engage in investment activities in Iran and update it every 180 days.

The list is available on the OGS website at http://www.ogs.ny.gov/about/regs/docs/ListofEntities.pdf

STATE CONTRACTING ENTITY RESPONSIBILITY

To comply with the Act, State agencies, the State University of New York, the City University of New York, and public authorities must require that each person who proposes to enter into, renew, or assume responsibility for a procurement contract for commodities, services, construction, or printing certify at the time the bid is submitted or the contract is renewed or assigned that it is not on the OGS list.

No person on the OGS list shall be utilized as a subcontractor on any contract with a State agency, including SUNY and CUNY.

EXEMPTIONS

A State contracting entity may enter into a contract with a person on the list on a case-by-case basis where either:

• The investment activities in Iran were made before the effective date of this section;
• The investment activities have not been expanded or renewed after the effective date of this section; and
• The person has adopted, publicized, and is implementing a formal plan to cease the investment activities in Iran and to refrain from engaging in any investment activities in Iran;
  OR
• The state contracting entity makes a determination that the goods or services are necessary and cannot be obtained without an exemption.

OSC REQUIREMENTS

Effective with publication of the initial list by OGS, OSC’s Bureau of Contracts’ audit of transactions submitted for the State Comptroller’s approval will include a review to ensure that contractors and identified subcontractors, as applicable, are not included on the list.

Certification and exemption determinations, as applicable, must be included in the procurement record and submitted to OSC for review with contract transactions requiring OSC filing or approval.

Guide to Financial Operations

REV. 10/25/2012