An article from Lina Saigol and Kara Scannell in the Financial Times this morning (December 12, 2011) reports that the SEC’s Division of Corporate Finance has sent letters to at least a dozen companies instructing them to "disclose business activity in and with Syria, Iran and others deemed ‘state sponsors’ of terror by the State Department." The article is available on-line here (registration required).

The article states that letters have been sent to several companies in recent months "asking why [the companies] had not disclosed business dealings in Syria, Iran, Sudan and Cuba." According to the Financial Times, the inquiries from Corp Fin "are part of SEC reviews of companies’ investment risks to shareholders."

The article points out that Congress "is focusing on a loophole that allows some subsidiaries to operate in countries where sanctions are in place." As the Financial Times notes, under U.S. law, domestic companies may not operate in such countries, but "foreign subsidiaries can operate as long as they are run separately from their parent and do not employ U.S. citizens." The article goes on to quote California Congressman Howard Berman as expressing concerns the activities of foreign subsidiaries in such countries of U.S. companies "undermines" U.S. foreign policy efforts.

A second article by Ms. Saigol and Ms. Scannell in today’s Financial Times (here, registration required) focuses on the responses from some of the companies over the last few months and discusses what the responses reveal about "how companies can engage in trade that serves Syria and Iran, on benefit consumers inside the regimes, even as international sanctions remain in place."