Royal Dutch Shell Discloses Possible Sanctions
In a prospectus filed on July 20, 2005 with the U.S. Securities and Exchange Commission, Royal Dutch Shell PLC said that the company's investments in Iran and Syria could result in the imposition of sanctions by the U.S. government. The following is the language included in the prospectus:
"The Group currently has investments in Iran and Syria. U.S. law currently imposes economic sanctions with the objective of denying certain countries, including Iran and Syria, the ability to support state-sponsored terrorism. In the case of both countries, there are prohibitions on certain activities and transactions and penalties for violation of these prohibitions include criminal and civil fines and imprisonment. In addition, in the case of Iran, U.S. legislation includes a limit of $20 million in any twelve-month period on certain investments knowingly made in that country and authorizes the imposition of sanctions (from a list that includes denial of financings by the U.S. export-import bank, denial of certain export licenses, denial of certain government contracts and limits on loans or credits from U.S. financial institutions). However, compliance with this investment limit by European companies is prohibited by Council Regulation No. 2271/96 adopted by the Council of the European Union, so that the statutes conflict with each other in certain respects. The Group has exceeded and expects to exceed in the future the U.S. imposed investment limits in Iran. While the Group seeks to comply with applicable legal requirements in its dealings in Iran and Syria, it is possible that the Group or persons employed by the Group could be found to be subject to sanctions or other penalties under this legislation in connection with their activities in Iran and Syria. Considering both the likelihood of the imposition of sanctions on the Group and the possible effects thereof, the Group does not believe that there will be a material negative effect on its results of operations or financial condition resulting from its investments and activities in Iran and Syria."
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