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Iran Sanctions Affecting Foreign Subsidiaries, Financial Transactions to be Reinstated

President Trump announced on 8 May his decision to cease the United States’ participation in the Joint Comprehensive Plan of Action and to begin re-imposing the U.S. nuclear-related primary and secondary sanctions against Iran that were lifted to effectuate the JCPOA sanctions relief. The Treasury Department’s Office of Foreign Assets Control states that persons engaging in activities undertaken under this relief should take the steps necessary to wind down those activities by 6 August or 4 November, as applicable, to avoid exposure to sanctions or enforcement action.

Under the JCPOA, the U.S. and the European Union lifted economic and financial nuclear-related sanctions on Iran in January 2016 in exchange for Iran’s significant curtailment of its nuclear programme. OFAC now states that, as soon as is administratively feasible, it expects to revoke or amend general and specific licences issued in connection with the JCPOA. At that time, OFAC will issue new authorisations to allow previously authorised transactions and activities during the applicable wind-down periods, after which the sanctions will come back into full effect.

Sanctions to be re-imposed after 6 August include sanctions on the direct or indirect sale, supply or transfer to or from Iran of graphite, raw or semi-finished metals such as aluminium and steel, coal and software for integrating industrial processes and sanctions on Iran’s automotive sector. Also after 6 August the United States will revoke JCPOA-related authorisations for imports of Iranian-origin carpets and foodstuffs and certain related financial transactions as well as activities undertaken pursuant to specific licences allowing exports of commercial passenger aircraft and related parts and services to Iran for exclusively civil aviation end-use (which will also be revoked).

Sanctions to be re-imposed after 4 November include sanctions on Iran’s port operators and shipping and shipbuilding sectors, sanctions on petroleum-related transactions with certain entities, and sanctions on the provision of underwriting services, insurance or reinsurance. In addition, effective 5 November the United States will revoke the authorisation for U.S.-owned or -controlled foreign entities to wind down certain activities with the government of Iran or persons subject to the jurisdiction of the government of Iran that were previously authorised pursuant to General License H. Finally, no later than 5 November the United States will reimpose the sanctions that applied to persons removed from the List of Specially Designated Nationals and Blocked Persons and/or other lists maintained by the U.S. government on 16 January 2016.

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