18 Dec 2015
Update on Recent U.S. Steps to Ease Economic Sanctions Against Iran
The United States, the European Union and a handful of other countries recently took another step toward easing some of their economic sanctions against Iran under a July 2015 agreement that offers that change in return for limitations on Iran’s nuclear activities. 18 October 2015 marked “Adoption Day,” the day on which the Joint Comprehensive Plan of Action became effective and participants were required to begin making the necessary preparations for implementation of their JCPOA commitments.
All current trade restrictions against Iran are still in effect and will remain unchanged until “Implementation Day,” an as-yet-unspecified date when the International Atomic Energy Agency verifies that Iran has implemented key nuclear-related measures described in the JCPOA. In preparation for that date, the Obama administration has directed federal agencies to “take all appropriate preparatory measures” to ensure the U.S. promptly implements its commitments once Iran fulfils the requisite conditions.
In addition, the State Department has issued contingent waivers of certain statutory sanctions that will only take effect on Implementation Day and will allow non-U.S. persons (including those owned or controlled by a U.S. entity) to engage in the following activities. These waivers will not apply to U.S. persons, which will remain under a broad ban on engaging in transactions with Iran.
- certain financial and banking measures with certain Iranian banks and financial institutions, including the provision of loans, transfers, accounting, investments, securities, letters of credit, etc.
- provide underwriting, insurance or re-insurance consistent with the activities allowed under the JCPOA
- purchase, acquire, sell, transport or market petroleum, energy, and petroleum and petrochemical products, including natural gas
- own, operate, control or insure vessels used to transport such products, including port-related activities and services and shipping and shipbuilding services
- sell, supply or transfer, directly or indirectly, gold and other precious metals or provide services for the same
- sell, supply or transfer, directly or indirectly, graphite, raw or semi-finished metals such as aluminium and steel, coal and software for integrating industrial processes and providing such materials to the energy, petrochemical, shipping and shipbuilding sectors in Iran as well as services for the same
- conduct or facilitate financial or other transactions for the sale, supply or transfer to Iran of goods and services used in the automotive sector in Iran
Another contingent waiver will lift sanctions on a 29-page list of Iranian persons, entities, banks and vessels by removing them from the specially designated nationals and foreign sanctions evaders lists.
Until Implementation Day, the limited sanctions relief that has been in place since 24 November 2013 will remain in effect. These temporary measures allow Iran to export petrochemicals, oil, gold and precious metals as well as sales of automotive parts and services to Iran by non-U.S. persons without the imposition of correspondent or payable-through account sanctions on financial institutions and without the imposition of blocking sanctions on persons assisting in such sales, as long as the sales are made within the allotted time frames. In addition, U.S. persons may obtain licences from the Office of Foreign Assets Control for the sale of aircraft parts and services for the safety of Iran’s commercial passenger aircraft as long as these sales are completed within allotted time frames. Further, U.S. exports to Iran of food, medicine and medical supplies itemised in OFAC’s Medical Supply List continue to be permitted under a general licence without approval by OFAC (non-itemised medical supplies and devices still require a specific licence from OFAC).
Recent press reports indicate that U.S. and Russian officials believe Implementation Day could come as early as January 2016, although there have been no official announcements in that regard. OFAC notes, however, that even after Implementation Day the U.S. trade embargo against Iran will remain in place virtually unchanged. U.S. persons will continue to be broadly prohibited from engaging in transactions or dealings involving Iran, including the government of Iran, with the exception of a few specific categories of transactions that OFAC will licence pursuant to the JCPOA.