Alert
Alert
12.03.14
The temporary and limited changes to U.S. and European Union (“EU”) sanctions policy for Iran, as agreed under the interim nuclear deal reached by Iran and the P5 + 1 countries, have been extended until June 30, 2015. Most U.S. and EU sanctions on Iran remain in place and will continue to be enforced. Until June 30, 2015, non-U.S. individuals and companies (unless U.S. owned or controlled) will not face U.S. sanctions enforcement if they engage in specified transactions relating to: (a) the export of Iranian petrochemical products, (b) the provision of goods and services for Iran’s auto industry, (c) the sale of gold and precious metals to or from Iran, and (d) the provision of insurance and transport services associated with sales of Iranian oil to six specified countries. The U.S. government has continued the favorable licensing policy for the provision of goods and services to Iran’s civil aviation industry by U.S. persons, U.S. owned/controlled foreign entities and non-U.S. persons. The U.S. also is taking steps to facilitate certain humanitarian and medical trade with Iran, payment of UN dues and support for Iranians studying abroad.
The P5 + 1 (U.S., UK, France, China, Russia and Germany) reached an interim agreement (the “Joint Plan of Action,” or “JPOA”) with Iran on November 24, 2013 in connection with negotiations aimed at limiting Iran’s uranium enrichment and potential for nuclear weapons development. The sanctions changes addressed in the Joint Plan of Action are temporary and will be maintained only during negotiations and while Iran continues to meet its reciprocal obligations.
The interim agreement was scheduled to last for six months until July 20, 2014, with the possibility of renewal. On July 19, 2014, the parties agreed to extend the interim agreement until November 24, 2014 as they continued to negotiate toward a long term solution. The parties further extended the agreement on November 24, 2014, until June 30, 2015.
The U.S. government implemented the agreed changes via issuance of a written guidance document from the Treasury and State Departments (the “Guidance”), together with a separate statement of licensing policy for Iran’s civil aviation industry issued by the Office of Foreign Assets Control (“OFAC”). No executive order or OFAC general licenses were issued, and the changes have been made primarily in the form of forbearance by U.S. government in not imposing sanctions on non-U.S. persons. The Obama administration invoked its waiver authority under several statutes to allow these changes with no action required from Congress. The Guidance was updated for a second time on November 25, 2014 to reflect the most recent extension.
The U.S. sanctions changes are subject to three key limitations: (A) The Guidance applies only to transactions and activities that are initiated on or after January 20, 2014 and completed by June 30, 2015 (the “JPOA Period”), including receipt of payments. (B) Except as indicated, the changes do not apply to transactions with Specially Designated Nationals and blocked parties (“SDNs”) or to sanctions imposed under the U.S. counter-terrorism and counter-proliferation regimes. (C) Except for the aviation sector licensing policy, the Guidance generally applies only to non-U.S. companies that are not owned or controlled by U.S. persons (“Qualifying Foreign Companies”) and, further, companies with securities registered in the U.S. may be required to make SEC disclosures of the activities of their foreign affiliates relating to Iran pursuant to Section 219 of the Iran Threat Reduction & Syria Human Rights Act of 2012 (“TRA”).1
Download: U.S. and EU Extend Temporary Iran Sanctions Relief a Second Time