Iran Sanctions

July 15, 2015

On July 14, 2015, China, France, Germany, the Russian Federation, the United Kingdom and the United States, with the High Representative of the European Union for Foreign Affairs and Security Policy), and the Islamic Republic of Iran reached an historic Joint Comprehensive Plan of Action (“JCPOA”) on Iran’s nuclear program.  Iran has made certain commitments regarding its nuclear program and the United Nations Security Council, the United States and the European Union will provide Iran with sanctions relief. 
As described by the Treasury Department, U.S. sanctions relief will be provided through the suspension and eventual termination of nuclear-related secondary sanctions (which provide disincentives in the form of potential targeting for sanctions of non-U.S. persons engaging in certain Iran-related activities), beginning once the International Atomic Energy Agency (“IAEA”) verifies that Iran has implemented key nuclear-related measures described in the JCPOA (“Implementation Day”).  An Annex to the JCPOA contains a full and complete listing of all such U.S. “nuclear-related” sanctions that are subject to relief under the JCPOA, and a listing of parties that the United States committed to remove from sanctions lists maintained by the United States.  Other U.S. sanctions regarding Iran, including the Iranian Transactions and Sanctions Regulations (“ITSR”), administered by the Treasury Department’s Office of Foreign Assets Control will remain in place.  However, the JCPOA includes certain commitments to provide licenses that would permit activities that are currently prohibited under the ITSR, including a license to allow non-U.S. entities that are owned or controlled by a U.S. person to engage in activities with Iran that are consistent with the JCPOA, and to permit importation into the United States of Iranian-origin carpets and foodstuffs.  U.S. statutory sanctions focused on Iran’s support for terrorism, human rights abuses and missile activities also will remain in effect and continue to be enforced.  The U.S. government has promised detailed guidance related to the JCPOA prior to Implementation Day.  The sanctions relief initially provided by the U.S. government on November 24, 2013, under the Joint Plan of Action (“JPOA”), was extended through Implementation Day.  The U.S. government also has committed to issuing revised guidance on the continued JPOA relief.
Once formally presented with the JCPOA, Congress will have 60 days to review the agreement under the Iran Nuclear Review Act of 2015, H.R. 1191 (the "Act").  The president has promised to veto any bill from Congress threatening the implementation of the JCPOA.
The EU has similarly committed, beginning on Implementation Day, to terminate all provisions of the EU Regulation, as subsequently amended, implementing all nuclear-related economic and financial sanctions, including related designations, as specified in an Annex to the JCPOA.
In addition, a UN Security Council resolution endorsing the JCPOA will terminate all the provisions of the previous UN Security Council resolutions on the Iranian nuclear issue simultaneously with the Implementation Day, and will establish specific restrictions, as specified in an Annex to the JCPOA.

Sullivan & Cromwell LLP will publish a memorandum to clients with additional details about the sanctions relief contemplated by the JCPOA as all of the details are made publicly available.