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US revokes JCPOA-related licences, amends Iranian sanctions and updates its Iran FAQs

US revokes JCPOA-related licences, amends Iranian sanctions and updates its Iran FAQs

  • Global
  • Financial services disputes and investigations

27-06-2018

Following President Trump’s announcement on 8 May 2018 that the US would be withdrawing from the Iran nuclear deal and begin re-imposing sanctions which were previously lifted (see briefing here), OFAC[1] announced today that it has amended (or in some cases, revoked and replaced) certain General Licences relating to Iran.  The effect of this is that activities previously permitted under the General Licences are now only permitted to the extent that those activities are being wound down in advance of the deadlines for ceasing those activities (the deadlines being 6 August and 4 November 2018).  OFAC has also updated its FAQs relating to the re-imposition of the sanctions.

What has been revoked?

General Licences H and I have been revoked.  General Licence H had previously authorised certain transactions in respect of Iran which were conducted by foreign entities owned or controlled by a US person, thereby enabling many EU and other non-US companies to do business with Iran in accordance with the terms of the JCPOA.  General Licence I had previously authorised US persons from engaging in certain transactions which related to the negotiation of, and entry into, certain contracts relating to the export and re-export of commercial passenger aircraft and related parts and services to Iran. 

However, in order to give affected persons time to comply with the amended sanctions (and in line with President Trump’s announcement of 8 May), OFAC has also issued new General Licences[2] authorising the wind-down by 6 August and 4 November 2018 (respectively) of activities previously authorised by General Licences H and I.

What other amendments has OFAC announced?

In parallel to the revocation of General Licences H and I (and the issuance of new related “wind down licences”), OFAC has also amended US sanctions legislation to narrow the General Licences[3] authorising the importation of Iranian origin carpets and foodstuffs to the US, as well as related letters of credit and brokering services – with the effect that activities which were previously authorised under those General Licences now need to be wound down by 6 August 2018.

Finally, OFAC has amended FAQs 4.3, 4.4 and 4.5 in respect of the re-imposition of sanctions against Iran to cover the changes referred to above. 

What does this mean?

To the extent that they are not already doing so, both US and non-US companies need to review their existing business with Iran and take steps to determine what action should be taken to ensure they do not fall foul of US sanctions.  Where activities need to be wound down, consideration should be given to what this entails and how long this will take, noting the limited periods for wind-down which the US has implemented.

However, we note that the position for companies in the EU is complicated by the fact that on 6 June 2018 the European Commission issued a proposal seeking to reactivate the so-called Blocking Regulation in respect of US sanctions against Iran[4] in a bid to protect EU companies from the extra-territorial effects of US sanctions on Iran (please see our briefing on the Blocking Regulation here). It remains to be seen how the Blocking Regulation will be implemented and enforced, and therefore what steps companies in the EU need to take to comply with the relevant laws.


[1] The US Department of the Treasury’s Office of Foreign Assets Control

[2] 31 C.F.R § 560.537 and 31 C.F.R § 560.536

[3] 31 C.F.R § 560.534 and 560.535

[4] Council Regulation (EC) No 2271/96

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