IRAN SANCTIONS PROGRAM
Wind-down of JCPOA Related Activity and the Re-imposition of Sanctions
All of the sanctions in existence prior to the JCPOA including nuclear-related secondary sanctions will be in effect on November 5, 2018. Wind-down of Iran-related activities pursuant to authorizations provided by the JCPOA is required in the next 90 or 180 days depending on the nature of the transaction. Anyone engaging in any activities which are contrary to the current sanctions laws could be liable for such activities.
OFAC Amendments to ITSR
OFAC amended the Iranian Transactions and Sanctions Regulations ("ITSR") to implement the President's May 8th, 2018 decision to withdraw from the JCPOA, as outlined in the National Security Presidential Memorandum ("NSPM"):
- §560.534 – Winding down of transactions related to the importation into the United States of, and dealings in, certain foodstuffs and carpets.
- §560.535 – Winding down of transactions related to letters of credit and brokering services relating to certain foodstuffs and carpets.
- §560.536 – Winding down of transactions related to the negotiation of contingent contracts for activities eligible for authorization under the Statement of Licensing Policy for Activities Related to the Export or Re-export to Iran of Commercial Passenger Aircraft and Related Parts and Services.
- §560.537 – Winding down of transactions relating to foreign entities owned or controlled by a U.S. person.
Sanctions Reimposition
Upon conclusion of the 90-day wind-down period on August 6, 2018, the United States will reimpose several sanctions, including those on:
- The purchase or acquisition of U.S. dollars by the Government of Iran
- Iran's trade in gold and precious metals
- Graphite, raw, or semi-finished metals transactions
- Significant transactions related to the Iranian rial
- Iranian sovereign debt
- Iran's automotive sector
Additional sanctions will be reimposed after the 180-day wind-down period on November 4, 2018.
Iran Sanctions Regime
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) administers a complex and comprehensive sanctions regime against Iran. The Iran sanctions prohibit virtually all direct and indirect transactions involving Iran, the Government of Iran, persons who ordinarily reside in Iran, and entities either located in Iran or formed under Iranian law.
OFAC's Legal Authorities for Iran Sanctions
OFAC sanctions targeting Iran are authorized pursuant to many overlapping legal authorities, including:
- The International Emergency and Economic Powers Act
- The Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA)
- The Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA)
- The Iran Sanctions Act
- The Iran Freedom and Counter-Proliferation Act of 2012 (IFCA)
- The Iran Threat Reduction and Syria Human Rights Act of 2012
- The National Defense Authorization Act 2012 (NDAA 2012)
- The Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA)
OFAC Prohibited Activities
The sanctions broadly prohibit:
- Importation of Iranian goods or services
- Exportation, re-exportation, sale, or supply of goods, technology, or services to Iran
- Trade-related transactions with Iran
- Facilitation by U.S. persons of transactions between foreign persons and Iran
- Investment in Iran
The Iran Deal (JCPOA)
The Joint Comprehensive Plan of Action (JCPOA), also known as the Iran Deal, was an agreement reached between the P5+1 countries and Iran over its nuclear program. The United States withdrew from the Iran Deal in May 2018.
Sanctions Enforcement After Re-imposition
Following the wind-down periods, OFAC expects that all the U.S. nuclear-related sanctions that had been lifted under the JCPOA will be re-imposed and in full effect on November 4, 2018.
Wind-Down Period
The U.S. government has established 90-day and 180-day wind-down periods for activities involving Iran that were consistent with U.S. sanctions under the JCPOA. Persons are advised to use these periods to wind-down their activities with Iran that will become sanctionable at the conclusion of the relevant period.
New Business
New business pursuant to the JCPOA sanctions relief will not be authorized during the wind-down periods. OFAC will evaluate efforts and steps taken to wind down activities and will assess whether any new business was entered into involving Iran during the applicable wind-down period.
SDN Re-Listing
No later than November 5, 2018, OFAC expects to move persons identified as meeting the definition of the terms "Government of Iran" or "Iranian financial institution" from the List of Persons Blocked Solely Pursuant to E.O. 13599 to the SDN List.
