Sanctions – Iran – US withdrawal from the JCPOA
9 May 2018
As Members may already be aware, President Trump announced on Tuesday 8 May that the US would withdraw from the Joint Comprehensive Plan of Action (JCPOA) signed in Vienna in July 2015, that suspended certain sanctions against Iran from January 2016 (as outlined in our news alert of 18 January 2016, click here). The exact nature and extent of the new sanctions regime that President Trump intends to impose against Iran is as yet unclear as the details are still emerging. However, William Juska of New York law firm Freehill Hogan & Mahar LLP reports that there will be two different periods in which persons/businesses must wind down business activities connected to sanctioned trade: one for 90 days until 6 August 2018, and the other for 180 days until 4 November 2018.
The 90 day winding down period that expires on 6 August 2018 relates to:
- The purchase or acquisition of US dollar banknotes by the Government of Iran;
- Iran’s trade in gold or precious metals;
- The direct or indirect sale, supply, or transfer to or from Iran of graphite, raw, or semi-finished metals such as aluminium and steel, coal, and software for integrating industrial processes;
- Significant transactions related to the purchase or sale of Iranian rials, or the maintenance of significant funds or accounts outside the territory of Iran denominated in the Iranian rial;
- The purchase, subscription to, or facilitation of the issuance of Iranian sovereign debt; and
- Iran’s automotive sector.
The 180 day winding period that expires on 4 November relates to:
- Iran’s port operators, and shipping and shipbuilding sectors, including on the Islamic Republic of Iran Shipping Lines (IRISL), South Shipping Line Iran, or their affiliates;
- Petroleum-related transactions with, among others, the National Iranian Oil Company (NIOC), Naftiran Intertrade Company (NICO), and National Iranian Tanker Company (NITC), including the purchase of petroleum, petroleum products, or petrochemical products from Iran;
- Transactions by foreign financial institutions with the Central Bank of Iran and designated Iranian financial institutions under Section 1245 of the National Defense Authorization Act for Fiscal Year 2012 (NDAA);
- The provision of specialised financial messaging services to the Central Bank of Iran and Iranian financial institutions described in Section 104(c)(2)(E)(ii) of the Comprehensive Iran Sanctions and Divestment Act of 2010 (CISADA);
- The provision of underwriting services, insurance, or reinsurance; and
- Iran’s energy sector.
Mr Juska also reports that all US secondary sanctions will apparently be re-imposed. The importance of secondary sanctions is that these effectively have extra-territorial reach so that they will affect non-US persons and entities. The potential penalties for non-US persons breaching US secondary sanctions could include restriction from accessing the US financial system and capital markets; blocking of all property and interest in property that are in the US or under the control of a US person; and prohibition from importing goods, technology, or services into the US.
We will provide a further update once the full details emerge.
The News Alerts Team