Iran Sanctions Affecting Foreign Subsidiaries, Financial Transactions to be Reinstated
President Trump announced May 8 his decision to cease the United States’ participation in the Joint Comprehensive Plan of Action and to begin reimposing the U.S. nuclear-related primary and secondary sanctions against Iran that were lifted to effectuate the JCPOA sanctions relief. The Treasury Department’s Office of Foreign Assets Control states that persons engaging in activities undertaken under this relief should take the steps necessary to wind down those activities by Aug. 6 or Nov. 4, as applicable, to avoid exposure to sanctions or enforcement action.
Under the JCPOA, the U.S. and the European Union lifted economic and financial nuclear-related sanctions on Iran in January 2016 in exchange for Iran’s significant curtailment of its nuclear program. OFAC now states that, as soon as is administratively feasible, it expects to revoke or amend general and specific licenses issued in connection with the JCPOA. At that time, OFAC will issue new authorizations to allow previously authorized transactions and activities during the applicable wind-down periods, after which the sanctions will come back into full effect.
Sanctions to be reimposed after Aug. 6 include sanctions on the direct or indirect sale, supply, or transfer to or from Iran of graphite, raw, or semi-finished metals such as aluminum and steel, coal, and software for integrating industrial processes and sanctions on Iran’s automotive sector. Also after Aug. 6 the U.S. will revoke JCPOA-related authorizations for imports of Iranian-origin carpets and foodstuffs and certain related financial transactions as well as activities undertaken pursuant to specific licenses allowing exports of commercial passenger aircraft and related parts and services to Iran for exclusively civil aviation end-use (which will also be revoked).
Sanctions to be reimposed after Nov. 4 include sanctions on Iran’s port operators and shipping and shipbuilding sectors, sanctions on petroleum-related transactions with certain entities, and sanctions on the provision of underwriting services, insurance, or reinsurance. In addition, effective Nov. 5 the U.S. will revoke the authorization for U.S.-owned or -controlled foreign entities to wind down certain activities with the government of Iran or persons subject to the jurisdiction of the government of Iran that were previously authorized pursuant to General License H. Finally, no later than Nov. 5 the U.S. will reimpose the sanctions that applied to persons removed from the List of Specially Designated Nationals and Blocked Persons and/or other lists maintained by the U.S. government on Jan. 16, 2016.