Headlines this week brought news of a potential agreement to limit Iran’s nuclear activities in exchange for the removal of economic sanctions. While this agreement could be historic, it has not yet been finalized, so U.S. exports to Iran of any product other than those few already allowed will have to wait.
The Joint Comprehensive Plan of Action negotiated between the P5+1 countries (the United States, the United Kingdom, France, China, Russia and Germany) and Iran must now be submitted to the U.S. Congress, which will then have 60 days to approve it. Lawmakers opposing the JCPOA will have the opportunity to raise their concerns, but President Obama has stated that he will veto any proposal that may stifle its implementation.
Even if the JCPOA is approved, the lifting of U.S. sanctions against Iran will not be immediate. Instead, the Office of Foreign Assets Control has said that sanctions relief will be only be provided once the International Atomic Energy Agency verifies that Iran has implemented key nuclear-related measures described in the JCPOA.
Until that time, the limited sanctions relief that has been in place since Nov. 24, 2013, will remain in effect. These temporary measures allow Iran to export petrochemicals, oil, gold and precious metals as well as sales of automotive parts and services to Iran by non-U.S. persons without the imposition of correspondent or payable-through account sanctions on financial institutions and without the imposition of blocking sanctions on persons assisting in such sales, as long as the sales are made within the allotted time frames. In addition, U.S. persons may obtain licenses from OFAC for the sale of aircraft parts and services for the safety of Iran’s commercial passenger aircraft as long as these sales are completed within allotted time frames.
In addition, U.S. exports to Iran of food, medicine and medical supplies itemized in OFAC’s Medical Supply List have been permitted under a general license without approval by OFAC for several years. Non-itemized medical supplies and devices still require a specific license from OFAC.
If you have questions about the effect these developments, contact Donna Bade or Erin Clark.