President Trump has extended a waiver of U.S. nuclear-related secondary sanctions against Iran but is warning that these sanctions could be reimposed in as little as 120 days if a related agreement is not revised. U.S.-based multinational companies should monitor this issue closely in the coming months.

Under the Joint Comprehensive Plan of Action, 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. In the U.S., the Office of Foreign Assets Control issued a general license allowing non-U.S. subsidiaries of U.S. parent companies to engage in specified activities with respect to Iran without a license. However, the U.S. trade embargo against Iran remains in place and U.S. persons and entities are still prohibited from virtually all dealings with Iranian entities.

While Trump continued the sanctions waiver this week, he reiterated his opposition to the JCPOA and said that in the absence of an agreement to “fix [its] terrible flaws” he “will not again waive sanctions in order to stay in the Iran nuclear deal.” He added that if “at any time” he feels a revised agreement is “not within reach” he will “withdraw from the deal immediately.” If that happens, foreign subsidiaries of U.S. companies could again face restrictions on their ability to trade with Iran.

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