What U.S. Companies Need To Know About The Withdrawal From The Iran Nuclear Deal And Renewed Sanctions

President Trump announced on May 8, 2018 that the United States is withdrawing from the Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA). As a result of the withdraw, the U.S. government will re-impose all U.S. sanctions against Iran that had been suspended as part of the JCPOA.

Pursuant to the JCPOA, which was signed under President Obama in 2015, Iran agreed to limit its nuclear program by curbing its enrichment of uranium, spent fuel processing, and research and development activities. In exchange, the U.S. lifted most “secondary sanctions” targeting non-U.S. persons and companies that transact business with Iran and allowed the importation of certain Iranian products into the U.S. In addition, the U.S. allowed non-U.S. entities that are owned or controlled by U.S. persons to engage in certain transactions with Iran under OFAC’s General License H. A number of foreign affiliates of U.S. companies started doing business and made investments in Iran pursuant to these authorizations.

The U.S. government will reinstate all sanctions against Iran that were lifted by the JCPOA, including General License H. The reinstatement will take place in two phases – 90 and 180 days after the May 8 withdrawal – to allow U.S. and non-U.S. businesses to wind down their existing business with Iran. The sanctions that will be re-imposed and the authorizations that will be revoked are listed below. All parties engaged in any of the activities listed below should take necessary steps to wind down these activities by the dates indicated to avoid sanctions and enforcement actions under U.S. law.

Effective November 5, 2018:

• The U.S. government 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.
  • OFAC expects to replace General License H with a more narrowly scoped authorization to engage in transactions necessary to wind down activities with Iran previously authorized under General License H.
• No later than November 5, 2018, the U.S. government will re-impose, as appropriate, the sanctions that applied to persons removed from the List of Specially Designated Nationals and Blocked Persons (SDN List) and/or other lists maintained by the U.S. government.

Sanctions Re-Imposed After 90 Days (August 6, 2018):

• Sanctions on the purchase or acquisition of U.S. dollar banknotes by the Government of Iran.
• Sanctions on Iran’s trade in gold or precious metals.
• 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.
• Sanctions on 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.
• Sanctions on the purchase, subscription to, or facilitation of the issuance of Iranian sovereign debt.
• Sanctions on Iran’s automotive sector.

Authorizations Revoked After 90 Days (August 6, 2018):

• Authorization to import into the United States Iranian-origin carpets and food and certain related financial transactions.
• Authorization for activities undertaken pursuant to specific licenses issued in connection with 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 (SLP).
• Authorization for activities undertaken pursuant to General License I relating to contingent contracts for activities eligible for authorization under the SLP. (OFAC rescinded the SLP and will no longer consider applications. OFAC expects to revoke any current specific licenses issued under the SLP, but will issue authorizations for related wind-down activities until August 6, 2018).

Sanctions Re-Imposed After 180 Days (November 4, 2018):

• Sanctions on 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.
• Sanctions on 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.
• Sanctions on 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).
• Sanctions on the provision of specialized 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).
• Sanctions on the provision of underwriting services, insurance, or reinsurance.
• Sanctions on Iran’s energy sector.

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