On January 16, 2016, the U.S. Office of Foreign Asset Control (OFAC) issued a notice stating that a number of economic sanctions imposed on Iran have been lifted in accordance with that country’s curtailment of nuclear activities under the Joint Comprehensive Plan of Action (JCPOA). The planned lifting of Iranian sanctions under the JCPOA is known as “Implementation Day.”
Implementation Day under the JCPOA begins the partial lifting of U.S. primary sanctions to non-U.S. individuals and is limited to certain economic sectors. For U.S. individuals, the sanctions remain in effect, except for three limited exceptions: (1) a case-by-case licensing policy for civil aviation exports and transfers by U.S.-individuals; (2) a general license for foreign entities controlled or owned by U.S. individuals; and (3) a general license for the importation of Iranian foodstuffs and carpets. Moreover, the continuation of the U.S. primary sanctions against Iran will continue to impact the ability of U.S. insurers and reinsurers to provide cover to Iranian entities and for claims by Iranian entities or involving Iran trade. U.S. secondary sanctions will also continue to apply to non-US individuals where they knowingly facilitate significant financial transactions with or provide material or certain other support to those Iranian or Iran-related persons that remain on the OFAC Specially Designated Nations (SDN) list. Implementation Day under the JCPOA also puts into action the general lifting of EU sanctions. However, in respect to certain economic sectors, which include amongst other areas maritime trade with Iran, the insurance of vessels engaged in such trade and the provision of insurance and reinsurance cover to Iranian vessels and entities, will continue to entail prior-authorization requirements.
Foreign individuals and companies should continue to exercise caution when dealing with Iran. While many activities are no longer sanctionable against non U.S. persons, activities that involve Iran still include an appreciable risk of U.S.-imposed sanctioned if any transaction involves individuals/entities on the SDN list, the Iranian Revolutionary Guard Corp., and U.S. financial institutions. Furthermore, foreign financial institutions may still face special measures as a result of a 2011 FinCEN finding that Iran is a popular location for money laundering. Therefore, it is still strongly advised to engage in due diligence protocols in respect to trade involving Iranian interests and to check the OFAC SDN list (available here).
A copy the January 16, 2016 OFAC notice related to the lifting of Iranian sections is available here . For more information on how the lifting of certain U.S. sanctions against Iran could affect you or your business, please do not hesitate to contact us at email@example.com.