On 16 January 2016, the International Atomic Energy Agency (IAEA) confirmed that Iran has complied with its obligations under the Joint Comprehensive Plan of Action (JCPOA) conditional to the first phase of sanctions relief. As a result, significant EU and US sanctions relief went into effect as of 16 January 2016. Certain nuclear-related sanctions remain in place, however, and the sanctions related to the Iranian human rights situation remain entirely unaffected and in full force.
US Sanctions Relief
Secondary Sanctions
US sanctions relief is largely limited to “secondary” sanctions. These sanctions, targeting non-US persons and entities that are not owned or controlled by US persons or entities engaging in the following Iranian sectors and deemed contrary to US interests, are now lifted: (1) financial and banking; (2) oil, gas and petrochemical; (3) shipping, shipbuilding and port operations; (4) automotive; (5) gold and precious metals; (6) graphite, raw or semi-finished metals, coal and software for integrating industrial processes; and (7) insurance for the foregoing activities.
Primary Sanctions
US persons, however, remain subject to very strict “primary” sanctions against Iran and are still prohibited from engaging in virtually any transactions involving Iran.
EU Sanctions
There has been almost a complete lifting of EU sanctions on banking, financial services, oil and gas products and services, petrochemical products and services, and shipping and shipbuilding.
Snap-Back Provisions
The EU, the US and the UN may re-impose all or certain sanctions if Iran does not comply with its commitments under the JCPOA. Such re-imposed sanctions, however, would not apply retroactively, and should therefore not affect any conduct taken place prior to any re-imposition.
U.S. implementation of its obligations under the JCPOA creates a complicated compliance environment for U.S. and non-U.S. companies, with many areas subject to interpretation. The lines between permissible and prohibited activities are fine ones. Companies and individuals considering a transaction related to Iran should evaluate all aspects of the transaction and consult with counsel.
Primary Source: Husch Blackwell Business Insights: Iran Sanctions Relief Brings Compliance Headaches. http://www.huschblackwell.com/businessinsights/iran-sanctions-relief-brings-compliance-headaches