THE IRAN NUCLEAR DEAL: SANCTIONS RELIEF BRINGS COMPLIANCE CHALLENGES
The implementation of the Iran nuclear deal early in 2016 will bring new risks and compliance challenges, both for businesses that are able to take advantage of new opportunities in Iran and those that are not. Indeed, significant differences between the US and EU commitments and the intentions of countries not party to the deal will create a complex business environment for global companies.
Based upon the pace of Iran’s compliance with its commitments under the Joint Comprehensive Plan of Action (JCPOA), Implementation Day is estimated to occur early in 2016. Implementation Day is not specified in the JCPOA but rather is defined as the day on which the International Atomic Energy Agency (IAEA) verifies implementation by Iran of its nuclear related commitments and sanctions relief begins.
Virtually all UN and EU sanctions will be lifted, save for those EU sanctions targeting human rights abuses in Iran. However, while almost all US ‘secondary’ sanctions (which principally target activities of non-US persons) will be removed, the ‘primary’ sanctions (which prohibit most trade and transactions with Iran by US persons) will remain in place. The only sanctions relief for US persons will come in the form of general and specific licences issued by the US Office of Foreign Assets Control (OFAC) allowing trade in food, carpets and commercial passenger aircraft and related parts and services. Furthermore, most countries with autonomous Iranian sanctions regimes, in addition to UN mandated sanctions, have signalled an intention to follow the EU approach. Thus, Implementation Day will bring a return to the pre-CISADA era of unilateral US sanctions against Iran.
Jan-Mar 2016 Issue
Miller & Chevalier Chartered