On Tuesday, 14 July 2015, the E3/EU+3 (China, France, Germany, the Russian Federation, UK and US, with the High Representative of the European Union for Foreign Affairs and Security Policy) and the Islamic Republic of Iran agreed to a long-term Joint Comprehensive Plan of Action (JCPOA).
On Monday, 20 July 2015, the UN Security Council unanimously adopted Resolution 2231, endorsing the JCPOA and setting the stage for the JCPOA to ultimately come into effect. Meanwhile, in the US, the Congressional review period officially began.
While the JCPOA has the potential to significantly alter the sanctions imposed by the UN, EU and US against Iran, it is important to note two key characteristics of the JCPOA:
- The sanctions relief is not immediately effective. Instead, sanctions relief will be phased in over key dates.
- The JCPOA does not require the EU or US to lift all the sanctions it currently imposes against Iran. For the most part, the US primary sanctions will remain in place and US companies will generally continue to be unable to do business with or involving Iran. The bulk of the changes in US sanctions will affect those sanctions directed toward non-US persons (also known as secondary sanctions) and will mostly benefit Europeans. However, even companies in the EU must be aware that when the phased lifting of economic sanctions begins certain UN, EU and US sanctions will continue. In particular, the arms embargo, sanctions targeted at Iran’s nuclear and ballistic missile programmes, and those measures applied because of its human rights record and as a sponsor of terrorism will remain in place.
Businesses that are looking to take advantage of these commercial opportunities which are not subject to sanctions will still need to make sure that they are not violating the remaining EU and US sanctions, and should take extreme caution before proceeding.
Please see the attached client alert for explanations of the changes for the US and EU, as well as the implications and timing of these changes and next steps. Please contact a member of our team or email InternationalTradeCompliance@squirepb.com with any questions.