On June 17, the Trump administration formalized a memorandum of understanding (MOU) with Iran to end hostilities, open the Strait of Hormuz, and commit within 60 days to a final deal on broad sanctions relief and Iran’s nuclear program. The MOU also commits the US to immediate sanctions relief, and as a first, quite significant step, the US Treasury Department authorized purchases of Iranian oil without risk of sanctions, including the unprecedented move of allowing Iran to use the US financial system until August 21, 2026. Read our publication on OFAC General License X for additional information.
Whether the rest of the provisions in the MOU will come to fruition, not to mention a final deal, is an open question – although traffic through the strait has picked up in recent days, the first weeks following the signing were rocky with Iran and the US trading fire, and significant issues must still be negotiated to reach a final deal. Stakeholders should expect the political situation to remain fluid and for changes to the sanctions to come in fits and starts.
This alert outlines the key provisions of the deal, the challenges to implementation, and three scenarios projecting how the future of the MOU could unfold and their impacts on business.
