Iranian Sanctions Relief Has Little Direct Impact for U.S. Companies
International Trade & Customs Update
Date: January 27, 2014
As has been widely reported, the “P5+1” countries (the United States, United Kingdom, Germany, France, Russia and China) have agreed on a Joint Plan of Action (JPOA) with Iran in an effort to stop the advance of Iran’s nuclear program and roll back certain aspects of the program. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), together with the U.S. Department of State, has issued key documents to commence implementation of the United States’ commitments under the JPOA. The documents state that the United States has for a period of six months suspended certain sanctions involving:
- Iran’s purchase and sale of gold and other precious metals
- Iran’s export of petrochemical products
- Iran’s export of crude oil
- Iran’s automotive industry
- Certain “associated services” concerning each of the foregoing transactions
The suspension period runs from January 20 through July 20, 2014. Despite the suspension, and subject to a very small number of exceptions, transactions are still not permitted to involve persons or entities on OFAC’s Specially Designated Nationals and Blocked Persons List (the SDN List).
U.S. Sanctions Otherwise Remain in Effect
The relief afforded under the suspension is limited, temporary and reversible. The suspension applies only to non-U.S. persons not otherwise subject to the Iranian Transactions and Sanctions Regulations (31 C.F.R. Part 560). Consequently, non-U.S. companies, such as foreign financial institutions and insurers, which were affected by recently adopted sanctions extending beyond U.S. borders, now may see temporary opportunities in the industries noted above. All other U.S. sanctions concerning Iran remain in effect. As OFAC states in its documents, U.S. persons and U.S.-owned or -controlled foreign entities remain generally prohibited from entering into transactions with Iran unless authorized by OFAC, including transactions permitted by the JPOA.
The P5+1 and Iran are also establishing mechanisms to further facilitate the purchase of, payment for and export of humanitarian goods to Iran, including, food, agricultural commodities, medicine and medical devices.
Transactions Related to Civil Aviation
Also in furtherance of the United States’ commitments under the JPOA, OFAC released a statement establishing a favorable licensing policy regime under which U.S. persons, U.S.-owned or -controlled foreign entities, and non-U.S. persons involved in the export of U.S.-origin goods can apply for specific authorization to engage in transactions to ensure the safe operation of Iranian commercial passenger aircraft, including transactions involving Iran Air. However, the transactions must be initiated and completed entirely within the six-month suspension period.
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